Distributor Agreement - Corel Corp. and Digital River Inc.
DISTRIBUTOR AGREEMENT
This Agreement made as of this 23rd day of April, 1997, by and between Corel
Corporation (USA) ("COREL") having its principal place of business at 567
East Timpanogos Parkway, Orem, Utah, 84057 (Tel: 801-765-4010; Fax:
801-222-4379) and Digital River, Inc. ("Distributor"), having its principal
place of business at 5198 West 76th Street, Edina, Minnesota (Tel:
612-832-5622; Fax: 612-830-1154).
BACKGROUND:
1. COREL desires to secure distribution of certain of its software; and
2. Distributor desires to obtain certain software from COREL for
distribution.
NOW THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein the parties agree as follows:
1. INTERPRETATION
1.01 DEFINITIONS. As used herein:
(a) "Agreement" means this Agreement and any Schedule attached
hereto.
(b) "Customer", means any individual or entity who purchases Software
from Distributor, including an End User.
(c) "Distributor System" or "Electronic Commerce System" means the
system used by Distributor for the receipt and delivery of
on-line orders for the Software and processing of credit card
information for all Software orders by Customers.
(d) "Electronic Software Distribution" means the electronic delivery
of Products, using on line services, the Internet, phone lines,
cable systems, servers, satellite, or other public or private
access network or electronic communication mediums.
(e) "Electronic Distributor Materials" means Distributor-provided
computer readable materials which have received prior written
approval from COREL to be included in a Product.
(f) "End User License Agreement (EULA)" means COREL's end user
license, as modified by COREL from time to time.
(g) "Hard Goods" means any tangible item other than Schedule "B"
Software which is offered for sale or distribution by COREL and
Distributor pursuant to this Agreement.
(h) "Product" means a copy of the Schedule "A" Software,
Documentation, End User License Agreement, and any Electronic
Distributor Materials packaged in computer readable form for
Electronic Software Distribution in accordance with the terms of
this Agreement.
(i) "Software" means collectively, the object code version of the
COREL software Products listed in Schedule "B" ("Schedule "B"
Software") and the object code version in any form or format of
any of the COREL software Products listed in
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Schedule "A" ("Schedule "A" Software"). In those instances where
the term "Software" is used, such reference shall include both
schedule "A" and Schedule "B" software. In those instances where
only Schedule "A" or Schedule "B" Software is indicated, such
reference shall refer only to that software so specified.
(j) "Software Prices" means the amount payable by Distributor
pursuant to section 7 of this agreement and according to the
pricing schedule set out in Schedule "A" and Schedule "B" for
each copy of the Software which is distributed by Distributor.
(k) "Territory" means world-wide subject to section 5.04 herein.
2. APPOINTMENT
2.01 LICENSE AND APPOINTMENT. Subject to the terms and conditions hereof,
COREL hereby grants to Distributor and Distributor accepts from COREL:
2.01.1 REPRODUCTION - a non-exclusive license to reproduce Schedule "A"
Software only in computer readable form for the purposes of distribution
only through Electronic Software Distribution as part of a Product;
2.01.2 DISTRIBUTION - the exclusive right to distribute and resell the
Schedule "A" Software, Schedule "B" Software, and Hard Goods to Customers
within the Territory for sales originating from or through COREL's web
site. Distributor agrees not to distribute the Schedule "A" Software
other than in computer readable form as part of a Product.
2.02 INTELLECTUAL PROPERTY. Distributor acknowledges that COREL is the owner
of all intellectual property, including, without limitation, copyright,
relating to the Software and the trade-marks used in association with
the Software. Distributor shall have no rights in respect of such
copyright other than to act as a distributor of the Software to deliver
the Software subject to the End User Licenses.
2.03 END USER LICENSE AGREEMENT. Distributor shall ensure that each copy of
the Software is distributed with a copy of the End User License
Agreement.
3. TRADEMARKS
3.01 COREL MARKS. During the term of this Agreement, COREL grants
Distributor a non-exclusive license to use the COREL Marks for the
distribution and marketing of the Software.
3.02 NON-ALTERATION. Distributor agrees not to alter the trademarks, trade
names, copyright notices and designs of any Software. Distributor
acknowledges and agrees that COREL retains all of is right, title and
interest in the COREL Marks, and all use of the COREL Marks by
Distributor shall inure to the benefit of COREL.
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*CONFIDENTIAL TREATMENT REQUESTED
3.03 MARK POLICIES AND STANDARDS. Distributor shall display the COREL Marks
in accordance with COREL's Guidelines for Using Trademarks in effect
from time to time. COREL retains the right to specify and approve the
quality and standards of all materials on which the COREL Marks are
displayed and to inspect from time to time samples of such materials.
Failure of Distributor to adhere to such standards of quality shall be
grounds for COREL to terminate Distributor's rights to use such COREL
Marks and to terminate this Agreement. In order to enable COREL to
protect its rights in the COREL Marks, Distributor will advise COREL
of every country in which it markets or distributes the Software.
3.04 VALIDITY AND ENFORCEABILITY OF MARKS. Distributor shall not at any time
during or after this Agreement assert any claim or interest in or to
any of the COREL Marks or institute any proceeding reasonably
calculated to adversely affect the validity or enforceability of any
of the COREL Marks. Distributor shall not register, seek to register,
or cause to be registered any of COREL's trademarks, logos, or
copyrights, including the COREL Marks, without COREL's prior written
consent. Distributor shall not adopt or use such trademark, trade
names, logos or insignia, or any confusingly similar work or symbol,
as part of Distributor's company or partnership name.
3.05 INFRINGEMENT AND FURTHER ASSURANCE. Distributor agrees to report all
infringement or improper or unauthorized use of COREL's trademarks, trade
names, logos or insignia, including the COREL Marks which come to the
attention of Distributor. Distributor further agrees to execute all
documents and further assurances reasonably required by COREL to
register or protect COREL's rights.
4. TERM OF AGREEMENT
4.01 EFFECTIVE DATE. This Agreement shall be effective as of the date first
written above.
4.02 INITIAL TERM. The initial term of this Agreement shall commence upon
the date first written above and shall continue, subject to section 13,
for a period of twelve (12) months from such date.
4.03 RENEWAL. Subject to section 13, this Agreement shall be renewed for
subsequent periods of [ * ] at the end of the prior [ * ]
term unless either party notifies the other at least [ * ] prior
to the expiration of the term that it does not wish to renew the
Agreement for a further [ * ] term.
5. RESPONSIBILITIES OF DISTRIBUTOR
5.01 ACCEPTANCE OF EULA. Distributor shall display to Customer the
applicable End User License Agreement ("EULA") as provided by COREL for
the Schedule "A" Software
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prior to download of the Schedule "A" Software by Customer. Distributor
shall require all Customers to either accept or reject the terms and
conditions of the EULA via a point and click mechanism or other
mechanism acceptable to COREL prior to download and in the event
Customer rejects the EULA, Customer shall not be permitted to download
or purchase the Schedule "A" Software. Distributor agrees that the
mechanism used by Distributor to require Customers to accept or reject
the EULA shall be in a form which will record and store all Customer's
acceptance of the EULA for future reference.
5.02 RESTRICTIONS. Distributor shall distribute the Schedule "A" Software
only in the form provided by COREL as part of a Product, and shall
distribute the Schedule "B" Software only in the form provided by
COREL, and shall not alter the Software, Software packaging thereof or
End User License or any part thereof except as provided in section
5.03. Distributor shall not rent the Software or Products or
knowingly distribute or resell to anyone who rents same or infringes
COREL's rights. Should Distributor become aware of or receive notice
from COREL, Distributor shall immediately discontinue all distribution
of Software to Customers who rent same or infringe COREL's rights.
Distributor shall impose this same restriction on all Customers, other
than end users, who purchase Software from Distributor.
5.03 DISTRIBUTOR MATERIALS. Distributor shall be entitled to add Electronic
Distributor Materials in the electronic package which shall include
only the Schedule "A" Software, Documentation and End User License
Agreement, provided that the additions in no way alter the features or
functionality of the Schedule "A" Software except as permitted and
authorized in writing by COREL, nor create any obligations, warranties
or representations on behalf of COREL. In no event shall Distributor
be permitted to modify the End User License Agreement. Distributor
may append code, data files, serialization, or ancillary software
programs to the Schedule "A" Software, or encapsulate the Schedule "A"
Software in an electronic envelope, for the purpose of performing
Electronic Software Distribution, maintaining or preserving Customer
information, or authenticating the purchase and distribution of
Schedule "A" Software. To the extent the distribution and purchase of
Schedule "A" Software is authorized by COREL, Distributor may modify
the functionality of the Schedule "A" Software to allow limited-time
or limited-functionality trial use or similar "try-before-buy" uses of
the Schedule "A" Software.
5.04 COMPLIANCE WITH LAWS. Distributor shall comply with all laws, rules,
regulations and industry standards existing with respect to the
Software and the performance by Distributor of its obligations
hereunder in the jurisdictions where Distributor carries on activities
under this Agreement and where Software is resold or distributed from
time to time. Distributor shall not export the Software unless such
export complies with any applicable export laws and regulations as
they apply to the Software.
5.05 REPORTS. Distributor shall provide COREL with monthly reports detailing
information on its distribution of all Software and inventory costs of
Schedule "B" Software. Upon COREL's request for credit purposes,
Distributor shall provide a copy of the current financial statement
within (7) days.
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*CONFIDENTIAL TREATMENT REQUESTED
5.06 UPGRADES. In the distribution by Distributor of any Software upgrades,
Distributor shall comply with all requirements on the resale of such
upgrades which COREL generally imposes on other distributors of
upgrades. Distributor shall impose this same restriction on all
Customers other than End Users, who purchase upgrades from Distributor.
5.07 CUSTOMER SUPPORT. Distributor shall support connections by Customers
using Internet browsers with Windows(R) 3.1; Windows(R) 95; Windows(R)
NT, Macintosh(R), UNIX, and OS/2 operating systems, or other operating
systems as agreed to by COREL and Distributor. Distributor shall
provide all Electronic Software Distribution and download support for
the Schedule "A" Software to Customers. In addition, Distributor
shall provide all support necessary for online commercial transactions
engaged in by Customers accessing Distributor's Web Site or utilizing
the Distributor System.
5.08 DISTRIBUTOR WEB SITE. Distributor shall maintain Distributor Web Site
sufficient to provide Customers access to Distributor's Web Site 24
hours per day, 7 days per week to enable Electronic Software
Distribution of Schedule "A" Software to Customers or the purchase of
Schedule "B" Software by Customers. Distributor shall provide all
hardware programming logistics for Distributor System and Distributor
Web Site including, but not limited to, integrated shopping basket,
credit card processing, Hard Goods fulfillment and COREL Club
Memberships.
5.09 PRESS RELEASES. Distributor agrees that all information released to the
media or the general public, including press releases and communications
with COREL Club members or Customers, shall require prior written
approval by COREL.
5.10 DEDICATED DATABASE. Distributor shall develop and maintain a COREL
dedicated Oracle 7 database, or other form of database as required by
COREL from time to time, which shall contain all Customer information
collected by Distributor ("Dedicated Database"). Distributor shall
not maintain any third party information on the Dedicated Database.
COREL shall be entitled to immediate onsite access to the Dedicated
Database with twenty-four (24) hour notice to review the contents
thereof, including all current reports and data. Distributor agrees
that: (i) all information collected by Distributor on the Dedicated
Database is the Proprietary Information of COREL and shall be governed
by Section 8 herein; (ii) upon termination or expiration of this
Agreement, Distributor shall immediately provide all information
contained on the Dedicated Database, and any other Customer
information under the possession or control of Distributor, to COREL;
(iii) Distributor is [ * ] information; and (iv) COREL is in no way
restricted in the use of the Dedicated Database or Customer
information. Upon termination or expiration of this Agreement,
Distributor may retain a copy of the Customer information contained in
the Dedicated database for verification purposes regarding this
Agreement, and the limitations contained in Sections 5.10 and 8
regarding the disclosure and use of Customer information do not apply
to data obtained or identified by Distributor which can be
demonstrated as arising from or within a third party or independent
source.
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*CONFIDENTIAL TREATMENT REQUESTED
5.11 REPORTS. Distributor shall provide to COREL a quarterly database report
and on-going Distributor System reports as more fully described in
Schedule "D" hereto.
5.12 LOCALIZATION. In the event COREL determines that Distributor's Web Site
should be localized, all localization shall be done by COREL, and all
ownership of the localized works and intellectual property rights in
the localized works, including without limitation copyright relating
to the localized works and trademarks used in association with the
localized works, but excluding any intellectual property rights in or
related to Distributor's electronic commerce or software distribution
system, shall remain the property of COREL.
5.13 ACCOUNT MANAGER. Distributor agrees to assign a dedicated COREL account
manager as the point of contact for COREL.
5.14 COREL EMPLOYEES. Distributor agrees that any COREL employee shall be
permitted to download COREL photoimages from Distributor Web Site
without charge. Distributor shall not be responsible for the
unauthorized downloading, distribution, or use of such photoimages
performed or facilitated by any COREL employee.
5.15 DISTRIBUTOR SYSTEM. Distributor shall utilize its best efforts to
establish a fully functional Distributor System by [ * ].
Distributor shall be responsible for processing all Customer orders
and credit card transactions. Distributor shall use best efforts to
make the Distributor System processing service available 24 hours per
day, 7 days per week. Distributor shall provide processing for VISA,
Mastercard, American Express and Discover credit cards or other credit
cards as are reasonably requested by COREL. COREL will similarly take
such steps are necessary to establish a connection with Distributor
and use commercially reasonable efforts to keep that connection
operating.
5.16 CREDIT CARD PROCESSING. Distributor shall submit and process all credit
card transactions as quickly as is reasonably practical for Distributor's
electronic commerce system in light of Customer instructions and
required third-party connections, from the time of receipt by
Distributor, which in most circumstances shall not exceed [ * ] in
addition to any Internet or third-party processor associated delays.
5.17 DISTRIBUTOR SYSTEM MAINTENANCE. Distributor shall provide twenty four
(24) hours notice to COREL of any planned interruption of Distributor
System or Distributor Web Site for maintenance or any other purpose.
In the event Distributor fails to provide such notice, Distributor
shall pay those Downtime Charges as set forth in Schedule "D" hereto.
5.18 DISTRIBUTOR WEB SITE FAILURE. In the event Distributor System or
Distributor's Web Site ceases to be available to Customers by reason
of some failure of equipment or services (whether or not caused by
Distributor or constituting Force majeure as described in section
16.06), Distributor will use its best efforts to restore the
Distributor System and/or Distributor Web Site to normal operating
condition as soon as is reasonably practical and,
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*CONFIDENTIAL TREATMENT REQUESTED
in addition, shall immediately advise COREL of any such failure and
provide a Failure Report as more fully described in Schedule "D" hereto.
5.19 SSL NOTICE. Distributor shall provide a notice to Customers prior to
any input of Customer information that those Customers without browsers
containing Secure Socket Layer technology are advised to phone in all
Software orders to promote the security of their Customer information.
Distributor will provide COREL with such notice for their approval.
6. RESPONSIBILITIES OF COREL
6.01 PROMOTIONAL MATERIALS. COREL shall furnish Distributor, at no charge,
with sales aids, product briefs, brochures and similar literature and
materials with respect to the Software which COREL generally makes
available to distributors without charge.
6.02 SUPPORT FOR CUSTOMERS. COREL shall be responsible for providing
maintenance and technical support for the Software to Customers in
accordance with COREL's standard procedures as they may be changed by
COREL from time to time. Such maintenance and technical support shall
in no way apply to Electronic Software Distribution and download
support for the Schedule "A" Software or Customer use of the
Distributor System.
6.03 PREPARATION OF SOFTWARE FOR DISTRIBUTION. COREL agrees to provide
assistance as is commercially reasonable to Distributor to assist
Distributor to prepare Schedule "A" Software for Electronic Software
Distribution, including the provision of an End User License, or other
electronic documentation as provided by COREL, in COREL's sole
discretion.
7. PAYMENTS
7.01 AMOUNTS PAYABLE. Distributor shall pay COREL as follows:
7.01.1 Distributor shall pay COREL an amount equal to Schedule "A"
Software Price multiplied by the number of copies of the Schedule "A"
Software distributed by Distributor to Customers in each [ * ]
period, such amounts to be paid within [ * ] of the close of that
[ * ] period.
7.01.2 For the first [ * ] period, Distributor will pay COREL the
Software Price for each copy of the Schedule "B" Software or Hard Goods
which are sold by Distributor to Customers. Schedule "B" Software and
Hard Good Prices will be payable by Distributor within [ * ] of
sale by Distributor to Customer of the items to which they relate, such
amounts to be paid within [ * ] of the close of that [ * ]
period. Distributor shall not be bound by any retail pricing suggested
by COREL except to the extent required for compliance with relevant
advertising and consumer protection
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*CONFIDENTIAL TREATMENT REQUESTED
laws.
7.02 NOTICE OF CHANGES. During the term of this Agreement, COREL shall have
the right to change the Software Prices for any of the Software. In the
event that COREL raises the Software Prices for Schedule "B" Software,
all orders for Schedule "B" Software placed prior to the effective
date of the increase shall be invoiced to Distributor at the lower
amount. In the event that COREL lowers the Software Prices for
Schedule "B" Software, COREL shall grant to Distributor a credit
against future orders equal to the difference between the Schedule "B"
Software Prices paid by Distributer for Schedule "B" Software and the
reduced Software Prices for each unit of Schedule "B" Software
purchased by Distributor within thirty (30) days prior to the date the
reduced price is first offered and remaining in the inventory of
Distributor on the date the reduced price is first offered.
7.03 SHIPMENT. COREL will ship the Schedule "B" Software and Hard Goods to
Distributor freight [ * ] pursuant to purchase orders placed by
Distributor with COREL. All shipments will be shipped [ * ].
In the event Distributor's warehouse location changes, Distributor
will provide COREL with written notice.
7.04 TAXES. Distributor shall be responsible for collecting and paying, in
addition to all amounts specified in this Agreement, all foreign,
federal, state, county, or local taxes arising from Distributor's
business operation or Distributor's transactions with Customers, to
the extent such taxes are based upon the purchase or distribution of
the Software or Hard Goods by or to Customers. In the event any
payments required to be made by Distributor under this Agreement are
subject to applicable withholding tax that Distributor is required to
deduct from such payments, Distributor shall promptly deliver to COREL
receipts issued by appropriate government authorities for all such
taxes withheld or paid by Distributor and Distributor shall fully and
promptly cooperate with COREL to provide such information and records
as COREL may require in connection with any application by COREL to
obtain available tax credits.
7.05 LATE PAYMENT. If Distributor is more than thirty (30) days in arrears
under this Agreement, COREL will give written notice to Distributor
that Distributor is responsible for payment of all outstanding amounts
and finance charges. If the outstanding amounts are not paid within
ten (10) days of such notice, COREL has the right to terminate this
Agreement. Late payments will be assessed a one percent (1%) finance
charge per month (twelve percent (12%) per annum) or the highest
finance charge permitted by applicable law, whichever is less.
Distributor shall pay all costs including reasonable attorney's fees,
incurred by COREL in collecting overdue amounts. In addition, if
Distributor is in arrears to any extent under this Agreement, COREL
may hold further shipments until all arrears have been paid.
7.06 U.S. CURRENCY. All payments to COREL pursuant to this Agreement shall
be made in the lawful currency of the United States of America and all
amounts referred to in this Agreement are in the lawful currency of
the United States of America.
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*CONFIDENTIAL TREATMENT REQUESTED
7.07 STOCK BALANCING. Distributor may order and return Schedule "B" Software
for the first [ * ] month period from the date of this Agreement
([ * ]Period), Distributor may, from time to time and at
[ * ] expense, return the Software described in Schedule "B" or
Hard Goods as [ * ] Merchandise to COREL. Distributor must obtain
RMA (Return Material Authorization) prior to return of any [ * ]
Software to COREL. Distributor and COREL agree that they shall review
this section 7.07.1 at least thirty (30) days prior to the end of the
[ * ] Period to determine whether or not any extension of the
[ * ] Period shall be granted to Distributor by COREL. Any such
extension shall only be effective if in writing and signed by an
authorized signing officer of COREL.
7.08 AUDITS. Distributor agrees to maintain complete and accurate records
relating to its promotion, marketing, use and distribution of the
Software. COREL shall have the right no more often than once every
six (6) month period, and upon five (5) business days notice to
appoint a nationally recognized auditing firm to examine Distributor's
books and records in order to verify Distributor's compliance with the
promotional marketing use, distribution and payment terms of this
Agreement. Any such audit shall be at the expense of COREL unless the
audit reveals a non-compliance by Distributor with the terms of this
Agreement in which case the audit shall be at the expense of
Distributor, in addition to paying any deficit to COREL.
7.09 SOFTWARE AND SOFTWARE PRICE. During the term of this Agreement, COREL
shall have the right to change the Software Prices for any of the
Software. COREL shall be entitled to: (i) increase the Software
Prices or discontinue any Software at any time upon thirty (30) days
prior written notice to Distributor; and (ii) decrease the Software
Prices at any time upon notice to Distributor. In all such cases
COREL shall provide Distributor with a revised Schedule "A" and
Schedule "B". New software shall be added to Schedule "A" or "B" by
mutual written agreement of the parties. In the event COREL
discontinues any Schedule "A" Software, Distributor shall immediately
remove all discontinued Schedule "A" Software from Distributor's Web
Site and Distributor's server and erase or destroy any Schedule "A"
Software contained on Distributor computers and/or computer diskettes
in its possession or under its control.
8. CONFIDENTIALITY
8.01 PROPRIETARY INFORMATION. "Proprietary Information" means, in the case
of information disclosed by COREL to Distributor: (i) the terms and
conditions of this Agreement; (ii) any information provided to
Distributor by COREL to enable Distributor to perform the Electronic
Software Distribution; (iii) the names, telephone numbers, addresses,
and credit card information of any Customer or any information
relating to Customers obtained by Distributor relating to a
transaction (herein "Customer information"); (iv) all other Dedicated
Database and Customer information as more fully described in section
5.10 herein; and (v) any information with respect to COREL which it
has received or may in the future receive in connection with this
Agreement which is not otherwise
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available to the general public without restriction. "Proprietary
Information" means, in the case of information disclosed by Distributor
to COREL: (i) the terms and conditions of this Agreement, (ii) any
information relating to Distributor's electronic commerce system, file
encryption, encapsulation, or code appending procedures, or data
analysis and forecasting methods, and (iii) any information with respect
to Distributor which it has received or may in the future receive in
connection with this Agreement which is not otherwise available to the
general public without restriction. In the case of information received
by either COREL or Distributor, Proprietary Information does not include
information that: (i) prior to or after the time of disclosure becomes
generally available or readily ascertainable in substantially the same
and useable form through appropriate means without undue research,
refinement, derivation, or experimentation; (ii) is disclosed to the
receiving party by a third party under no legal obligation to maintain
the confidentiality of such information; (iii) is in the possession of
the receiving party at the time of disclosure without any obligation of
confidentiality, or (iv) is otherwise excluded by this Agreement.
Proprietary Information shall be treated confidentially by the receiving
party and its employees and contractors, and except as authorized in
this Agreement shall not be used or disclosed by the receiving party
without the disclosing party's prior written consent.
8.02 TREATMENT OF PROPRIETARY INFORMATION. The receiving party shall not
duplicate all or any part of the disclosing party's Proprietary
Information, except in accordance with the terms and conditions of
this Agreement. Each party shall have an appropriate agreement with
each of its employees and contractors having access to the other
party's Proprietary Information sufficient to enable that party to
comply with all the terms of this Agreement. Each party agrees to
protect the other party's Proprietary Information with the same
standard of care and procedures which it uses to protect its own trade
secrets and confidential or proprietary information of like importance
and, in any event, shall adopt or maintain procedures reasonably
calculated under the circumstances to protect such Proprietary
Information.
8.03 FURTHER TREATMENT OF PROPRIETARY INFORMATION. Each party agrees to hold
all Proprietary Information of the other party in trust and confidence
for the other party and not to use the same other than as expressly
authorized under and to carry out the purposes of this Agreement. The
receiving party agrees not to disclose any such Proprietary
Information without the prior written consent of the disclosing party,
to anyone other than the receiving party's employees and contractors
who have a need to know same to carry out the rights granted hereunder
or to agents, or contractors who have a need to know same to carry out
the rights granted hereunder and with whom the receiving party has a
valid nondisclosure agreement, or as required under any applicable law
or regulation.
8.04 EQUITABLE RELIEF. In recognition of the unique and proprietary nature
of the information disclosed by each party, it is agreed that each
party's remedy for breach by the other party of its obligations under
this section 8 shall be inadequate and the disclosing party shall, in
the event of such breach, be entitled to equitable relief, including,
without limitation, injunctive relief and specific performance, in
addition to any other remedies provided
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*CONFIDENTIAL TREATMENT REQUESTED
hereunder or available at law.
9. COREL WARRANTIES AND OTHER REPRESENTATIONS
9.01 WARRANTY. The Schedule "B" Software storage medium is warranted by
COREL to End Users against defects in workmanship and materials for a
period of ninety (90) days from the date it is delivered to the End
User. In the event that the storage medium is defective, COREL will
replace it free of charge with another copy of the Schedule "B"
Software. Replacement of the Schedule "B" Software shall be COREL's
sole obligation and Distributor's sole remedy for a breach of the
warranty in this section.
9.02 LIMITATION. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THE SOFTWARE,
AND STORAGE MEDIA ARE PROVIDED AND LICENSED BY COREL "AS IS" AND THERE
ARE NO WARRANTIES, REPRESENTATIONS OR CONDITIONS, EXPRESSED OR
IMPLIED, WRITTEN OR ORAL, ARISING BY STATUTE, OPERATION OF LAW OR
OTHERWISE, REGARDING THEM OR ANY OTHER GOODS OR SERVICE PROVIDED BY
COREL HEREUNDER OR IN CONNECTION HEREWITH. COREL DISCLAIMS ANY
IMPLIED WARRANTY OR CONDITION OF MERCHANTABLE QUALITY,
MERCHANTABILITY, DURABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO
REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING BUT NOT LIMITED
TO STATEMENTS REGARDING PERFORMANCE OF THE SOFTWARE, OR STORAGE MEDIA,
WHICH IS NOT CONTAINED IN THIS AGREEMENT, SHALL BE DEEMED TO BE A
WARRANTY BY COREL.
9.03 NO VARIATION. NO AGREEMENTS VARYING OR EXTENDING TIES WARRANTY OR THE
FOREGOING LIMITATIONS WILL BE BINDING ON COREL UNLESS IN WRITING AND
SIGNED BY AN AUTHORIZED REPRESENTATIVE OF COREL.
9.04 DISTRIBUTOR NOT TO BIND. Distributor will not give or make any
warranties or representations on behalf of COREL as to quality,
merchantable quality, merchantability, fitness for a particular use or
purpose, or any other features of the Software; and Distributor shall
not incur any liabilities, obligations, or commitments on behalf of
COREL, including without limitation, a variation of the End User
License Agreement (EULA).
9.05 [ * ] shall be liable for any breach of warranty alleged or
claimed by any End User, or implied or imposed by statute or common law,
relating to the Software, its distribution, or the use of its electronic
commerce system by Customer or End User.
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10. DISTRIBUTOR WARRANTIES
10.01 YEAR 2000 COMPLIANCE. Distributor warrants that all hardware, software,
and firmware used by Distributor or in Distributor's System shall be
able to accurately process data (including but not limited to
calculating, comparing, and sequencing) from, into, and between the
twentieth and twenty-first centuries, including leap-year calculations.
10.02 ENCRYPTION WARRANTY. Distributor warrants that the Distributor System
shall receive and transmit all Customer information in encrypted
format when Customers utilize browsers compliant with Secure Socket
Layer technology. Distributor further warrants that the Distributor
System encryption protocol will prevent unauthorized access to and use
of Customer information received by Distributor to the extent
reasonably practical with such technology, and that to the best of
Distributor's knowledge the algorithm has never been breached as of
the date of this Agreement. Distributor shall continue to update the
Distributor System with encryption technology reasonably suited and
intended for this application as it is shown to be effective and
becomes available. Neither COREL nor Distributor shall be responsible
or liable to any Customer or End User or each other for any acts of
fraud, theft, misappropriation, tampering, hacking, interception,
piracy, misuse, misrepresentation, dissemination, or other illegal or
unauthorized activities of third parties involving Customer
information.
11. INFRINGEMENT
11.01 DEFENSE AND SETTLEMENT. If notified promptly in writing of any action
(and all prior related claims) brought against Distributor alleging
that Distributor's resale, distribution, or other disposition of the
Software or Hard Goods under this agreement infringes any Canadian or
United States patent, trademark, trade dress, copyright, or similar
intellectual property right, COREL will defend that action at its
expense and will pay all costs and damages of any type awarded against
Distributor in the action, provided that: (i) COREL shall have sole
control of the defense of any such action and all negotiations for its
settlement or compromise; (ii) Distributor, and where applicable,
those for whom Distributor is in law responsible, cooperate fully with
COREL in its defense of the action; and (iii) COREL shall have no
liability if the action results from the use of the Software for
purposes or in an environment for which it was not designed or
intended, or due to modification of the Software, including, but not
limited to, combination with Electronic Distributor Materials, by
anyone other than COREL.
11.02 OPTIONS WHERE CLAIM. If a final injunction is obtained in such action
against Distributor's resale of the Software or if in COREL's opinion
the Software is likely to become the subject of a claim of
infringement, COREL may at its sole option and expense either procure
for Distributor the right to resell the Software or replace or modify
the Software so that it becomes non-infringing.
<PAGE>
*CONFIDENTIAL TREATMENT REQUESTED
12. LIMITATION OF LIABILITY
12.01 LIMITATION. IN NO EVENT WILL [ * ] BE LIABLE FOR INCIDENTAL,
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, OR ANY DAMAGES WHATSOEVER
RESULTING FROM LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SOFTWARE
OR STORAGE MEDIA, OR OTHER COREL-PROVIDED MATERIAL, WHETHER IN AN ACTION
IN CONTRACT OR TORT, INCLUDING BUT NOT LIMITED TO NEGLIGENCE, AND
WHETHER OR NOT [ * ] HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. This section shall not apply to breach of [ * ]
obligations under sections [ * ] inclusive, [ * ] and
[ * ].
12.02 AGGREGATE LIABILITY. Other than as provided in section 10, COREL's
aggregate liability to Distributor whether for negligence, breach of
contract, misrepresentation or otherwise shall in respect of a single
occurrence or a series of occurrences in no circumstances exceed the
Software Prices paid by Distributor to COREL over the twelve (12)
month period preceding the claim by Distributor.
13. DISTRIBUTOR INDEMNIFICATION
13.01 INDEMNIFICATION. Except as set forth in Section 11, Distributor agrees
to indemnify and save COREL harmless from and against any and all
claims, demands, costs and liabilities (including all reasonable legal
and attorney fees and expenses) finally awarded of any kind
whatsoever, arising directly or indirectly out of claims by
Distributor's Customers or any third party relating to: (i)
Distributor's performance under this Agreement; (ii) Electronic
Distributor Materials or the combination of Schedule "A" Software with
Electronic Distributor Materials; (iii) Distributor's distribution of
the Schedule "A" Software through Electronic Software Distribution or
distribution of the Schedule "B" Software through Distributors System;
(iv) the maintenance and functionality of the Distributor Web site
(excluding COREL-provided content); (v) breach of Section 10,
warranties; or (vi) misuse of any Customer or credit card information
submitted to Distributor. Distributor agrees to its best efforts to
become bonded to cover its liability under this Section 13.01 (vi) and
to institute such procedures to minimize any such misuse by
Distributor's agents and employees and by the agents and employees of
its third party processors.
14. TERMINATION
14.01 TERMINATION. This Agreement will terminate in the event of any of the
following:
14.01.1 written notice of termination from COREL, effective
immediately, under section 7.05;
<PAGE>
*CONFIDENTIAL TREATMENT REQUESTED
14.01.2 written notice of termination from COREL, effective
immediately, in the event Distributor fails to establish a
fully functional Distributor System by [ * ];
14.01.3 on the thirtieth (30th) day after one party gives the other
written notice of a material breach by the other of this
Agreement and a request for a cure, unless the breach is
cured before that day;
14.01.4 written notice of termination by one party, effective
immediately, after a receiver has been appointed in respect
of the whole or a substantial part of the other's assets or
a petition in bankruptcy or for liquidation is filed by or
against that other or if the other has been dissolved or
liquidated or is insolvent, as permitted by applicable
governing rules or statutes relating to such petition in
bankruptcy or for liquidation; or
14.01.5 written notice of termination, effective immediately, by the
non-breaching party, if Distributor or COREL has materially
breached its obligations under Section 8.
14.02 NO COMPENSATION. Distributor acknowledges and agrees that it has no
expectation that its business relationship with COREL will continue
for any minimum period of years, or that Distributor shall obtain any
anticipated amount of profits by virtue of this Agreement. Neither
COREL nor Distributor shall be liable, by reasons of any termination
of this Agreement, for compensation, reimbursement, or damages on
account of the loss of prospective profits on anticipated orders, or
on account of expenditures, investments, leases, or commitments
whatsoever in connection with the business or goodwill of the other.
15. EFFECT OF TERMINATION
15.01 DISTRIBUTOR. In the event of termination hereof Distributor shall:
15.01.1 perform with respect to COREL all payment and other
obligations of Distributor arising hereunder within thirty
(30) days of termination;
15.01.2 immediately cease to use the COREL Marks in any manner
whatsoever; and
15.01.3 immediately discontinue the Distributor Web Site.
15.02 SURVIVAL. Sections 2.02, 3.04, 5.04, 7 to 10 inclusive, 11.01, 12,
14.02, 15, and 16 shall survive the termination of this Agreement.
15.03 NO PREJUDICE. Except as provided in section 14.02, termination
hereunder shall be without
<PAGE>
prejudice to any other right or remedy to which either party may
be entitled hereunder in law.
15.04 DESTROY OR DELIVER UP. At termination, Distributor shall erase or
destroy any unlicensed Schedule "A" Software contained on Distributor
computers and/or computer diskettes in its possession or under its
control. COREL shall have the option to require Distributor to
destroy and certify that it has destroyed or to deliver to COREL, any
property of COREL then in its possession or under its control,
excluding that Software or Hard Goods which Distributor has purchased
for as own use. Distributor may retain one copy of such information
in a secure location for verification purposes.
16. MISCELLANEOUS
16.01 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof, and
supersedes all prior statements, representations, discussions,
negotiations, and agreements, both oral and written, including all
pre-printed terms and conditions appearing on Distributor's order
forms, COREL's acknowledgment of order forms, and COREL's invoice
forms.
16.02 AMENDMENT OR WAIVER. Except to the extent permitted by this Agreement
or the Schedules appended hereto, this agreement may not be amended or
modified except in a writing signed by authorized officers of both
parties. No order, invoice, or similar document will modify the terms
of this agreement even if accepted by the receiving party.
16.03 ILLEGAL OR UNENFORCEABLE PROVISIONS. In the event that any one or more
of the provisions of this agreement shall be found to be illegal or
unenforceable, this agreement shall nevertheless remain in full force
and effect, and such term or provision shall be deemed severed unless
such severance defeats the purpose of this Agreement or results in
substantial injustice to one of the parties.
16.04 INDEPENDENT CONTRACTORS. The parties to this agreement are independent
contractors. No relationship of principal to agent, master to servant,
employer to employee, or franchisor to franchisee is established hereby
between the parties. Neither party has the authority to bind the other
or incur any obligation on its behalf.
16.05 NON-RESTRICTIVE RELATIONSHIP. Nothing in this agreement shall be
construed to preclude Distributor from distributing any software
regardless of whether or not such software is the same as or
competitive with any COREL Software.
16.06 FORCE MAJEURE. Unless continuing for a period of ninety (90)
consecutive days or unless involving the payment of amounts due under
this Agreement beyond thirty (30) days from the date for which the
payment is due, no default, delay or failure to perform on the part of
either party shall be considered a breach of the agreement if such
default, delay, or failure to perform is shown to be due entirely or
proximately to any event constituting
<PAGE>
force majeure, or to causes beyond the reasonable control of the
defaulting party, including without limitation strikes, lockouts of
other labor disputes, riots, civil disturbances, actions or inactions
concerning government authorities, epidemics, war, embargoes, severe
weather, fire, earthquakes, acts of God or the public enemy, default of
a common carrier, interruption of power or communications sources or
connections, failures in or affecting the performance, use, or
availability of the Internet or associated intranets, viruses, the
terroristic, illegal, malicious, wanton, or capricious acts a third
party, changes or modifications in international, national, or industry
standards or protocols, and the existence of or changes in federal or
state laws or the laws of other countries prohibiting or imposing
criminal penalties or civil liability for performance hereunder, always
provided that the party so relieved of its obligations shall promptly
and lawfully take such steps to prevent, correct or amend such act or
event which renders such obligations impossible as are reasonable under
the circumstances.
16.07 NO WAIVER. In either of the party's rights to enforce provisions of this
agreement shall be affected by any prior course of dealing, waiver,
delay, omission, or forbearance.
16.08 ASSIGNMENT. This agreement and the rights granted hereunder shall not
be assigned, encumbered by security interest or otherwise transferred
by Distributor without the prior written consent of the COREL. An
amalgamation or merger of Distributor or COREL with any person who is
not a party to this Agreement shall be deemed to result in an
assignment of this agreement. COREL may assign this agreement at any
time upon notice to this effect to Distributor.
16.09 ENUREMENT. This Agreement shall enure to the benefit of and be binding
upon the parties and their respective successors and permitted assigns.
16.10 NOTICES. Any notice or other communication to the parties shall be sent
to the addresses set out above, or such other places as they may from
time to time specify by notice in writing to the other party. Any
such notice or other communication shall be in writing, and, unless
delivered to a responsible officer of the addressee, shall be given by
registered mail, facsimile or telex and shall be deemed to have been
given when such notice should have reached the addressee in the
ordinary course, provided there is no strike by postal employees in
effect or other circumstances delaying mail delivery, in which case
notice shall be delivered or given by facsimile or telex.
16.11 FURTHER ASSURANCES. The parties agree to do all such things and to
execute such further documents as may reasonably be required to give
full effect to this Agreement.
16.12 TIME. Time shall be of the essence.
16.13 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota and the laws of
these United States, excluding that body of law applicable to choice
of law and excluding the United Nations Convention on Contracts for
the International Sale of Goods and any legislation implementing such
<PAGE>
Convention, if otherwise applicable. Distributor hereby consents and
jurisdiction of the courts of such province. If either party employs
attorneys to enforce any rights arising out of or relating to this
agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees.
16.14 LANGUAGE. The original of this agreement has been written in English
and each party waives any right it may have to have this agreement
written in any other language. The parties represent that they have
the ability to read and write in English, and have read and understand
this agreement. If this agreement is translated into a language other
than English, the English version and interpretation shall govern and
prevail. All communications between the parties hereunder shall be in
English.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed by
their duly authorized representatives as of the date first above written.
DIGITAL RIVER, INC.
Per: /S/ Joel Ronning
--------------------------
Name: Joel Ronning
Title: President
COREL CORPORATION (USA)
Per: /s/ Mitch Despochers
--------------------------
Name: Mitch Despochers
Tittle: Controller
<PAGE>
SCHEDULE "A"
SOFTWARE AND SOFTWARE PRICES FOR SCHEDULE "A" SOFTWARE
<PAGE>
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 'A'
USD CDN
[ * ]
<PAGE>
SCHEDULE "B"
SOFTWARE AND SOFTWARE PRICES FOR SCHEDULE "B" SOFTWARE
<PAGE>
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 'B'
USD CDN
[ * ]
<PAGE>
SCHEDULE "C"
GUIDELINES FOR USING COREL MARKS
<PAGE>
GUIDELINES FOR USING COREL LOGOS
Corel logos or trademarks in stylized form (the "Marks") are valuable assets and
may be used publicly with permission only from Corel. In order to protect the
value of these assets, Corel must maintain control over the manner in which the
Marks are used. Corel has established the following set of guidelines for
properly using the Marks. If these guidelines are not followed, Corel may
terminate your right to use the Marks.
* Upon request, COREL will provide authorized users with camera
ready artwork of the Marks. This artwork may not be altered in
any way.
* You may not display the Marks on packaging, documentation,
collateral or advertising in a manner which suggests that your
product is a COREL product, or in a manner which suggests that
COREL or any of the Marks are a part of your product name.
* When displayed, the Marks cannot be larger than or more prominent
than your product name, trade-mark, logo or trade name.
* When displayed, the Marks must stand alone. AL minimum amount of
empty space must be left between the Marks and any other object
such as type, photography, borders, edges, etc. The required
border of empty space around the Marks must be 1/2x wide, where x
is the height of the Mark.
* You may not combine the Marks with any other feature including,
but not limited to, other logos, words, graphics, photos,
slogans, number, design features, or symbols.
* None of the Marks may be used as a design feature on your
product, product packaging, documentation, collateral or
advertising.
COREL LOGOS INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING:
1. COREL LOGO
The word COREL is used in association with Corel's stylized "C" in two different
forms as follows:
[COREL LOGO] [COREL LOGO]
(Form A) (Form B)
<PAGE>
2
The logo is approved for use in black or colour. If used in colour, the C must
be reproduced in red (PMS 186) and the word COREL must be reproduced in blue
(PMS 293). The logo should be used only in the forms depicted above. The logo
should be identified with the -Registered Trademark- symbol in the following
countries:
Canada, Germany, United Kingdom, United States, Austria, Benelux,
France, Columbia, Finland, Poland, Norway, South Korea, Switzerland and
Taiwan.
The logo should be identified with the symbol (TM) in all other countries. The
(R) or (TM) symbol must appear at the top-right comer of the graphic. When
using the Marks in some countries where the symbol (TM) should be used as well
as other countries where the symbol (R) should be used, the symbol (TM) may be
used in all cases.
2. CORELDRAW! LOGO
This logo is used in the following design form:
[LOGO]
The logo is approved for use in black or with a coloured line in PMS Magenta.
The logo should be identified with the (R) symbol in Canada only.
The logo should be identified with the (TM) symbol in all other countries.
When used in text, the trade-mark must be depicted in the form CorelDRAW
3. BALLOON DESIGN LOGO
This logo is used in the following form:
[LOGO]
The logo should be identified with the (TM) symbol at the top right corner of
the graphic in all countries. Note that either the CorelDRAW logo or the Corel
trademark may be used on the balloon, provided properly identified.
<PAGE>
3
4. COREL VENTURA LOGO
This logo is used in the following form:
[LOGO]
The logo should be identified with the (TM) symbol at the top right comer of the
graphic in all countries.
5. COREL PROFESSIONAL CD-ROM PHOTOS LOGO
This logo is used in the following form:
[LOGO]
The logo should be identified with the (TM)symbol at the top right corner of the
graphic in all countries.
TRADEMARK NOTICE
All products sold and all advertisements or other printed materials distributed
displaying any of the Marks must, in an appropriate place, bear the following
notice:
IS A TRADE-MARK OF
COREL CORPORATION OR COREL CORPORATION LIMITED, USED
UNDER LICENSE.
QUALITY CONTROL
<PAGE>
Corel reserves the right to review your use of the Marks. Any specimens or
examples which are required to be delivered to Corel under the terms of your
license should be sent to ONE OF THE FOLLOWING:
COREL CORPORATION
THE COREL BUILDING
1600 CARLING AVENUE
OTTAWA, ONTARIO
K1Z 8R7
ATTENTION: PUBLISHING PROGRAMS(RELATING TO BOOKS/MAGAZINES)
ATTENTION: EDUCATION DEPARTMENT(TRAINING MATERIALS)
ATTENTION: MEDIA RELATIONS (ARTICLES/REVIEWS)
ATTENTION: LEGAL DEPARTMENT (IF NONE OF THE ABOVE APPLIES)
Corel reserves the right to conduct spot checks and will periodically request
samples. Corel may also conduct spot checks in the marketplace of advertising
and related printed materials. Failure to comply with standards of quality
specified by Corel, failure to adhere to these guidelines or failure to comply
with a request for samples is grounds for termination of your license.
<PAGE>
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE "D"
DISTRIBUTOR REPORTS AND FAILURE CHARGES
A. DISTRIBUTOR REPORTS:
Distributor shall provide to COREL the following reports:
(a) QUARTERLY REPORT. Distributor shall provide to COREL a report for each
fiscal quarter which shall capture the following information, or
information as reasonably requested by COREL from time to time:
(i) the frequency of use of Distributor Web Site by prospects
("Hits");
(ii) any and all data compiled by Distributor regarding Customer use
of the Web Site including, but not limited to, Customer name, address
and all Software selected by Customer from Distributor Web Site;
(iii) the number of new COREL Club memberships created by Distributor;
(iv) promotion, marketing and distribution activities of Distributor
during the quarter; and
(v) a summary of all Failure Reports.
(b) FAILURE REPORTS. Distributor shall provide a report to COREL within
[ * ] of an equipment or service failure relating to
Distributor's connection with COREL or Distributor's Web Site which
shall capture the following information, in addition to any
information which Distributor should otherwise provide to COREL to
enable COREL to evaluate the quality of the Distributor System:
(i) Cause of interruption or failure of Distributor System or
Distributor's Web Site;
(ii) duration of the interruption or failure; and
(iii) methods used to resolve the interruption or failure.
(c) ENCRYPTION PROTOCOL REPORTS. Distributor shall provide an [ * ]
report to COREL of any breach of the encryption protocol, the cause of
said breach, the duration of the breach, and the methods used to
resolve the breach.
(d) All Quarterly Reports required under this Agreement are to be: (i) faxed
to COREL within thirty (30) business days after each quarter end; and
(ii) provided in electronic (diskette) format to COREL within thirty
(30) business days after each quarter end. COREL can request reasonable
changes in the format of the report upon thirty (30) days notice.
(e) All Failure Reports and Encryption Protocol Reports required under this
Agreement are to be: (i) faxed to COREL immediately; and (ii) provided
in electronic format to COREL within thirty (30) business days after the
occurrence of each failure or interruption. COREL can request
reasonable changes in the format of the report upon thirty (30) days
<PAGE>
*CONFIDENTIAL TREATMENT REQUESTED
notice.
B. DOWNTIME CHARGES
In the event that Customers are unable to establish a link to the Distributor
Web Site for a period of [ * ] or more consecutive [ * ], and such
inability is not the result of a failure or interruption in the Internet or its
related or supporting infrustructure or the Customers' software, equipment,
facilities, provider, or communications connection, or COREL's failure to
maintain a connection with Distributor, then Distributor shall pay to COREL an
amount equal to the amount paid by Distributor to COREL under this Agreement for
the Distribution of Schedule "A" Software and Schedule "B"
Software and Hard Goods purchased during a period of equal duration and time
as averaged over the four same days of the week next preceding the period.
In the event such downtime occurs for more than [ * ] in each of any
[ * ] consecutive months, Distributor shall pay to COREL an amount
equal to the amount paid by Distributor to COREL under this Agreement for the
Distribution of Schedule "A" Software and Schedule "B" Software and Hard
Goods purchased during a period of equal duration and time as averaged over
the four same days of the week next preceding those periods.