RealMedia Architecture Partner Program Internet Agreement - RealNetworks Inc. and Audible Inc.
RealMedia Architecture Partner Program Internet Agreement
This Agreement is entered into as of November 12, 1998 (the "Effective Date") by
and between RealNetworks, Inc., a Washington corporation with a principal place
of business at 1111 Third Avenue, Suite 2900, Seattle, Washington 98101 ("RN")
and Audible Inc., a Delaware corporation with an address at 65 Willowbrook
Blvd., Wayne, NJ 07470 ("Partner").
WHEREAS, RN has developed and owns all right, title and interest in the
RealMedia Architecture ("RMA", as further defined below), an open platform for
development of streaming media applications and tools, which allows software
developers to build new applications and extend current applications to inter-
operate with a wide variety of datatypes;
WHEREAS, RN has established a licensing program (the "Partner Program") which
allows independent software developers to create, market and sell applications
based on RMA, and to receive other benefits of participating in the Partner
Program; and
WHEREAS, Partner desires to participate in the Partner Program and to receive
the attendant rights and benefits;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 "License Key" means the authorization code that is generated by the License
Key Tool and that enables RMA Server Software to stream RealMedia
datatypes. License Keys that generate User-Streams and enable features of a
Partner Product are provided to a Partner's end-user customers.
1.2 "License Key Tool" means the version of the License Key Tool that is
provided to Partner by RN, which is specific and unique to the Partner
Product. The License Key Tool is used to generate unique License Keys for a
Partner Product.
1.3 "Licensed Software" means RN Players, the RealMedia SDK, including
associated RealMedia Libraries, RMA Server Software, whether in Object Code
or Source Code form, License Key Tools and License Keys, and related User
Documentation and specifications.
1.4 "New Release" means a new major release of the RMA Servers or the Partner
Products in which major new functionality has been added in addition to any
complement of bug fixes supplied, and which is designated as a change in
the digit to the left of the decimal point in the product version number
[(x).x.x]. "Update" means a minor release, enhancement, revision,
modification or upgrade of the RMA Servers or Partner Products, designated
as a change in the tenths digit in the product version number [x.(x).x], or
in the digit to the right of the tenths digit in the product version number
[x.x.(x)]. By way of clarification, if either party markets a new and
distinct product along with and in addition to an existing program, then
such new and distinct product shall be treated as a New Release, not an
Update.
1.5 "Object Code" means computer code assembled or compiled in magnetic or
electronic binary form on software media, which are readable and useable by
machines, but not generally readable by humans without reverse-engineering,
reverse-compiling or reverse-assembly.
1.6 "Partner Product(s)" means the products and applications developed by
Partner which are compatible with RMA Servers, as further described on
Exhibit A hereto. Partner Products shall include:
(a) "Partner Client Software," which means software that connects to an
RMA Player and utilizes the RMA application programming interfaces
("APIs");
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(b) "Partner Tools," which means software tools that may import datatypes
and export datatypes using the RealMedia Libraries; and/or that are
used to perform RMA-related functions including, but not limited to,
server administration, plug-in file systems, server monitoring, and
assembly; and
(c) "Partner Server Applications," which means software that interfaces
with an RMA Server and adds datatypes that can be streamed from an RMA
Server.
1.7 "RealMedia Architecture" or "RMA" means the software platform developed by
RN that allows for the development of streaming media products and tools,
and which is designed specifically for the existing infrastructure of the
Internet and corporate Intranets. RMA includes the following components:
(a) "Players," which are stand-alone applications or as components
embedded in other applications that play media files.
(b) "RealMedia Datatypes," which are datatypes that can be streamed using
RMA Server APIs and played using RMA Player APIs.
(c) "RealMedia Libraries," which are contained in the RealMedia SDK and
are Object Code implementations of various APIs.
(d) "RealMedia SDK" or "SDK," which contains the tools and information
needed for software developers to create tools for use in producing
streaming media and to adapt or build applications that stream from
RMA Servers and play in Players. The SDK contains a Player, Player
APIs, Server APIs, RealMedia Libraries, Sample Source Code and
RealMedia Server Software for use solely in developing Partner
Products.
(e) "RMA Server Software" or "RMA Server" in Object Code form, which
streams files reliably over networks, and which has the capabilities
set forth on Exhibit B hereto.
(f) "Sample Source Code," which provides an example of how to develop an
RMA application.
1.8 "Term" is defined in Section 8.1.
1.9 "Territory" means the world, except as otherwise limited by Section 15.5.
1.10 "User Documentation" means RN's user manuals, technical manuals, release
notes including advertisements for RMA Servers, installation and operation
instructions, and other data and documentation describing the use of RMA
Servers normally supplied to RN's customers.
1.11 "User-Stream" means the stream of media-compatible data necessary to
deliver the media type associated with a Partner Product from an RMA Server
to a single end-user client computer. The number of User-Streams being
delivered by a given RMA Server is measured by counting the number of end-
users simultaneously served by User-Streams originating at that RMA Server.
2. DEVELOPMENT LICENSE
2.1 License. Subject to the terms and conditions of this Agreement, RN grants
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to Partner a non-exclusive, nontransferable license to use and install the
RealMedia SDK for the sole purpose of developing Partner Products that are
based upon the RMA architecture. Partner, including its designated
subcontractors, if any, shall only use the SDK on a single computer or on a
computer network. Partner may make a single copy of the SDK for back-up
and archival purposes only, provided that any copy must contain all
proprietary notices included in the original. Partner may download
associated online documentation for purposes of using the SDK, but may not
make further copies of the documentation.
2.2 Limitations.
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(a) The SDK may be used solely to develop and test a Partner Product. It
may not be used for any commercial, non-commercial, educational or
internal purpose, and may not be used in any way that allows or causes
the transmission of audio, video or other media files across the
Internet or any computer network without a separate written license
agreement from RN.
(b) Partner is expressly prohibited from using, licensing, selling,
transferring or otherwise distributing any Partner Product except as
expressly provided in this Agreement.
(c) Except as expressly provided herein, Partner shall not copy, modify,
reproduce, display, decompile, reverse engineer, store, translate,
sublicense, assign, sell, lease or otherwise transfer or distribute
the SDK, or any of its rights therein, in whole or in part, nor may
Partner use the SDK to clone any client, server or other RN product.
All rights not specifically granted herein to Partner are reserved to
RN.
(d) Nothing contained in this Agreement shall be deemed or construed to
grant Partner the exclusive right to develop, or have distributed by
PN, Partner Products for any particular category of datatypes.
3. DISTRIBUTION OF PARTNER PRODUCTS
3.1 By Partner.
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(a) Partner Client Software. Partner shall have the right and license to
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market, promote, license and distribute the Partner Client Software
bundled with the RMA Player both physically and electronically in all
channels of distribution, including from Partner's web site, and
including but not limited to CD-ROM installation disks and/or third
party OEM disks. Such bundle may, in Partner's discretion, contain
other Partner software. Such distribution right shall be for the
latest versions of the RMA Player released by RN during the Term and
shall be free of any royalty obligation. Partner's Authorized
Distributors shall have the right and license to market promote,
license and distribute the Partner Client Software both physically and
electronically in all channels of distribution, including from
Partner's web site, and including but not limited to CD-ROM
installation disks and/or third party OEM disks. End users who
license, acquire or purchase the Partner Client Software and RMA
Player during the Term shall have the right to use the same in
perpetuity. Partner Client Software shall be distributed by RN in
accordance with Section 3.2(a). Partner may include a link offering or
promoting the Partner Client Software from the Partner website to a
hidden link on a RN website from which the Partner Client Software may
be downloadable, and may promote the Partner Client Software on
Partner's website.
(b) Partner Tools; Partner Server Applications. If applicable, subject to
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the terms and conditions set forth in this Agreement, and payment of
the License Fees set forth in Section 7.1, RN grants Partner a non-
exclusive license to distribute Partner Server Applications and
Partner Tools containing any Licensed Software through all methods and
channels of distribution in the Territory during the Term, including
through electronic distribution.
(c) Limitations; Requirements.
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(i) Partner's end-user license agreements for the Partner Products
shall prohibit further distribution of the RMA Libraries, any RMA
files or other components of RMA by Partner's end-users.
(ii) Partner shall include a prominent and valid copyright notice, in
the form reasonably requested by RN, in Partner Products
specifying that components of Partner's Products are owned by and
used under license from RN and its suppliers. Partner shall not
alter or remove any copyright or trademark notices contained in
any Licensed Software or User Documentation. In addition, Partner
shall display RN's "RMA logo" and the words "RMA Compatible" on
the
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product packaging and all product manuals and documentation, in
accordance with any Trademark Usage Guidelines provided by RN.
(iii) Partner may only distribute Partner Products that have been
designed, developed, and tested to function with an RMA Server.
To ensure that all components of the Partner Products
interoperate properly and are compatible with the RMA Server, RN
may elect to test the Partner Products or, at RN's option, will
have the Partner Products tested by a third party testing lab at
Partner's expense. Under no circumstances shall Partner Products
be held to a standard any greater than that applicable RN and/or
other third-party products. RN shall provide development support
to Partner to aid in Partner's resolution of problems discovered
in the testing process, as set forth in Section 6.1.
(iv) Partner agrees to promptly deliver to RN all releases, including
beta releases, of its Partner Products, for use by RN as set
forth in Section 3.2.
3.2 By RN.
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(a) Partner Client Software. Partner hereby grants RN a non-exclusive
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perpetual royalty-free right and license to market, promote and
distribute, by itself or through Authorized Distributors, the Partner
Client Software, in the Territory By any means and in all channels of
distribution. Provided that RN determines that the Partner Client
Software is compatible with RMA, the Partner Client Software complies
with the technical specifications agreed upon by the parties, that
Partner continues to support the Partner Client Software in a
commercially reasonable manner through upgrades if applicable,
technical support and promotion), RN agrees to promote, market and
distribute the Partner Client Software as follows:
(i) RN will make good faith effort to include the Partner Client
Software as a standard feature in the RN Players in all non-
electronic distribution channels.
(ii) RN will include the Partner Client Software in all full-featured
versions of the RN Players distributed electronically over the
Internet. All Players which do not include the Partner Client
Software will include an automatic download feature that makes
the Partner Client Software available whenever a Player attempts
to receive a Partner datatype.
(iii) RN will promote the Partner Client Software from the RN Partner
page website.
(iv) RN shall not be obligated to include the Partner Client Software
in any special versions of the Player provided to a RN third
party licensee if such licensee will not accept the Partner
Client Software
(v) In the event that either party secures a distribution
arrangement with an OEM or other distributor that necessitates
that either the RMA Server or the Partner Product be compiled or
"ported" to run on a third party platform, the parties will
negotiate in good faith and cooperate as reasonably necessary to
enable such arrangement.
(b) Partner Tools; Partner Server Applications. RN and Partner agree to
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negotiate in good faith a mutually acceptable Electronic Distribution
Agreement which Agreement may allow RN the non-exclusive right and
license to market, promote and distribute, by itself or through
Authorized Distributors, the Partner Tools and Partner Server
Applications, in the Territory during the Term.
4. DISTRIBUTION OF THE RMA SERVER
4.1 Grant of License. Subject to the terms and conditions of this Agreement,
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and payment of the License Fees set forth in Section 7.1, if applicable, RN
grants Partner a non-exclusive, non-transferable right and license, in the
Territory during the Term, to:
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(a) market, license and distribute Object Code copies of the RMA Server
Software and User Documentation to end-user customers only in
conjunction with a Partner Product.
(b) license and distribute one copy of the Partner Client Software with
each copy of the RMA Server Software distributed to an end-user
customer;
(c) generate License Keys with an authorized, RN-provided License Key
Tool, and duplicate, market and distribute License Keys associated
with Partner Product to Partner's authorized resellers and
distributors ("Authorized Distributors") and end-user customers;
(d) sublicense to Authorized Distributors the right to market, license and
distribute Object Code copies of the RMA Server Software, User
Documentation and License Keys to end-user customers only as part of a
bundle with partner Client Software; and
(e) determine the price at which Partner and its Authorized Distributors
will license and distribute the Partner Products, RMA Server Software
and License Keys to end-user customers, independent of any License Fee
payable by Partner to RN.
4.2 Distribution Requirements.
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(a) End User License Agreements. Partner shall distribute and shall cause
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its Authorized Distributors to distribute to their end-user customers
RN's standard end-user Server License Agreement, which is contained in
RN's product packaging. The license granted in such end-user license
agreement shall be between RN and Partner's end-user's. A copy of
RN's standard end-user Server License Agreement is attached hereto as
Exhibit C.
(b) Fulfillment for RMA Servers. Partner may either: (i) download RMA
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Servers from a private RN download site; or (ii) place an order with
RN for physical pre-packaged copies of the RMA Servers. RN will ship
all physical product to Partner or Partner's authorized designee, by
shipment method specified by Partner. All orders are shipped F.O.B.
RN's designated fulfillment location. As a convenience, RN may prepay
freight charges, and such charges will be billed to Partner. All risk
of loss or damage in transit will be borne by Partner. Partner shall
inspect the RMA Servers upon receipt at the delivery location.
Acceptance shall be deemed to occur unless Partner provides RN with
notice of non-acceptance within three (3) business days of receipt. A
Partner may only reject an RMA Server for one of the following
reasons: (i) missing labels or User Documentation, (ii) defective
media, or (iii) defective performance.
(c) Source Code Escrow. (i) Partner will deposit with Data Securities
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International, Inc. (the "Escrow Agent"), a complete and correct set
of the Source Code version (as defined immediately below) and Object
Code version of the Partner Products to be held in escrow (the "escrow
products") and shall enter into the Escrow Agent's Master Preferred
escrow agreement (attached hereto as Exhibit D), pursuant to which RN
shall have the right to require that the Escrow Agent provide some or
all of the Escrow Products to RN or third parties if so required by a
governmental agency or court with jurisdiction over RN, or in the
event that partner undertakes or is subject to any of the actions set
forth in Section 8.2(b), or if Partner is in material breach of this
Agreement. Partner shall pay any required escrow fee directly to the
Escrow Agent.
(ii) RN's access to the Source Code version of the Partner Products
shall be SOLELY for the purpose of fixing any bugs related to the
Partner Products that render the RMA unusable as contemplated under
the terms of this Agreement. RN shall have no derivative rights in
the Partner Products under any circumstances and may use any "fix" as
contemplated by this subsection SOLELY under the terms and conditions
of this Agreement.
(iii) The Source Code version of the Partner Products referred to in
this Section 4.2.c shall not include rights to components of the
Partner Products which are licensed by third parties to Partner as
follows: CyLink Corporation rights to DSS (Digital Signature Standard)
under patents no. 4,200,770 ("Diffie/Hellman Patent")
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and 4,218,582 ("Hellman/Merkle Patent"); and DSP Group, Inc. rights
regarding G.723.1 speech CODEC. Partner hereby agrees that, under the
direction of RN and pursuant to third-party license rights to be
obtained by RN for those third-party components, Partner will provide
to RN assistance to integrate those licensed components into the
Partner Products as required solely for the purpose set forth in
4.2.c(ii) above.
(d) Trademark Usage. If Partner distributes the RMA Server Software as
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part of a Bundle, Partner shall prominently display RN's "RMA logo"
and the words "RMA Compatible" on the product packaging and all
product manuals and documentation, in accordance with any Trademark
Usage Guidelines provided by RN.
(e) Updates; New Release. During the Term, Partner shall make available
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to RN at no charge, upon release by Partner, a copy of all Updates and
New Releases to the Partner Products. Each Update or New Release
shall, upon release by Partner, be subject to all of the terms and
conditions of the Agreement.
5. MARKETING CONSIDERATIONS
In consideration for participating in the Partner Program, Partner shall be
entitled to receive the following marketing considerations from RN:
5.1 Trademark License. Partner shall have the right to use RN's trademarks and
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logos in connection with Partner's user interfaces, packaging, collateral
material and website, subject to compliance with RN's Trademark Usage
Guidelines. Partner agrees to furnish RN with samples of any proposed
usage of RN's trademarks or logos, and obtain RN's prior approval for such
usage, which approval will not be unreasonably withheld.
5.2 Customer Mailings. RN will send semi-annual emails throughout the Term to
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RN's targeted customers promoting the Partner Products. Partner shall have
the right to review and approve the contents of such email, which approval
won't be unreasonably withheld. At Partner's discretion, such emails may
list Partner's universal resource locators ("URL's") so that prospective
customers can obtain additional information about the Partner Products.
Additionally, RN will solicit from existing RN customers their desire to
receive collateral material from Partner. On Partner's behalf, providing
that Partner reimburses RN for its costs of mailing and supplies all
collateral material, RN will make one "bonded" mailing during the Term to
RN's customers who indicate a desire to receive collateral material about
the Partner Products.
5.3 Participation in RN Events. RN agrees to feature Partner in the Partner
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Lab at RN's RealMedia user conference. From time to time, RN will also
include Partner in RN press releases, and offer Partner the opportunity to
participate in trade shows and conference displays as RN deems appropriate.
5.4 Real Developer Program. RN will provide partner a complimentary membership
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in the Real Developers program at the "Apps Developer" level for one year
from the Effective Date.
5.5 Advertising Impressions. During the Term, RN will provide Partner, without
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charge, a minimum of 5,000 page impressions of advertising on RN's website,
Real.com, in such locations as RN determines in its discretion. Such
advertising shall commence simultaneously with the Gold release of the
Partner Client Software.
6. SOFTWARE SUPPORT; UPGRADES
6.1 Development Support. RN shall provide complimentary technical support to
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Partner in connection with Real Developers program for ninety (90) days
from the Effective Date. Such support includes unlimited telephone support
and priority e-mail support, and five (5) additional support calls after
the expiration of the 90-day period.
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6.2 Technical Support for Partner Products. Partner shall be solely
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responsible for providing, and agrees that it will provide, all end-user
technical and customer support for the Partner Products.
6.3 Technical Support for RMA Servers. Partner agrees that it will provide
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first-tier technical and customer support, by telephone and e-mail and in
accordance with RN's reasonable minimum support requirements, for RMA
Server Software distributed by Partner and its Authorized Distributors. RN
will enroll Partner, without charge, in a one-day RealMedia technical
training seminar at RN's facilities, to train Partner to provide first-line
technical support to its end-user customers for RMA Server Software.
Partner shall be responsible for all out-of-pocket costs it incurs to
attend such seminar. RN shall provide second-tier technical support, by
telephone and email, from 8:00 A.M-5:00 P.M. PST Monday through Friday to
Partner's primary support contact for RMA Servers. RN's telephone
"hotline" shall be staffed by technical personnel with a working knowledge
of the RMA Servers. RN shall not provide technical support to Partner's
Authorized Distributors or end-users, unless such customers purchase
technical support service from RN directly.
6.4 Updates; New Releases. During the Term, RN shall make available to Partner
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at no charge, upon release by RN, a copy of all corresponding Updates on
the RN website. RN shall make New Releases available free of any additional
charge and shall, upon release to Partner, be subject to all of the terms
and conditions of the Agreement.
7. PAYMENT
7.1 License Fees. In consideration of the rights and licenses granted herein,
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Partner agrees to pay RN the following License Fees:
(a) In the event at any time during the Term Partner distributes RMA
Server code or RMA-based tools, Partner shall pay RN the sum of Ninety
Dollars ($90.00) plus Eight Percent (8%) of the total gross revenue
received by Partner from the sale, license or distribution of all RMA-
based products, including Partner Products, RMA Servers, License Keys,
Updates, New Releases and any site licenses.
(b) Notwithstanding Section 7.1(a), Partner shall not owe RN any License
Fee on the sale of Partner Products and License Keys that enable
datatypes other than streaming audio or video to customers who have
purchased their RMA Server directly from RN, provided Partner does not
distribute an additional RMA Server or New Release to such customers.
(c) RN reserves the right to revise the License Fees set forth above
within thirty (30) days of the start of each calendar year and again
upon the commercial release of each New Release. RN shall provide
Partner thirty (30) days' written notice of any change in the License
Fee.
7.2 Payment Terms. Partner will provide RN with a written report by the 20th
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day of each month for the preceding calendar month setting forth: (a) the
number of RMA Servers distributed, (b) the names and address to whom the
RMA Servers were distributed; (c) the number of Partner Products
distributed; (d) the number of License Keys distributed; (e) the type and
number of any other RMA-based products or related licenses distributed; (f)
the price per unit charged for each of the foregoing; (g) gross revenue
receivable by Partner (whether or not actually collected); and (h) the
amount due to RN pursuant to Section 7.1 for the preceding month. The
report shall be accompanied by the payment due. Payments shall be
calculated based on sales invoiced by Partner and its Authorized
Distributors, whether or not the revenue is actually collected. All
payments due hereunder shall be made in United States Dollars, without
withholding or offset of any kind. Interest shall accrue on all amounts
past due hereunder at the monthly rate of one and one half percent (1.5%)
or at the maximum legal rate, whichever is less.
7.3 Rebates. RN will pay Partner a rebate of License Fees, according to the
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following schedule:
(a) If Partner has paid RN between $250,000 and $500,000 in License Fees
during the Term, RN shall pay Partner a rebate of Five Percent (5%) of
the total License Fees paid;
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(b) If Partner has paid RN between $500,001 and $1,500,000 in License Fees
during the Term, RN shall pay Partner a rebate of Ten Percent (10%) of
the total License Fees paid; and
(c) If Partner has paid RN $1,500,001 or more in License Fees during the
Term, RN shall pay Partner a rebate of Fifteen Percent (15%) of the
total License Fees paid.
(d) RN shall pay all rebates within ninety (90) days of receipt of the
final monthly report and accompanying License Fees after the
expiration of this Agreement. The payment of a rebate by RN shall not
be deemed as evidence of or confirmation that RN agrees that total
amount due and owing RN under this Agreement has been paid by Partner,
and shall not in any way affect RN's right to conduct any audit as set
forth in Sections 7.4 and 7.5 during the period set forth therein.
7.4 Books and Records. Partner shall keep books of account with respect to the
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amounts due and the calculations required to be made under Section 7.1.
Upon RN's reasonable written request, and no more than once per year of the
Term, RN may audit and inspect all such books of account, through an
independent third party auditor and during normal business hours, provided
that such auditor shall undertake in writing to protect the confidentiality
of the business data and records of Partner. The cost of any such audit
shall be paid by RN; provided, however, that in the event RN initiates an
audit under this Section 7.4 and it is finally determined that the amount
reported and paid by Partner pursuant to Section 7.1 for the period(s)
audited is, in the aggregate, less than ninety-five per cent (95%) of the
aggregate amount actually due, then Partner shall pay the reasonable costs
and expenses of said audit. If any such audit reveals an underpayment of
license fees, Partner shall make any correcting payment within thirty (30)
days. Any underpayment shall be subject to interest of one and one-half
percent (1.5%) per month or the maximum amount allowed by law, whichever is
less. Partner will maintain the books and records applicable to each
reporting period for at least three years following the close of such
period.
7.5 Audit of Authorized Distributors. For all Authorized Distributors,
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Partner, in its sole discretion, shall either: (a) retain for itself the
right to audit the books and records of any such Authorized Distributor; or
(b) require that the Authorized Distributor agree in writing to permit,
upon the written request of RN to Partner, an independent auditor paid by
RN to examine the necessary books and records of any such Authorized
Distributor, provided that such accountant shall agree to protect the
confidentiality of the business data and records and to disclose to RN only
the accuracy or inaccuracy of the reporting required hereunder. Any such
audits shall be arranged through Partner.
8. TERM AND TERMINATION
8.1 Term. This Agreement shall commence as of the Effective Date, and
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terminate two (2) years thereafter ("the Term"), unless earlier terminated
as provided herein.
8.2 Termination by Either Party. Either party may terminate this Agreement
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immediately upon written notice to the other party in the event of any of
the following:
(a) should the other party fail to perform any material term or condition
of this Agreement, which shall constitute a default of this Agreement,
and such default has not been corrected within thirty (30) days of
written notice from the non-breaching party. In the event of a breach
of Section 9 no cure period need be provided.
(b) should the other party (i) make a general assignment for the benefit
of creditors; (ii) institute proceedings to be adjudicated a voluntary
bankrupt, or consent to the filing of a petition of bankruptcy against
it; (iii) be adjudicated by a court of competent jurisdiction as being
bankrupt or insolvent; (iv) seek reorganization under any bankruptcy
act, or consent to the filing of a petition seeking such
reorganization; or (v) have a decree entered against it by a court of
competent jurisdiction appointing a receiver, liquidator, trustee, or
assignee in bankruptcy or in insolvency covering all or substantially
all of such party's property or providing for the liquidation of such
party's property or business affairs provided that such decree is not
dismissed within 45 days.
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8.4 Effect of Termination.
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(a) Upon the effective date of termination of this Agreement for a
material breach by Partner, the licenses granted hereunder shall
terminate immediately. Partner will either immediately return all
Licensed Software to RN or certify in writing to RN that all copies of
all Licensed Software have been destroyed. RN may discontinue
promotion and distribution of Partner Products or continue to
distribute Partner Products during the Sell-Off Period, set forth in
Section 8. 3(b), at its sole discretion. Notwithstanding anything
in this Agreement to the contrary, under no circumstances may Partner
distribute Partner Client Software after the expiration or termination
of this Agreement, for any reason, without RN's express written
consent.
(b) For two (2) months after the expiration or termination of this
Agreement other than by reason of Partner's material breach ("Sell-Off
Period"), Partner may advertise and sell the Partner Products, RMA
Server and the License Keys in its inventory or necessary to fulfill
orders confirmed as of the expiration or termination date, and shall
pay License Fees and render statements in the same manner as during
the Term. After the end of the Sell-Off Period, Partner shall return
to RN, at Partner's expense, all copies of the Partner Products, RMA
Server and the License Keys, or RN may instruct Partner to destroy
them. Partner shall furnish RN with affidavits certified by an
officer of Partner evidencing such destruction.
(c) Any termination of this Agreement shall not release Partner from
paying any amount that may then be owing to RN, or that may become due
to RN in the future.
(d) Notwithstanding any other terms or conditions of the Agreement, the
rights of end-user customers to use any RMA Servers or License Keys
distributed by Partner shall survive any termination or expiration of
the Agreement, provided that License Fees for said RMA Servers and
License Keys have been paid to RN.
9. CONFIDENTIALITY
"Confidential Information" means any trade secret information or
information otherwise designated by a party as being confidential relating
to either party's products, product plans, designs, computer code,
technical information, costs, pricing, financing, marketing plans, business
opportunities, personnel, research and development or know-how.
Confidential Information shall not include information that (i) is or
becomes generally known or available through no fault of the receiving
party, (ii) was known by or disclosed to the receiving party prior to
disclosure, (iii) is independently developed by the receiving party, or
(iv) is made generally available by the disclosing party without any
restriction. The parties shall use reasonable efforts and at least the same
care that each uses to protect its own Confidential Information of like
importance, to prevent unauthorized dissemination or disclosure of the
other party's confidential information during and for three (3) years
following the last day of the Term. Neither party will use the other's
Confidential Information for purposes other than those necessary to
directly further the purposes of this Agreement. Neither party will
disclose to third parties the other's Confidential Information without the
prior written consent of the other party, provided, however, that nothing
will preclude a party from making disclosure to a third party for the
purpose of due diligence in a financing transaction, merger, acquisition,
business combination or other similar transaction, or from making any
disclosures to any governmental agency having jurisdiction over the
disclosing party, or unless otherwise required by law, government order or
court proceeding. Each party shall return the Confidential Information to
the other party upon termination of the Agreement or upon the request of
the other party. Except as expressly provided in this Agreement, no
ownership or license right is granted in any Confidential Information.
10. PROPRIETARY RIGHTS
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10.1 Partner. Partner shall retain all right, title and interest in and to the
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Partner Products, including any copyright, patent, trade secret, or other
intellectual property rights therein, subject to RN's underlying ownership
in any Licensed Software included therein, and Partner Confidential
Information. Notwithstanding the foregoing, Partner agrees that it shall
not register or attempt to register any patents in connection with any
Partner Product, including, but not limited to, in any device, process,
method, function or invention included therein or necessary for the
operation thereof, which would in any way interfere with, limit or
prohibit RN's continued use, development or ownership of RMA.
10.2 RN. RN shall retain all right, title and interest in and to the Licensed
--
Software, including any copyright, patent, trade secret, or other
intellectual property rights therein, all RN trademarks and all RN
Confidential Information, and any copies thereof, regardless of the media
or form on or in which the Licensed Software or copies may exist. Partner
acknowledges and agrees that the Licensed Software is proprietary to RN,
and is protected by the copyright laws of the United States and
international copyright treaties. Unauthorized copying of the Licensed
Software, including modification, merger or inclusion with any other
software, is expressly forbidden. Partner shall not be deemed, by anything
contained in or done pursuant to this Agreement, to acquire any right,
title or interest in any trademark, copyright, patent or other
intellectual property of RN, and shall do nothing to prejudice the value
or validity of RN's rights therein or ownership thereof.
11. LIMITED WARRANTY.
11.1 RN warrants, solely for the benefit of Partner, that for a period of
ninety (90) days from the date of delivery to Partner: (i) the Licensed
Software, if operated as directed, will substantially achieve the
functionality described in the User Documentation, and (ii) that the media
containing the Licensed Software, if provided by RN, is free in material
respects from defects in material and workmanship; provided, however, that
the foregoing warranty is expressly contingent (and shall be otherwise
void) upon: (1) the use of the Licensed Software strictly in accordance
with the instructions and User Documentation therefor; (2) the absence of
misuse or damage thereto; (3) the absence of any alteration or
modification thereto; and (4) Partner's acceptance of Licensed Software
for distribution with knowledge that the media upon which the Licensed
Software are reproduced may contain certain defects. RN makes no
representation or warranty that the information or functions contained in
the Licensed Software will meet Partner's requirements or that the use or
operation of the Licensed Software will be uninterrupted, error free or
secure, or that any Licensed Software defects are correctable or will be
corrected. THE FOREGOING WARRANTY SHALL NOT APPLY TO THE SAMPLE SOURCE
CODE, WHICH IS PROVIDED TO PARTNER AS IS, WITHOUT WARRANTY OF ANY KIND.
11.2 NO OTHER WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, RN
-------------------
AND ITS LICENSORS DISCLAIM ALL OTHER WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO IMPLIED WARRANTIES OF
MERCHANTIBILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE EXPRESSLY
DISCLAIMED, WITH REGARD TO THE LICENSED SOFTWARE AND THE USER
DOCUMENTATION. THIS LIMITED WARRANTY GIVES PARTNER SPECIFIC LEGAL RIGHTS.
PARTNER MAY HAVE OTHERS, WHICH VARY FROM STATE/JURISDICTION TO
STATE/JURISDICTION.
11.3 Remedies. RN's entire liability and Partner's exclusive remedy for any
--------
breach of the limited warranty set forth in Section 11.1 shall be, in RN's
sole discretion: (i) to replace Partner's defective media; or (ii) to
advise Partner how to achieve substantially the same functionality with
the Licensed Software as described in the User Documentation through a
procedure different from that set forth in the User Documentation.
Repaired, corrected or replaced Licensed Software and User Documentation
shall be covered by this limited warranty for period remaining under the
warranty that covered the original Software, or if longer, for thirty (30)
days after the date RN either shipped to Partner the repaired or replaced
Licensed Software or RN advised Partner as to how to operate the Licensed
Software so as to achieve the functionality described in the
Documentation, whichever is applicable.
12. INDEMNIFICATION
12.1 Each party (the "Indemnifying Party") agrees to hold harmless, indemnify
and defend the other party (the "Indemnified Party") from and against any
losses, damages, costs and expenses (including reasonable
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attorneys' fees and costs) arising out of or relating to any claims that
the Indemnifying Party's products infringes any copyright, patent,
trademark, trade secret or other proprietary right of any third party. The
Indemnifying Party shall not be liable in the event that (i) the
Indemnified Party continued marketing, sale, distribution or use of the
Indemnifying Party's products after receiving prior written notice from
the Indemnifying Party that the Indemnified Party should cease such
activities due to a third party claim of infringement against such
products; or (ii) the claim of infringement results from the Indemnified
Party's combination or use of the Indemnifying Party's products with any
third party product, program or data not supplied by the Indemnifying
Party.
12.2 Conditions of Indemnification. A party's obligation to indemnify the
-----------------------------
other party is expressly conditioned on the Indemnified Party: (i) giving
written notice of the claim promptly to the Indemnifying Party; (ii)
giving the Indemnifying Party sole control of the defense and settlement
of the claim; (iii) providing to the Indemnifying Party all available
information and assistance (at the Indemnifying Party 's expense); and
(iv) not compromising or settling such claim.
13. LIMITATION OF LIABILITY
UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY, WHETHER IN TORT, CONTRACT OR
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON
FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY
CHARACTER INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOODWILL, WORK
STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, EVEN IF THE PARTY SHALL HAVE BEEN
INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.
14. DISPUTE RESOLUTION
Any dispute arising out of or relating to this Agreement shall be resolved in
accordance with the procedures specified in this Section 14, which shall be the
sole and exclusive procedures for the resolution of any such dispute.
14.1 Executive Negotiations. The parties shall attempt in good faith to
----------------------
resolve any dispute relating to this Agreement promptly by negotiation between
executives who have authority to settle the controversy. In the event a dispute
cannot be resolved, either party may give the other party written notice of any
dispute not resolved in the normal course of business. Within fifteen (15)
days after delivery of such a notice, the receiving party shall submit to the
other a written response. The notice and response shall include a statement of
each party's position and a summary of arguments supporting that position.
Within thirty (30) days after delivery of the disputing party's notice, the
senior executive officers of Partner and RN shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary, to
attempt to resolve the dispute. All reasonable requests for information made by
one party to the other will be honored. All negotiations pursuant to this
Section 14.1 are confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence and state rules of
evidence.
14.2 Arbitration. If any dispute relating to this Agreement shall not
-----------
have been resolved through the use of the non-binding procedures specified in
Section 14.1 within one hundred (100) days of the initial notice of either party
to the other of a dispute, such dispute shall be settled by binding arbitration;
provided, however, that if one party has requested the other to participate in
the non-binding procedure specified in Section 14.1 and the other has failed to
participate, the requesting party may initiate arbitration before expiration of
the above stated period. Arbitration shall be governed by AAA Rules, with
arbitrators to be mutually agreed upon by the parties. Arbitration shall take
place in King County, Washington. The arbitrators shall not be empowered to
award damages in excess of compensatory damages, and each party hereby
irrevocably waives any right to recover such damages with respect to any dispute
or disagreement resolved by arbitration.
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14.3 Provisional Remedies. A party, without prejudice to the mandatory
--------------------
procedures of this Section 14, may file a complaint for statute of limitations
or venue reasons, or seek a preliminary injunction or other provisional judicial
relief, if in its sole judgment such action is necessary to avoid irreparable
damage or to preserve the status quo. Notwithstanding such action, the parties
will continue to participate in good faith in the procedures specified in this
Section 14.
15. GENERAL
15.1 Independent Contractor. The relationship created by this Agreement
----------------------
is one of independent contractors, and not partners, franchisees or joint
venturers. No employees, consultants, contractors or agents of one party are
employees, consultants, contractors or agents of the other party, nor do they
have any authority to bind the other party by contract or otherwise to any
obligation, except as expressly set forth herein. They will not represent to
the contrary, either expressly, implicitly or otherwise.
15.2 Notices. All notices and demands under this Agreement will be in
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writing and will be delivered by personal service, confirmed fax, confirmed e-
mail, express courier, or certified mail, return receipt requested, to the
address of the receiving party set forth below, or at such different address as
may be designated by such party by written notice to the other party from time
to time. Notice will be effective on receipt. Notices should be addressed to:
RN: AI:
Russell Braun Travis Millman
GM Strategic Products VP, Business Development
RealNetworks, Inc. Audible Inc.
1111 Third Avenue, Suite 2900 65 Willowbrook Blvd.
Seattle, WA 98101 Wayne, NJ 07470
Voice: (206) 674-2288____ Voice: 973-890-4070, x237
Fax: (206) 674-____ Fax: 973-890-2442
E-mail: RBraun@real.com E-mail: travis@audible.com
With a copy to: With a copy to:
Kelly Jo MacArthur, VP & General Counsel Brian Fielding, Managing Director
Voice: (206) 674-2213 Voice: 973-890-4070, x225
Fax: (206) 674-2695 Fax: 973-890-2442
E-mail: kellyjo@real.com E-mail: bfielding@audible.com
15.3 No Assignment. This Agreement may not be assigned by either party
-------------
without the prior written consent of the other, except pursuant to the sale of
substantially all assets of a party, or a merger or consolidation. In the event
of a sale of substantially all assets of Partner, or a merger or consolidation
involving Partner, the terms and conditions contained in Section 4 of this
Agreement shall not survive. This Agreement shall be binding upon and inure to
the benefit of the parties' permitted successors and assigns.
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15.4 Survival. The following provisions shall survive the expiration or
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termination of this Agreement: 2.2, 7.2, 7.4, 7.5, 8.4, 9-14, and 15.4.
15.5 Export Licenses. The parties acknowledge that the laws and
----------------
regulations of the United States may restrict the export and re-export of
certain commodities and technical data of United States origin. Each party
agrees that it will not export or re-export the Products in any form without the
appropriate United States or foreign government licenses. In particular but
without limitation, none of the Products, Documentation or underlying
information or technology may be exported or re-exported (i) into (or to a
national or resident of) Cuba, Iraq, Libya, Yugoslavia (Serbia and Montenegro),
North Korea, Iran, Angola, Sudan, Syria or any other country to which the U.S.
has embargoed goods; or (ii) to anyone on the U.S. Treasury Department's list of
Specially Designed Nationals or the U.S. Commerce Department's Table of Deny
Orders.__
15.6 U.S. Government Restricted Rights and Export Restriction. The
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Licensed Software and User Documentation are provided with RESTRICTED RIGHTS.
Use, duplication or disclosure by the Government is subject to restrictions set
forth in subparagraphs (a) through (d) of the Commercial Computer Software--
Restricted Rights at FAR 52.227-19 when applicable, or in subparagraph
(c)(1)(ii) of the Rights in Technical Data and Computer Software clause at DFARS
252.227-7013, and in similar clauses in the NASA FAR supplement, as applicable.
Manufacturer is Progressive Networks, Inc./1111 Third Avenue, Suite 500/
Seattle, Washington, 98101. Partner acknowledges that none of the Software or
underlying information or technology may be downloaded or otherwise exported or
re-exported: (i) into (or to a national or resident of) Cuba, Iran, Iraq, Libya,
North Korea, Syria, Sudan or Angola or any other country to which the U.S. has
embargoed goods; or (ii) to anyone on the U.S. Treasury Department's list of
Specially Designated Nationals or the U.S. Commerce Department's Table of Denial
Orders.
15.7 Miscellaneous. This RMA Agreement, and the Exhibits attached hereto
-------------
and made a part hereof, together with the business Agreement between the parties
dated as of November 12, 1998,constitute the complete and exclusive agreement
between RN and Partner with respect to its subject matter, and supersede all
prior oral or written understandings, communications or agreements not
specifically incorporated herein or therein. This RMA Agreement, when executed
in combination with the business Agreement between the parties dated as of
November 12, 1998, supersedes in whole the Bundling Agreement dated as of July
27, 1997. This Agreement may not be modified except in a writing duly signed by
an authorized officer of RN and Partner. The waiver by either party of any
breach of this Agreement by the other party will not waive subsequent defaults
by such party of the same or a different kind. If any provision of this
Agreement is held to be unenforceable for any reason, such provision shall be
reformed only to the extent necessary to make it enforceable, and such decision
shall not affect the enforceability of such provision under other circumstances,
or of the remaining provisions hereof under all circumstances. The failure of
any party to enforce any of the provisions hereof shall not be construed to be a
waiver of the right of such party thereafter to enforce such provisions. Any
and all remedies herein expressly conferred upon a party shall be deemed
cumulative and not exclusive of any other remedy conferred hereby or by law, and
the exercise of any one remedy shall not preclude the exercise of any other.
Headings shall not be considered in interpreting this Agreement.
15.8 Announcements. The parties agree that neither party shall publicize
--------------
the existence of this Agreement until such time as the initial publicity
announcement is made pursuant to the business Agreement between the parties
dated as of November 12, 1998. Each party must obtain the prior written consent
of the other party before publishing any press release or other publicity
concerning this Agreement which includes any details of the other company's
products or personnel.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date written above.
REAL NETWORKS, INC. AUDIBLE, INC._____________________
By: /s/ Robert Glaser By: /s/ Andy Huffman
------------------------- ------------------------------
Name: Robert Glaser Name: Andy Huffman
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Title: CEO Title: President and CEO
---------------------- ---------------------------
Date: 11/24/98 Date: 11/12/98
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