Territorial Software Distribution Agreement - Lindows Inc. and livedoor Co. Ltd.
TERRITORIAL SOFTWARE DISTRIBUTION AGREEMENT
This Territorial Software Distribution Agreement ("Agreement") is entered into
this 14th day of April, 2004 (the "Effective Date"), by and between Lindows,
Inc., a Delaware corporation ("Supplier") and livedoor Co., Ltd., a Japanese
corporation ("Distributor").
WHEREAS, Supplier and Distributor previously entered into a Software
Distribution Agreement dated March 17, 2003 (the "Previous Agreement"); and
WHEREAS, the Previous Agreement shall expire on August 29, 2004, and Supplier
and Distributor desire to enter into this Agreement to continue the relationship
of the parties, whereby Distributor shall remain Supplier's exclusive
distributor of the Product in the Territory during the Licensed Term; and
WHEREAS, Supplier and Distributor understand and agree that this Agreement shall
replace and supersede the Previous Agreement and all provisions thereof, and all
other agreements between the parties, written or oral.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS:
(a) "Branding Guidelines" means Lindows' proprietary trade names, trade
dress, service marks, trademarks, logos, and indicia of origin and other
distinctive branding features as specified in the Lindows Branding Guidelines
attached hereto as Exhibit "C."
(b) "Customer" shall mean retail and end user purchasers of the Product
within the Territory.
(c) "Documentation" shall mean the end user manuals relating to the
Software and services and related materials provided by Supplier to Distributor
hereunder.
1
<PAGE>
(d) "Gold Master" shall mean a master disk image of the Software as made
available for delivery to Licensee via electronic download at the Builder
website http://www.lindows.com/builder or any successor website thereto or on
CD-ROM or other media.
(e) "OEM Customer" shall mean computer builders, system integrators of
computers, and value-added resellers of computers pre-installing LindowsOS on
complete computer systems actually within the Territory and who execute a valid
Builder Agreement located at http://www.lindows.com/licenses with Supplier.
(f) "Product" shall mean the Software and Documentation listed on Exhibit
"A" attached hereto, including any modification, improvements, alterations,
translations, localizations, innovations, or changes of any kind performed on
the Software or Documentation by Distributor.
(g) "Services" shall mean the services set forth in Exhibit "A" attached
hereto.
(h) "Software" shall mean the computer program(s) listed in Exhibit "A" in
machine executable object code format only.
(i) "Territory" shall mean the Nation of Japan.
(j) "Update" shall mean versions of the Product, including version
patches, subsequently released to the public for the purpose of correcting
errors and fixing software bugs, which shall be given by Supplier to
Distributor, pursuant to the terms set forth in Section 6(c). "Updates" does not
include subsequent versions of the Product that contain new features or
functionality, or which are considered a new software product.
2. APPOINTMENT: In consideration of the Exclusive Licensing Fee (as defined in
Section 5 below), Supplier hereby appoints Distributor, and Distributor hereby
accepts the appointment, as Supplier's sole and exclusive distributor in the
Territory for the Licensed Term (as defined in Section 9 below) to distribute
Localized Product (as defined in Section 2(d) below) on CD-ROM disks and
repackaged as set forth in Section 2(a) below directly to Customers in the
Territory. Subject to Section 2(j) below, the restrictions set forth in Section
(i) below, and the other terms and conditions of this Agreement, Supplier hereby
grants to Distributor a non-transferable, personal, non-sublicensable, except as
expressly set forth in this Section below, without the right to have
Distributor's rights exercised on behalf of Distributor by a third party,
limited right and license in the Territory during the Licensed Term of this
Agreement to:
(a) Copy and install the Software portion of the Localized Product (as
defined in Section 2(d) below) in object code format only onto copies of CD-ROM
disks and repackage such CD-ROM disks and the Documentation portion of the
Localized Product and with an end user license agreement (the "End User License
Agreement") with terms substantially the same as those set forth in Exhibit "B,"
both for distribution to Customers for retail sale within the Territory;
2
<PAGE>
(b) Distribute the Localized Product to Customers with and pursuant to the
End User License Agreement directly through Distributor's retail locations
within the Territory and Distributor's online retail site within the Territory.
(c) Set up OEM Customers for the distribution of Software, Documentation
and Localized Product pre-installed on the respective OEM Customer's computer
system products. Specifically this appointment shall be non-exclusive,
Supplier's OEM Customers shall be entitled to sell computer systems with the
Software and/or Documentation installed within the Territory, but Supplier will
not engage in securing OEM Agreements within the Territory, unless in
coordination with, and with compensation to Distributor as provided herein.
Distributor shall distribute the Software, Documentation and Localized Product
only to OEM Customers who have executed a valid Builder Agreement with Supplier,
only for installation in the Territory by such OEM Customer on such OEM
Customer's computer systems, only for distribution pre-installed on such OEM
Customer's computer systems within the Territory, and only for distribution to
Customers with and pursuant to the End User License Agreement.
(d) Translate and localize the English version of the Product into
appropriate Japanese language using the pre-existing translation applications
available to create a localized Product (the "Localized Product"). Supplier
reserves the right to terminate this Agreement in its sole and complete
discretion in the event that the Localized Product, does not operate effectively
or provide all defined functions, or is not accurate. Any translation and
localization problems or defects which do not entail Software malfunctioning,
operating defects, or inaccuracies shall not be deemed as a failure of
Supplier's reasonable requirements and shall not justify the termination of this
Agreement. Distributor shall have forty-five (45) days to cure to Supplier's
satisfaction after receiving written notification by registered letter of
Supplier's intention to terminate this Agreement, which notification shall
contain a detailed description of the grounds and requirements which are deemed
not to be satisfied. Absent the above-mentioned notice and cure period, any
termination shall be void and to not effect.
(e) Sublicense to third party distributors in the Territory Distributor's
rights under Sections 2(b) and 2(e) only, and to third party retailers in the
Territory Distributor's rights under Section 2(b) only, both pursuant to an
agreement consistent with and substantially the same as this Agreement (except
such agreement shall not include the rights set forth in Sections 2(c), 2(d) and
2(f)).
(f) Sublicense the Localized Product to Customers pursuant to the End User
License Agreement.
(g) Use the Product internally solely for the purpose of providing
customer support services, demonstrations and marketing purposes.
(h) For clarity, Distributor's rights under Section 2(b) shall include the
right for Distributor to distribute downloadable versions of the Localized
Product on-line and
3
<PAGE>
via the Internet, using both Distributor's facilities and hardware resources for
e-commerce, and any services, facilities and hardware resources supplied by
third party retailers who are validly sublicensed pursuant to Section 2(e). If
deemed necessary by any of the parties, further terms and conditions or the
material sale implementation procedures shall be settled with a further
agreement between the same parties, which shall be executed within a reasonable
amount of time after request in writing from either party.
(i) Subject to Section 2(j) below, Distributor shall not, and shall ensure
that any OEM Customer, distributor, retailer, Customer, or other third party
does not: (a) copy, reproduce, distribute or otherwise make available the
Software, Documentation, Product or Localized Product or any portion or element
of any of the foregoing except as and to the extent expressly authorized herein
and by Supplier; (b) translate, adapt, enhance, create derivative works of or
otherwise modify the Software, Documentation, Product or Localized Product or
any portion or element of any of the foregoing, except as expressly set forth in
Section 2(d) above, (c) decompile, disassemble or reverse engineer (except as
and to the extent permitted by applicable local law), or extract ideas,
algorithms, procedures, workflows or hierarchies from, the Software,
Documentation, Product or Localized Product or any portion or element of any of
the foregoing, (d) use the Software, Documentation, Product or Localized Product
or any portion or element of any of the foregoing to provide facility
management, service bureau or similar services to third parties; or (e)
reproduce or use in any manner (except solely as and to the extent expressly
authorized under Section 2 above), or remove, destroy, obscure or alter any
Lindows.com Branding Features or any related materials placed on or contained
within the Software, Documentation, or Product or any portion or element of any
of the foregoing. Distributor shall not, and shall not allow any other OEM
Customer, distributor, or retailer to, make any representation or warranty
binding on or purporting to bind Supplier, including but not limited to in
connection with the performance, condition, title, non-infringement,
merchantability, fitness for a particular purpose, system integration or data
accuracy of the Software, Documentation, Product or Localized Product or any
portion or element of any of the foregoing, and Distributor shall disclaim all
warranties implied by law and other warranties to the maximum extent permitted
by applicable law. Distributor shall comply strictly with all United States
import and export regulations (and any similar regulations in foreign countries)
and shall obtain all required licenses, approvals and/or other clearances to
export, re-export or import, as applicable, the Software, Documentation, Product
or Localized Product or any portion or element of any of the foregoing, and any
associated technical data, including, but not limited to, where a Software,
Documentation, Product or Localized Product or any portion or element of any of
the foregoing is installed on computer system.
(j) Certain software, or portions thereof, included in the Software are
distributed under the GNU General Public License ("GPL"), other similar open
source license agreements and other third party agreements which contain terms
that expand (or restrict) Distributor's and/or third parties' rights to certain
portions of the Software. The GPL and other similar open source license
agreements permit Distributor and/or third parties to copy, modify, redistribute
and have access to the source code of certain
4
<PAGE>
portions of the Software. The GPL, other similar open source license agreements,
other third party agreements, on-line documentation, source code, and other
information about all such software programs are available at the website
http://www.lindows.com/licenses. To the extent the GPL, other similar open
source license agreements or other third party agreements require Supplier to
provide rights to the applicable portions of the Software that are broader than
the rights granted elsewhere in this Agreement, then the GPL and/or other
similar open source license agreements shall take precedence over the rights and
restrictions set forth in this Agreement. Nothing in this Section 2(j) shall
permit Distributor or any third party to use the Lindows.com Branding Features
in connection with exercising the rights granted under the GPL, other similar
open source license agreements or other third party agreements.
3. OBLIGATIONS OF DISTRIBUTOR:
(a) Diligence. Distributor shall use commercially reasonable efforts to
promote the marketing and distribution of the Product to realize the maximum
sales potential for the Product in the Territory. Except as expressly set forth
herein, Distributor shall be solely responsible for all costs and expenses
related to the advertising, marketing, promotion, and distribution of the
Product and for performing its obligations hereunder.
(b) Repackaging. Any retail repackaging of the Product must be approved by
Supplier before the distribution of the Product in the Territory, provided,
however, that such approval shall not be unreasonably withheld.
(c) Translation; Localization. Distributor shall translate or localize the
Product into the Japanese language as provided in Section 2(d), provided,
however, that Supplier retain and shall have all ownership rights in and to the
Software, Documentation, Product, and Localized Product. Distributor understands
and agrees that Supplier shall have the right, at its sole and absolute
discretion, to sell and distribute the Localized Product to end users or OEM
customers outside of the Territory. Distributor shall provide a copy of any and
all publicly released versions of the Localized Product ten (10) days prior to
the release of the Localized Product.
(d) Product Support.
(i) Distributor shall provide reasonable technical support to
Customers, including, without limitation: (a) maintaining trained and competent
technical and engineering support personnel for the Localized Product who are
sufficiently knowledgeable with respect to the Localized Product to answer
Customer questions regarding the use and operation of the Product, (b)
responding promptly to requests for technical support from Customers, and (c)
providing technical support services to address and resolve Customers' support
requests with respect to the Localized Product.
(ii) Distributor shall ensure that all Customer questions regarding
the use or operation of the Localized Product are initially addressed to and
answered by Distributor. Unless otherwise agreed in writing by Supplier,
Distributor shall not
5
<PAGE>
represent to any third party that Supplier is available to answer questions from
any Customer directly.
(e) End User License. Prior to providing any Customer with any Software,
Distributor shall ensure that each Customer has read and agreed to the terms and
conditions of, and validly executed, the End User License Agreement, which shall
be contained in each software unit. As set forth more fully in Section 2(i),
Distributor shall not conduct, support, or permit, and shall not authorize any
third party to conduct, support, or permit, the copying, modification,
alteration, reverse engineering, disassembly or decompiling of the Product.
4. OBLIGATIONS OF SUPPLIER:
(a) Marketing Support. Supplier shall provide Distributor with reasonable
marketing support, including providing reasonable quantities of Supplier's
advertising and promotional materials, pricing information and technical data
related to the Product. Supplier may also from time to time provide, at
Supplier's sole discretion, monetary support for certain marketing and
promotional activities involving the Product, such as exhibitions, conventions,
trade shows, and advertisements.
(b) Japanese Language CNR Warehouse Aisle. Supplier shall maintain an
aisle within the CNR Warehouse containing references to software applications
which may be of interest to Japanese-speaking end users, including, maintaining
bandwidth and infrastructure necessary to support such aisle. Supplier shall
exercise its sole and absolute discretion as to which software applications to
place within such Japanese language aisle.
5. EXCLUSIVE LICENSING FEE: In consideration of Supplier's appointment of
Distributor as its exclusive distributor in the Territory pursuant to Section 2
above, Distributor shall pay Supplier a fully earned, nonrefundable, exclusive
licensing fee of *** (the "Exclusive Licensing Fee"). The Exclusive Licensing
Fee shall be paid in four (4) payments according to the following schedule:
PAYMENT NO. DATE AMOUNT
----------- ---- ------
1 *** ***
2 *** ***
3 *** ***
4 *** ***
All payments by Distributor to Supplier under this Section 5 shall
be in U.S. Dollars via certified check or electronic wire transfer. In the event
that Distributor fails to make payment of the Exclusive Licensing Fee according
to the schedule above, Supplier shall notify Distributor that Distributor is in
breach of this Section 5 pursuant to the Notice provision in Section 15(l)
below, and Distributor shall have thirty (30) days from the date Distributor
receives such notice to cure such breach, and Supplier shall charge Distributor
a one percent (1%) late fee for any such amount due to Supplier (the
6
<PAGE>
"Late Fee"). In addition to the Late Fee, the past due amount shall accrue
interest at eighteen percent (18%) per annum. If, after thirty (30) days from
the date Distributor receives notice of such breach, Distributor has not paid
Supplier the amounts due, plus the Late Fee, with interest, Supplier shall, at
its sole and absolute discretion, elect to terminate this Agreement, upon which
the Exclusive Licensing Fee, in its entirety, plus the Late Fee, with interest,
shall immediately become due and payable to Supplier, and Distributor shall no
longer be entitled to any of the rights granted in Section 2 above.
6. PRICE/PAYMENT:
(a) Per Unit License Fee. Pursuant to Section 2(a) above, for each CD-ROM
disk copied from the Gold Master, and for each Service purchased from Supplier,
Distributor shall pay a per-unit licensing fee to Supplier (the "Per Unit
License Fee"). During the Licensed Term (as defined in Section 9 below),
Distributor shall pay Supplier the Per Unit License Fee according to the
following schedule:
PRODUCT PRICE
------- -----
LindowsOS (Retail Version) ***
LindowsOS (OEM Version) ***
LindowsOffice with StarSuite ***
LindowsLive (CD) ***
Lindows Laptop Edition ***
SERVICE PRICE MINIMUM UNITS PURCHASED
------- ----- -----------------------
LindowsPlus Membership *** ***
VirusSafe *** ***
Distributor shall purchase the number of minimum units of services
above, and thereafter, shall be able to purchase any number of units without a
minimum unit requirement. All payments by Distributor to Supplier under this
Section 6(a) shall be made in U.S. Dollars via certified check or electronic
wire transfer. Distributor shall provide Supplier, on a monthly basis, sales,
shipment, inventory, and other written or electronic reports relating to
Distributor's activities under this Agreement during the prior month. All
payments made by Distributor to Supplier shall be made within thirty (30) days
from the date of each monthly report.
(b) Expiration of the Licensed Term. Distributor understands and agrees
that the Per Unit License Fee set forth in Section 6(a) above shall only be
valid during the Licensed Term of this Agreement. Distributor further
understands and agrees that all Product, or Localized Product, copied by
Distributor pursuant to the terms of this Agreement shall be shipped from
Distributor's manufacturing facility by the end of the Licensed Term.
Distributor shall have no right to ship from Distributor's manufacturing
facility, any Product, or Localized Product, copied pursuant to the terms of
this
7
<PAGE>
Agreement, after the expiration of the Licensed Term. Any Product, or Localized
Product, copied pursuant to the terms of this Agreement, which remains unsold by
Distributor upon expiration of the Licensed Term, if any, shall be destroyed by
Distributor, at Distributor's expense, and Distributor shall provide Supplier
with a record of all destroyed Product or Localized Product. Any Services
purchased pursuant to the terms of this Agreement, which remain unsold by
Distributor upon expiration of the Licensed Term, if any, shall be sold within
ninety (90) days from the end of the Licensed Term.
(c) Updates. In the event Supplier makes available to the public, any
Updates for the Products listed in Section 6(a), Supplier shall give such
Updates to Distributor, free of charge, with the exception that no Updates shall
be given to Distributor after the expiration of the Licensed Term. Distributor
understands and agrees that Supplier shall not give any Updates for any of the
Products after the expiration of the Licensed Term. Distributor shall have the
right to distribute such Updates, pursuant to the license granted in Section 2
of this Agreement.
(d) Taxes. The prices set forth in Section 6(a) above do not include any
Japanese taxes, including franchise, sales and use taxes, if any. Distributor
shall be solely responsible for payment of any and all such taxes or
obligations, including any fines, penalties, or interest relating thereto.
Notwithstanding the foregoing, any sum required under applicable tax laws to be
withheld by Distributor for account of Supplier from payments due to Supplier,
shall be withheld and shall be promptly paid by Distributor to the appropriate
tax authorities. Distributor shall furnish Supplier official tax receipts or
other appropriate evidence issued by tax authorities sufficient to enable
Supplier to file a claim for credit in respect of any sum so withheld against
its home country's income taxes.
(e) Product Identification Numbers. For all Services that Distributor
purchases during the Licensed Term pursuant to Section 6(a) above, Supplier
shall provide Distributor with the product identification numbers for the
corresponding Services within ten (10) days of receipt of Distributor's payment
for such Services.
(f) Books and Records; Audit. Both parties shall maintain complete books,
records and accounts relevant to computation and accounting for amounts payable
under this Agreement. Each party agrees to allow an independent certified public
accountant the right to audit and examine such books, records and accounts
during normal business hours no more than once per year upon ten (10) days
notice at such examining party's expense, to verify the accuracy of the reports
and payments made under this Section 6. In the event any such audit reveals that
a party has knowingly breached a material obligation hereunder, then, in
addition to such other remedies as such examining party may have, the audited
party shall pay or reimburse to the examining party the cost of such audit.
7. REPLACEMENT OF THE PREVIOUS AGREEMENT:
8
<PAGE>
(a) Distributor understands and agrees that the Previous Agreement shall
terminate on the Effective Date of this Agreement. Within ten (10) days of the
Effective Date of this Agreement, Distributor shall provide Supplier with a full
accounting of all Product in Distributor's inventory as of the Effective Date.
Any Product remaining in Distributor's inventory as of the Effective Date,
shall, at no charge to Distributor, become subject to the terms and conditions
of this Agreement. Any new Product copied by Distributor after the Effective
Date, and during the Licensed Term of this Agreement, shall be copied at the Per
Unit License Fee set forth in Section 6(a) above.
(b) Distributor understands and agrees that this Agreement shall replace
and supersede the Previous Agreement and all provisions thereof, and all other
agreements between the parties, written or oral. Distributor further understands
and agrees that the terms and conditions of this Agreement shall prevail in the
event of any discrepancy or conflict between this Agreement and the Previous
Agreement, unless otherwise agreed to in a document signed by each of the
parties hereto.
8. LIMITED WARRANTY:
(a) Limited Warranty. Subject to the provisions of this Section 8,
Supplier warrants that for a period of sixty (60) days from the date Distributor
receives any Gold Master ("Warranty Period"), the Software will conform to the
specifications expressly set forth in the Documentation provided by Supplier. In
the event that the Software fails to conform to such specifications during the
Warranty Period, Supplier shall use commercially reasonable efforts to repair
and correct such errors so that the Software conforms to such specifications.
(b) Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8(a)
ABOVE, SUPPLIER MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED,
OR OTHERWISE, AND SUPPLIER SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
NOTWITHSTANDING THE FOREGOING, SUPPLIER DOES NOT EXCLUDE LIABILITY TO THE EXTENT
THAT SUCH LIABILITY MAY NOT BE EXCLUDED OR LIMITED BY LAW.
(c) Customer Claims. Distributor shall ensure that all Customer claims for
warranty, repair, or replacement are addressed to Distributor and not to
Supplier.
9. TERM AND TERMINATION:
(a) Licensed Term. This Agreement shall commence upon the Effective Date
and shall continue in full force and effect until August 29, 2005 ("Licensed
Term"), unless terminated earlier in accordance with the provisions of this
Agreement.
(b) Breach. If a party is in material breach of this Agreement and has
failed to cure such material breach within thirty (30) days after receiving
written notice from the
9
<PAGE>
other party of such material breach, the party not in breach may terminate this
Agreement. Without limiting the foregoing, either party may terminate this
Agreement effective upon written notice to the other party stating such party's
intention to terminate, in the event the other party:
(i) ceases to function as a going concern or to conduct operations
in the normal course of business;
(ii) has a petition filed by or against it under any bankruptcy or
insolvency law which petition has not been dismissed or set aside within sixty
(60) days of its filing; or
(iii) fails to perform any of its obligations under this Agreement
so as to be in default hereunder and fails to cure such default within thirty
(30) days after receiving written notice of such default from the other party.
(c) Customer Support. Distributor may continue to use the Product after
termination of this Agreement to provide customer support services as set forth
in Section 3(d) above, provided, however, that Distributor is not in breach or
default of payment, pursuant to Sections 5 and 6(a) above.
(d) No Liability for Termination. Except as expressly required by law, in
the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of Supplier or Distributor. Termination shall not,
however, relieve either party of obligations incurred prior to termination.
(e) Survival. The following provisions shall survive expiration or any
termination of this Agreement: Sections 8, 9(c)-(f), 10, 11, 13, 15, and the
last sentence in Section 12(b).
(f) Return of Materials. All Software, Documentation, Product, trademarks,
marks, trade names, patents, copyrights, designs, drawings, formulas or other
data, photographs, samples, literature, and sales and promotional aids of every
kind shall remain the property of Supplier. Within thirty (30) days after the
effective date of termination of this Agreement, Distributor shall at Supplier's
option, destroy all tangible items bearing, containing, or contained in, any of
the foregoing, in its possession or control and provide written certification of
such destruction, or prepare such tangible items for shipment to Supplier or
Supplier's designee, as Supplier may direct, at Supplier's expense. Distributor
shall not make or retain any copies of any Confidential Information (as defined
in Section 10 below), which may have been entrusted to it.
10. CONFIDENTIALITY AND PROPRIETARY RIGHTS:
10
<PAGE>
(a) Confidential Information. The term "Confidential Information" shall
mean any information disclosed by one party to the other party pursuant to this
Agreement or either party's activities hereunder, including, without limitation,
technical data, product design and development, sales information, quantity and
kind of products licensed, prices and methods of pricing, marketing techniques
and plans, product returns, unannounced products, product and process
information, and any other information which, if disclosed to others, might be
competitively detrimental to either party.
(b) Confidentiality. Each party shall treat as confidential all
Confidential Information of the other party, shall not use such Confidential
Information except to exercise its rights and perform its obligations under this
Agreement herein, and shall not disclose such Confidential Information to any
third party, except as expressly authorized in Section 10(c) below. Without
limiting the foregoing, each of the parties shall use at least the same degree
of care it uses to prevent the disclosure of its own Confidential Information of
like importance, to prevent the disclosure of Confidential Information of the
other party. Each party shall promptly notify the other party of any actual or
suspected misuse or unauthorized disclosure of the other party's Confidential
Information.
(c) Exceptions. Confidential Information excludes information that: (i)
was in the public domain at the time it was disclosed or has become in the
public domain through no fault of the receiving party; (ii) was known to the
receiving party, without restriction, at the time of disclosure, as demonstrated
by files in existence at the time of disclosure; (iii) is disclosed with the
prior written approval of the disclosing party; (iv) was independently developed
by the receiving party without any use of the Confidential Information; (v)
becomes known to the receiving party, without restriction, from a source other
than the disclosing party, without breach of this Agreement, by the receiving
party; or (vi) is disclosed generally to third parties by the disclosing party
without restrictions similar to those contained in this Agreement. The receiving
party may disclose the other party's Confidential Information to the extent such
disclosure is required by order or requirement of a court, administrative
agency, or other governmental body.
(d) Proprietary Rights. Distributor agrees that Supplier retains all of
its right, title and interest in and to all patent rights, trademarks, trade
names inventions, copyrights, know-how and trade secrets relating to the
Product, including modifications, translations, and/or localizations of the
Product performed by Distributor, or the product lines that include the Product,
and the design, manufacture, operation or service of the Product. To the extent
that the Product contains or incorporates intellectual property of parties other
than Supplier, Distributor agrees to respect such third party rights and abide
by any terms and conditions contingent upon grant and use of such rights, and
that such third parties retain any such rights, if applicable. The use by
Distributor of any of these property rights is authorized only for the purposes
herein set forth and upon termination of this Agreement for any reason such
authorization will cease, subject to Section 9(d). Distributor shall not (and
shall require that its Customers do not) remove, alter, cover or obfuscate any
copyright notices or other proprietary rights notices placed or embedded by
11
<PAGE>
Supplier on or in any Product. Distributor hereby irrevocably assigns and agrees
to assign to Supplier, without additional consideration, all right, title and
interest in and to the Localized Product, whether currently existing or created
or developed later, including, without limitation, all copyrights, trademarks,
trade secrets, patents, industrial rights and all other intellectual property
and proprietary rights related thereto, whether existing now or in the future,
effective immediately upon the inception, conception, creation or development
thereof. Distributor shall (a) disclose promptly to Supplier the Localized
Product and any new version thereof, and (b) whether during or after the term of
this Agreement, execute such written instruments and do such other acts as may
be necessary in the opinion of Supplier to obtain a patent, register a copyright
or otherwise evidence or enforce Supplier's rights in and to such Localized
Product (and Distributor hereby irrevocably appoints Supplier and any of its
officers as its attorney in fact to undertake such acts in its name). To the
extent, if any, that Distributor retains any right, title or interest in or to
the Localized Product, Distributor hereby grants to the Supplier a perpetual,
irrevocable, fully paid-up, transferable, sublicensable, worldwide right and
license (a) to use, reproduce, distribute, display and perform (whether publicly
or otherwise), prepare derivative works of and otherwise modify, make, sell,
offer to sell, import and otherwise use and exploit (and have others exercise
such rights on behalf of Supplier) all or any portion of such Localized Product,
in any form or media (now known or later developed); (b) to modify all or any
portion of such Localized Product, including, without limitation, the making of
additions to or deletions from such Localized Product, regardless of the medium
(now or hereafter known) into which such Localized Product may be modified and
regardless of the effect of such modifications on the integrity of such
Localized Product; and (c) to identify Distributor, or not to identify
Distributor, as one or more authors of or contributors to such Localized Product
or any portion thereof, whether or not such Localized Product or any portion
thereof have been modified. Distributor further waives any "moral" rights or
other rights with respect to attribution of authorship or integrity of such
Localized Product Distributor may have under any applicable law, whether under
copyright, trademark, unfair competition, defamation, right of privacy,
contract, tort or other legal theory.
11. PATENT/COPYRIGHT/TRADEMARK WARRANTY AND INDEMNIFICATION:
(a) Indemnity. Provided Distributor adheres to the Branding Guidelines set
forth by Supplier, Supplier represents and warrants that the Product or any part
thereof, does not violate or infringe any patent, copyright, trademark, trade
secret or other proprietary right of any third party. Supplier agrees, at its
own expense, to defend any third party claim, suit or proceeding (collectively,
"Action") brought against Distributor alleging the Product infringes any patent,
copyright, trademark, trade secret or other proprietary right of Supplier in
existence as of the Effective Date, subject to the limitations hereinafter set
forth. Supplier agrees to pay, subject to the limitations hereinafter set forth,
any final judgment entered against Distributor on such issue in any such Action.
Distributor shall notify Supplier promptly in writing of such Action filed
against Distributor and shall have the right, but not the obligation, to
participate in the defense of any such suit or proceeding at Distributor's
expense. Distributor will provide
12
<PAGE>
the Supplier with proper and full information and its reasonable assistance in
the defense of any claim, suit or proceeding, at Supplier's expense. If it is
adjudicatively determined that the Product, or any part thereof, infringes any
patent, copyright or trademark, or if the sale or use of the Product, or any
part thereof, is, as a result, enjoined, or in the event of any pending or
threatened claim or infringement, then Supplier may, at its election, option,
and expense: (i) procure for Distributor the right under such patent, copyright
or trademark to sell or use, as appropriate, the Product or such part thereof;
(ii) modify the Product or part thereof; or (iii) cease distribution of the
Product, or part thereof, and refund any payments including (x) any minimum
product or services purchases under Section 6 paid by Distributor for such
Product/Service and (y) a pro rata portion of any paid installment of the
exclusive licensing fees that became due under the schedule set forth in Section
5 within 90 days from the date of such election/option to cease distribution of
the Product (for example if such election is made 30 days from the date an
installment became due, then Supplier shall refund two-thirds of such
installment), and Distributor's obligations to pay all remaining exclusive
licensing fee installments shall be terminated.
(b) Modifications to Branding Guidelines. Supplier reserves the right to
modify the Branding Guidelines from time to time, and shall give Distributor
notice of any such modifications. Within thirty (30) days of receipt of notice
of any modifications to the Branding Guidelines, Distributor shall act to assure
that all Product, Product marketing materials or other promotional matter
complies with the Branding Guidelines. If at any time Distributor fails to
follow the Branding Guidelines, Supplier shall be relieved of any obligation set
forth in Section 10 relating to or resulting from such failure.
12. USE OF TRADEMARKS/TRADE NAMES:
(a) Trademarks. During the Licensed Term of this Agreement, Distributor
shall have the right to indicate to the public that it is an authorized
distributor of Supplier's Product and to advertise such Product under the
trademarks, marks, and trade names of Supplier and in the promotion and
distribution of the Product; provided, however, that upon thirty (30) days prior
written notice to Distributor, Supplier may substitute alternative marks for any
or all of such Supplier's trademarks used by Distributor. All representations of
Supplier's trademarks that Distributor intends to use shall first be submitted
to Supplier for approval (which shall not be unreasonably withheld) of design,
color and other details or shall be exact copies of those used by Supplier. In
addition, Distributor shall fully comply with all reasonable guidelines, if any,
communicated by Supplier concerning the use of Supplier's trademarks.
(b) Use. Distributor shall not alter or remove any of Supplier's
trademarks affixed to the Product by Supplier. Except as set forth in this
Section 12, nothing contained in this Agreement shall grant or shall be deemed
to grant to Distributor any right, title or interest in or to Supplier's
trademarks. All uses of Supplier's trademarks shall inure solely to the benefit
of Supplier and Distributor shall obtain no rights with respect to any of
Supplier's trademarks, other than the right to distribute Product as set forth
herein, and Distributor irrevocably assigns to Supplier all such right, title
and
13
<PAGE>
interest, if any, in any of Supplier's trademarks. At no time during or after
the term of this Agreement shall Distributor challenge or assist others to
challenge Supplier's trademarks (except to the extent expressly prohibited by
applicable law) or the registration thereof or attempt to register any
trademarks, marks or trade names confusingly similar to those of Supplier. Upon
termination of this Agreement, Distributor shall immediately cease to use all of
Supplier's trademarks.
13. LIMITATION OF LIABILITY: EXCEPT FOR DISTRIBUTOR'S OBLIGATIONS UNDER SECTION
15(C), IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF
PROCUREMENT OF SUBSTITUTE GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER
BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE. THE FOREGOING
LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE ESSENTIAL PURPOSE OF
ANY LIMITED REMEDY STATED HEREIN. NEITHER PARTY'S LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL EXCEED THE AGGREGATE AMOUNTS PAID BY
DISTRIBUTOR TO SUPPLIER HEREUNDER. NOTWITHSTANDING THE FOREGOING, THIS SECTION
13 SHALL NOT BE APPLICABLE WITH REGARD TO ANY BREACH OR LIABILITY UNDER SECTIONS
10 AND 11.
14. COMPLIANCE WITH LAWS:
(a) Export Control. Distributor understands and acknowledges that Supplier
is subject to regulation by agencies of the United States Government, including,
but not limited to, the U.S. Department of Commerce, which prohibit export or
diversion of certain products and technology to certain countries. Any and all
obligations of Supplier to provide the Product, as well as any other technical
information or assistance shall be subject in all respects to such United States
laws and regulations as shall from time to time govern the license and delivery
of technology and products abroad by persons subject to the jurisdiction of the
United States, including the Export Administration Act of 1979, as amended, any
successor litigation, and the Export Administration Regulations issued by the
Department of Commerce, Bureau of Export Administration. Distributor agrees to
cooperate with Supplier including, without limitation, providing required
documentation, in order to obtain export licenses or exemptions therefrom.
Distributor warrants that it shall comply with the Export Administration
Regulations and other United States laws and regulations governing exports in
effect from time to time. Distributor further agrees not to resell Product to
any organization, public or private, which engages in the research or production
of military devices, armaments, or any instrument of warfare, including
biological, chemical and nuclear warfare.
(b) Governmental Approvals. Distributor represents and warrants that it
has obtained all required approvals of the government within the Territory in
connection with this Agreement and that the provisions of this Agreement and the
rights and obligations
14
<PAGE>
of the parties hereunder, are enforceable under the laws within the Territory.
Supplier represents and warrants that it has obtained all required approvals of
the United States government in connection with this Agreement and that the
provisions of this Agreement and the rights and obligations of the parties
hereunder, are enforceable under the laws of the United States of America.
15. MISCELLANEOUS PROVISIONS:
(a) Independent Contractors. The relationship of Supplier and Distributor
established by this Agreement is that of independent contractors, and neither
party is an employee, agent, partner or joint venturer of the other.
(b) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that neither party shall assign any of its rights,
obligations, or privileges (by operation of law or otherwise) hereunder without
the prior written consent of the other party, which consent shall not be
withheld unreasonably.
(c) Indemnity. Except for warranty claims for which Supplier is liable
under Section 8 and infringement claims covered by Section 11, Distributor
agrees to indemnify and hold Supplier harmless against any cost, loss,
liability, or expense (including attorneys' fees) arising out of third party
claims against Supplier relating to Distributor's use and distribution of the
Product.
(d) No Implied Waivers. The failure of either party at any time to require
performance by the other of any provision hereof shall not affect the right of
such party to require performance at any time thereafter, nor shall the waiver
of either party of a breach of any provision hereof be taken or held to be a
waiver of a provision itself.
(e) Severability. If any provision of this Agreement is held to be invalid
by a court of competent jurisdiction, then the remaining provisions shall
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.
(f) Force Majeure. Except for payment of monies, neither party shall be
liable for failure to fulfill its obligations under this Agreement or for delays
in delivery due to causes beyond its reasonable control, including, but not
limited to, acts of God, acts of terror, man-made or natural disasters,
earthquakes, fire, riots, flood, material shortages, strikes, delays in
transportation or inability to obtain labor or materials through its regular
sources. The time for performance of any such obligation shall be extended for
the time period lost by reason of the delay.
(g) Conflicting Terms. The parties agree that the terms and conditions of
this Agreement shall prevail, notwithstanding contrary or additional terms, in
any purchase
15
<PAGE>
order, sales acknowledgement, confirmation or any other document issued by
either party effecting the purchase and/or sale of Product.
(h) Authority. The parties executing this Agreement on behalf of Supplier
and Distributor represent and warrant that they have the authority from their
respective governing bodies to enter into this Agreement and to bind their
respective companies to all the terms and conditions of this Agreement.
(i) English Language. English shall be used as the authoritative text of
this Agreement, regardless of the existence of counterparts translated into
another language, and all communications, arbitrations, and other adjudications
hereunder shall be made and conducted in English.
(j) Recitals. The parties agree that each and every recital of this
Agreement shall be a covenant and agreement as well as a recital of this
Agreement.
(k) Headings. Headings of Sections herein are inserted for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
(l) Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (i) by hand, (ii) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
provided immediately below, or to such other address as a party may designate by
written notice in accordance with this Section 15(i), (iii) by overnight courier
with proof of delivery, (iv) by email to an officer of such party, with
confirming return email, or (v) by fax with confirming letter mailed under the
conditions described in (ii) above.
"Supplier"
Lindows, Inc.
9333 Genessee Ave., Suite 300
San Diego, CA 92121
FAX: (858) 587-8095
"Distributor"
livedoor Co., Ltd.
Roppongi Hills 387, 6-10-1 Roppongi
Hirato-ku, Tokyo, 106-6138, Japan
FAX: 81-3-51213-2237
(m) Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements relating thereto, written or oral, between the parties. Amendments to
this Agreement must be in writing and signed by the duly authorized officers of
the parties. This Agreement may be executed in counterparts and delivered by
facsimile, all of which shall together be effective as a single original.
16
<PAGE>
(n) Governing Law. This Agreement is to be construed in accordance with
and governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. This Agreement shall not be
governed by the U.N. Convention on Contracts for the International Sale of
Goods, the application of which is expressly excluded. Nothing in this Agreement
is intended or will be construed to give any person (other than Licensor and
Licensee) any legal or equitable right, remedy or claim under this Agreement or
any provision hereof.
(o) Attorney's Fees. In the event a dispute arises regarding this
Agreement, the prevailing party shall be entitled to its reasonable attorney's
fees and expenses incurred in addition to any other relief to which it is
entitled.
(p) Further Assurances. Both parties agree to execute such additional
documents and perform such acts as are reasonably necessary to effectuate the
intent of this Agreement.
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
"Supplier" "Distributor"
LINDOWS, INC. LIVEDOOR CO., LTD.
By: /s/ Kevin Carmony By: /s/ Horie Takafumi
----------------------------- -----------------------------------
Name: Kevin Carmony Name: Horie Takafumi
----------------------------- -----------------------------------
Title: Pres./COO Title: President & CEO
----------------------------- -----------------------------------
18
<PAGE>
EXHIBIT "A"
"PRODUCT"
SOFTWARE - (IN OBJECT CODE FORM ONLY)
LindowsOS (OEM Version)
LindowsOS (Retail Version)
LindowsOffice with StarSuite
LindowsLive (CD)
Lindows Laptop Edition
SERVICES
LindowsPlus Membership
VirusSafe
DOCUMENTATION
19
<PAGE>
EXHIBIT "B"
END USER LICENSE AGREEMENT
LindowsOS End User License Agreement
BETWEEN LINDOWS, INC. ("LINDOWS") AND EITHER (1) A FAMILY END-USER ("FAMILY") --
AN INDIVIDUAL END-USER AGREEING TO A FAMILY EDITION LICENSE FOR PERSONAL USE AND
USE BY MEMBERS OF SUCH INDIVIDUAL'S HOUSEHOLD OR (2) A BUSINESS END-USER
("BUSINESS") AGREEING TO A BUSINESS EDITION LICENSE FOR AN AGREED UPON NUMBER OF
SEATS OR NUMBER OF SIMULTANEOUS USERS, BUT NOT BOTH. THE FAMILY OR THE BUSINESS
("YOU" OR "YOUR"), AS APPROPRIATE, AGREES TO CAREFULLY READ THIS LICENSE
AGREEMENT (THIS "AGREEMENT") BEFORE INSTALLING OR USING THE LINDOWSOS SOFTWARE
PRODUCT (INCLUDING ALL ACCOMPANYING DOCUMENTATION, ENHANCEMENTS, UPGRADES AND
EXTENSIONS THERETO "LINDOWSOS"). INSTALLING OR OTHERWISE USING THIS PRODUCT
INDICATES YOUR ACKNOWLEDGMENT THAT YOU HAVE READ THIS AGREEMENT AND AGREE TO BE
BOUND BY AND COMPLY WITH ITS TERMS. IF YOU DO NOT AGREE TO THIS AGREEMENT,
PROMPTLY RETURN LINDOWSOS (WITHOUT INSTALLING IT) TO PLACE OF PURCHASE AND ANY
MONEY YOU HAVE PAID FOR LINDOWSOS WILL BE RETURNED.
SELECTING THE "I ACCEPT THIS AGREEMENT" OPTION FURTHER CONFIRMS YOUR ACCEPTANCE
OF ALL TERMS CONTAINED IN THIS AGREEMENT.
1. LICENSE.
1.1 License.
a. Family License: If You are a Family or Individual, You agree to the following
terms of this Section 1.1.a: LindowsOS is a modular operating system made up of
individual software components (each individual software component and all
accompanying documentation, enhancements, upgrades and extensions thereto are
referred to herein as "Software Program(s)") that were created either by Lindows
or various individuals and entities ("Third Parties"). Subject to the terms and
conditions of this Agreement, Lindows grants You a non-exclusive license to use
the object code form of LindowsOS for Your personal use in accordance with the
accompanying documentation. You may download and use LindowsOS on multiple
computers owned, leased or rented by You; provided, however, You and members of
Your Household (a "Household" consists of those individuals that currently
reside with You) are the only individuals with the right to use Your licensed
copy(ies) of LindowsOS. For example, if You have a desktop computer at home and
a laptop computer which You travel with, You may download a copy of LindowsOS on
both machines for the personal use of members of Your Household and You. You
agree that You are responsible for the members of Your Household's compliance
with the terms of this Agreement as though they were You and had agreed to all
terms and conditions herein. Except as otherwise expressly set forth herein, You
may not (and shall not allow any member of Your Household or any other Third
Party to) (i) remove any product identification or other notices; (ii) copy
LindowsOS (other than for back-up purposes, for Your personal use on Your
multiple machines as set forth in this Section 1.1.a, or for archival purposes);
(iii) provide, lease, lend, use for timesharing or service bureau purposes or
otherwise use or allow others to use LindowsOS to or for the benefit of Third
Parties, or (iv) modify LindowsOS or incorporate LindowsOS into or with other
software, except as may be provided for in this agreement.
b. Business License: If You are a Business, You agree to the following terms of
this Section 1.1.b: LindowsOS is a modular operating system made up of
individual software components (each individual software component and all
accompanying documentation, enhancements, upgrades and extensions thereto are
referred to herein as "Software Program(s)") that were created either by Lindows
or various individuals and entities ("Third Parties"). Subject to the terms and
conditions of this Agreement, Lindows grants You a non-exclusive license for
Your authorized users to use the object code form of LindowsOS for Your internal
business purposes on Business owned, rented or leased computers in accordance
with the accompanying documentation for: (1) solely up to the number of
Simultaneous Users purchased by You as set forth at
www.lindows.com/businesslicense, regardless of the number of Business owned,
rented or leased computers that You download LindowsOS on or (2) solely up to
the number of Seats purchased by You as set forth at
www.lindows.com/businesslicense. "Simultaneous Users" refers to authorized users
that may use LindowsOS at the same time. A "Seat" is a single computer
processing unit or "CPU" (including computers with redundant processing
systems), whether LindowsOS is installed directly on that CPU or is served from
a centralized server. Except as otherwise expressly set forth herein, You and
Your authorized users may not (and shall not allow any Third Party or any of
Your authorized users to) (i) remove any product identification or other
notices; (ii) copy LindowsOS (other than for back-up purposes, for use on
multiple Seats as set forth in this Section 1.1.b, or for archival purposes);
(iii) provide, lease, lend, use for timesharing or service bureau purposes or
otherwise use or allow others to use LindowsOS to
20
<PAGE>
or for the benefit of Third Parties, or (iv) modify LindowsOS or incorporate
LindowsOS into or with other software, except as may be provided for in this
agreement. You shall keep a current record of the location of each copy of
LindowsOS You make.
1.2 Third Party Agreements. Many of the Software Programs included in LindowsOS
are distributed under the terms of agreements with Third Parties ("Third Party
Agreements") which may expand or limit Your rights to use certain Software
Programs as set forth in Section 1.1. Certain Software Programs may be licensed
(or sublicensed) to You under the GNU General Public License and other similar
open source license agreements ("OSLAs") which, among other rights, permit You
to copy, modify and redistribute certain Software Programs, or portions thereof,
and have access to the source code of certain Software Programs, or portions
thereof. In addition, certain Software Programs, or portions thereof, may be
licensed (or sublicensed) to You under terms stricter than those set forth in
Section 1.1. Please review visit www.lindows.com/licensing for the on-line
documentation that accompanies certain Software Programs, or portions thereof,
for the applicable Third Party Agreements. To the extent any Third Party
Agreements require that Lindows provide rights to use, copy or modify a Software
Program that are broader than the rights granted in Section 1.1, then such
rights shall take precedence over the rights and restrictions granted in this
Agreement solely for such Software Programs.
1.3 Violation of Licensing Terms. Any violation by You of the applicable license
terms set forth in Section 1.1 or Section 1.2, as appropriate, shall immediately
terminate Your license to use LindowsOS. If You do not agree to comply with and
be bound by the terms of the applicable license agreement(s), do not install,
distribute or otherwise use LindowsOS.
2. PROPRIETARY RIGHTS.
All right, title and interest in LindowsOS, including source code,
documentation, appearance, structure and organization, are held by Lindows
and/or its licensors and are protected by copyright and other laws. You may not
copy or otherwise use LindowsOS, in whole or in part, except as expressly
permitted in this Agreement. Title to LindowsOS, or to any copy, modification or
merged portion of any of the Software Programs, shall at all times remain with
Lindows and/or its licensors, subject to the terms of the applicable Third Party
Agreement(s) to the Software Programs under consideration.
3. TRADEMARKS
"Lindows.com" and "LindowsOS" are registered trademarks of Lindows.com, Inc.,
All Rights Reserved. "Linux" is a registered trademark of Linus Torvalds. All
other trademarks are the property of their respective owners. While certain
Third Party Agreements described in Section 1.2 may allow You to copy, modify
and distribute certain Software Programs, they do not permit You to distribute
the Software Programs utilizing Lindows.com's trademarks.
4. LIMITED WARRANTY.
IF LINDOWSOS WAS DISTRIBUTED TO YOU BY LINDOWS OR A LINDOWS AUTHORIZED
DISTRIBUTOR ON CD-ROM OR OTHER TANGIBLE STORAGE MEDIA, LINDOWS WARRANTS THAT THE
STORAGE MEDIA IN THIS PRODUCT WILL BE FREE FROM DEFECT IN MATERIALS AND
WORKMANSHIP UNDER NORMAL USE FOR A PERIOD OF THIRTY (30) DAYS FROM THE DATE THAT
YOU ACQUIRE IT. IF SUCH A DEFECT OCCURS, RETURN THE MEDIA TO LINDOWS AT,
LINDOWS.COM, INC., 9333 GENESEE AVE., SAN DIEGO, CA 92121, AND LINDOWS WILL
REPLACE IT FREE OF CHARGE. THIS REMEDY IS YOUR EXCLUSIVE REMEDY FOR BREACH OF
THIS WARRANTY.
EXCEPT WHERE SPECIFICALLY STATED OTHERWISE IN THIS AGREEMENT, LINDOWSOS,
INCLUDING WITHOUT LIMITATION EACH SOFTWARE PROGRAM, IS PROVIDED TO YOU ON AN "AS
IS" BASIS, WITHOUT ANY OTHER WARRANTIES OR CONDITIONS AND LINDOWS EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR THOSE ARISING BY LAW, STATUTE, USAGE OF TRADE, COURSE OF DEALING OR
OTHERWISE. ANY WARRANTY OR REMEDY PROVIDED UNDER THIS AGREEMENT EXTENDS ONLY TO
THE PARTY WHO PURCHASES A LICENSE TO LINDOWSOS FROM LINDOWS OR A LINDOWS
AUTHORIZED DISTRIBUTOR.
Some jurisdictions do not allow the exclusion of implied warranties, so the
above exclusion may not apply to You. You may have other rights which vary from
jurisdiction to jurisdiction.
5. LIMITATION OF LIABILITY.
THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF LINDOWSOS IS ASSUMED BY
YOU. NEITHER LINDOWS NOR ITS APPOINTED DEALERS, SUPPLIERS OR LICENSEES SHALL
HAVE ANY LIABILITY TO YOU OR ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING, BUT NOT
LIMITED TO, LOSS OF REVENUE OR PROFIT, LOST OR DAMAGED DATA OR OTHER COMMERCIAL
OR ECONOMIC LOSS, EVEN IF LINDOWS OR SUCH DEALER, SUPPLIER OR LICENSEE HAS BEEN
21
<PAGE>
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR THEY ARE FORESEEABLE. OUR MAXIMUM
AGGREGATE LIABILITY TO YOU AND THAT OF OUR DEALERS AND SUPPLIERS FOR DIRECT
DAMAGES SHALL NOT EXCEED THE AMOUNT PAID BY YOU FOR LINDOWSOS. THE LIMITATIONS
IN THIS SECTION SHALL APPLY WHETHER OR NOT THE ALLEGED BREACH OR DEFAULT IS A
BREACH OF A FUNDAMENTAL CONDITION OR TERM OR A FUNDAMENTAL BREACH.
Some jurisdictions do not allow the limitation or exclusion of liability for
incidental or consequential damage, so the above limitation may not apply to
You.
6. DISTRIBUTION.
If You are permitted to redistribute any Software Programs under an appropriate
OSLA, it is Your responsibility to comply with all export laws, rules and
regulations in the jurisdictions where the Software Programs are exported from,
exported to, or re-exported from time to time.
7. TERM.
This Agreement is effective until terminated. You may terminate this license at
any time by destroying all copies of LindowsOS. The Agreement will terminate
automatically if You fail to comply with any term or condition of the Agreement.
The provisions of Sections 1.2 (regarding OSLAs that remain in force) and 2 - 8,
shall survive termination.
8. GENERAL.
This Agreement, together with the Third Party Agreements, is the entire
agreement regarding Your use of LindowsOS, superseding any other agreement or
discussions, oral or written, and may not be changed except by a signed
agreement. Except as set forth in the appropriate OSLA, You may not assign Your
rights or obligations under this Agreement without the prior consent of Lindows.
This Agreement shall be governed by and construed in accordance with the laws of
the State of California, 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 Convention, if otherwise
applicable. The sole jurisdiction and venue for actions related to the subject
matter hereof shall be the state and federal courts located in San Diego County.
In any action to enforce this Agreement, the prevailing party shall be entitled
to costs and attorneys' fees. If any provision of this Agreement is declared by
a Court of competent jurisdiction to be invalid, illegal, or unenforceable, such
a provision shall be severed from the Agreement and the other provisions shall
remain in full force and effect. At no time shall a failure or delay in
enforcing any provisions, exercising any option or requiring performance, be
construed to be a waiver.
22
<PAGE>
EXHIBIT "C"
LINDOWS BRANDING GUIDELINES
BRANDING FEATURES
To be provided on request.
TRADEMARK NOTICES
The Branding Features are trademarks and service marks of Lindows. The Branding
Features shall be accompanied by the superscript "TM" or "(R)" symbol, as
specified by Lindows, which must appear to the immediate right of the Branding
Features. The footnote "LindowsOS is the trademark of Lindows, Inc." or "Lindows
is the trademark of Lindows, Inc.", as applicable, shall accompany each use of
the Branding Features (or, if a Branding Feature is used multiple times in a
document, screen or packaging, such notice shall accompany the first prominent
use in such document, screen or packaging).
USING THE BRANDING FEATURES
Distributor may only use the Branding Features as an indication that the
Software is being offered to end users via distribution pursuant to this
Agreement. Distributor may not use the Branding Features in such a way as to
suggest that the Branding Features may also apply to any hardware or software
other than the Software. When referring to Lindows, Inc., Distributor shall use
the name "Lindows." When referring to the Software, Licensee shall use the
trademark "LindowsOS."
SIZING AND PLACEMENT REQUIREMENTS
The digitized, machine-readable file for the artwork of the Branding Features
shall be delivered as provided above in this Exhibit C. Distributor shall not
alter this file or the Branding Features in any way, including, without
limitation, changing the color of any of the logos or artwork, separating any
words in the Branding Features from the remainder of the Branding Features or
replacing words with any other words.
Distributor shall not combine the Branding Features with any other feature,
including, without limitation, other marks, words, graphics, photos, slogans,
numbers, design features or symbols.
The Branding Features shall not be larger or more prominent than the trademark,
logo or any Distributor trade name that appears on the same packaging,
documentation, advertising or other materials. The Branding Features shall not
be smaller or less prominent than any name, trademark or logo of any third party
that appears on the same packaging, documentation, advertising or other
materials.
23