RealMedia Architecture Partner Program Agreement with Digital Lava, Inc.
for Corporate Intranet Products and Internet Products
This Agreement is entered into as of April 1, 1998 (the "Effective Date") by and
between Real Networks, Inc., a Washington corporation with a principal place of
business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ CRN') and
Digital Lava, Inc., a Delaware corporation with an address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Partner").
WHEREAS, RN has developed and owns all right, title and interest in the
RealMedia Architecture ("RMA", as further defined below), an open platform for
development of streaming media applications and tools, which allows software
developers to build new applications and extend current applications to
inter-operate with a wide variety of datatypes;
WHEREAS, RN has established a licensing program (the "Partner Program") which
would allow a partner participating in the Partner Program to create, market and
sublicense for distribution in corporate intranets and the internet,
applications based on RMA, and to receive other benefits of participating in the
Partner Program; and
WHEREAS, Partner desires to participate in the Partner Program and to receive
the attendant rights and benefits;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 License Key" means the authorization code that is generated by the License
Key Tool and that enables RMA Server Software to stream RealMedia datatypes.
License Keys that generate User-Streams and enable features of a Partner Product
are licensed to a Partner's end-user customers
1.2 "License Key Tool" means the version of the License Key Tool that is
provided to Partner by RN which is specific and unique to the Partner Product.
The License Key Tool is used to generate unique License Keys for a Partner
Product.
1.3 "Licensed Software" means RMA Players, the RealMedia SDK, including
associated RealMedia Libraries, RMA Server Software, in Object Code and/or
Source Code form, as applicable, License Key Tools and License Keys, and related
User Documentation and specifications.
1.4 "New Release" means a new major release of the RMA Servers or the Partner
1
Products in which major new functionality has been added in addition to any
complement of bug fixes supplied, and which is designated as a change in the
digit to the left of the decimal point in the product version number [(x).x.x].
"Update" means a minor release, enhancement, revision, modification or upgrade
of the RMA Servers or Partner Products, designated as a change in the tenths
digit in the product version number [x.(x).x], or in the digit to the right of
the tenths digit in the product version number [x.x.(x)]. By way of
clarification, if either party markets a new and distinct product along with and
in addition to an existing program, then such new and distinct product shall be
treated as a New Release, not an Update.
1.5 "Object Code" means computer code assembled or compiled in magnetic binary
form on software media, which are readable and useable by machines, but not
generally readable by humans without reverse-engineering, reverse-compiling or
reverse-assembly.
1.6 "Partner Product(s)" means the products and applications developed by
Partner which are compatible with Licensed Software, as further described on
Exhibit A hereto. Partner Products shall include:
(a) "Partner Client Software," which means software that contains an RMA Player
as defined in Section 1.7(a), or that utilizes the RMA application programming
interfaces ("APIs");
(b) "Digital Lava Client Software" which means the products listed in Exhibit A
which incorporate the custom COM-component being built by RN under contract to
Partner;
(c) "Partner Tools," which means software tools that may import datatypes and
export datatypes using the RealMedia Libraries; and/or that are used to perform
RMA-related functions including, but not limited to, server administration,
plug-in file systems, server monitoring, and assembly; and
(d) "Partner Server Applications," which means software that interfaces with an
RMA Server and adds datatypes that can be streamed from an RMA Server.
1.7 "RealMedia Architecture" or "RMA' means the software platform developed by
RN that allows for the development of streaming media products and tools, and
which is designed specifically for use in the infrastructure of the internet and
corporate intranets. RMA includes the following components:
(a) "RMA Players," which are stand-alone applications that use an RMA Server or
any components of the RMA Player embedded in other applications of Partner that
play media files.
2
(b) "RealMedia Datatypes," which are datatypes that can be streamed using RMA
Server APIs and played using RMA Player APIs.
(c) "RealMedia Libraries," which are contained in the RealMedia SDK and are
Object Code implementations of various APIs.
(d) "RealMedia SDK" or "SDK," which contains the tools and information used by
software developers to create tools for use in producing streaming media and to
adapt or build applications that stream from RMA Servers and play in RMA
Players. The SDK contains an RMA Player, RMA Player APIs, Server APIs, RealMedia
Libraries, Sample Source Code and RealMedia Server Software.
(e) "RMA Server Software" or "RMA Server" in Object Code form, which streams
files over networks, and which has the capabilities set forth on Exhibit B
hereto.
(f) "Sample Source Code," which provides an example of how to develop an RMA
application.
1.8 "RN Products" means the RealAudio and RealVideo intranet and internet
products.
1.9 "Term" is defined in Section 6.1.
1.10 "Territory" means the world, except as otherwise agreed by the parties.
1.11 "User Documentation" means RN's user manuals, technical manuals, release
notes including advertisements for ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ Players, installation and
operation instructions, and other data and documentation describing the use of
RMA Servers and RMA Players normally supplied to RN's customers.
1.12 "User-Stream" means the stream of media-compatible data necessary to
deliver the media type associated with a Partner Product from an RMA Server to a
single end-user client computer. The number of User-Streams being delivered by a
given RMA Server is measured by counting the number of end-users simultaneously
served by User-Streams originating at that RMA Server.
2. GRANT OF LICENSES AND DISTRIBUTION RIGHTS.
2.1 License Grants to Partner.
(a) License to Use Real Media SDK to customize Partner Products for use with
Licensed Products.
3
Subject to the terms and conditions of this Agreement, RN grants to Partner a
non-exclusive, non-assignable license to use and install the RealMedia SDK,
whether in Object Code or Source Code form, for the sole purpose of developing
Partner Products that interoperate with Licensed Products. Partner shall use the
SDK on a single computer or on a computer network. Partner may download
associated online documentation for purposes of using the SDK, but may not make
further copies of the documentation.
(b) License to Distribute Certain Products to Corporate lntranet Customers Only.
(i) License to Distribute Partner Products. Subject to the terms and
conditions of this Agreement, and payment of the applicable License Fees set
forth in Section 5.1, RN grants Partner a non-exclusive, non-assignable license
to market, sublicense, promote and distribute, to end-user corporate customers
only, directly or through authorized distributors who have agreed to comply with
the terms and conditions of this Agreement ("Authorized Distributors"), the
version of Partner Products containing any Licensed Software. The license to any
such end-user corporate customer is limited to such customer's intranet purposes
only, and is subject to such end-user corporate customer signing a ▇▇▇▇ as
defined in Section 2.3 (b).
(ii) License to Use and Sublicense the Licensed Software. Subject to the
terms and conditions of this Agreement, and payment of the applicable License
Fees set forth in Section 5.1, RN also grants Partner a non-exclusive,
non-assignable license to market, sublicense, promote and distribute, to
end-user corporate customers only, directly or through Authorized Distributors,
pursuant to an executed ▇▇▇▇ as defined in Section 2.3(b), only Object Code
copies of the Licensed Software, and only in combination with Partner Products,
for such customers' intranet purposes only.
(iii) License to Use and Sublicense the RealAudio and/or RealVideo Intranet
Products. Subject to the terms and conditions of this Agreement, and payment of
the applicable License Fees set forth in Section 5.1, RN also grants Partner a
non-exclusive, non-assignable license to market, sublicense, promote, and
distribute the RealVideo intranet products, to end-user corporate customers
only, directly or through Authorized Distributors, for such customers' intranet
purposes only, and only in combination with the Partner Products.
(c) License to Distribute RealVideo and RealAudio Internet Products. Subject to
the terms and conditions of this Agreement, and payment of the applicable
License Fees set forth in Section 5.1, RN also grants to Partner a
non-exclusive, non-assignable license to market, sublicense, promote, and
distribute, to internet web site customers, directly or through Authorized
Distributors, and only in combination with the Partner Products, the RealAudio
and/or RealVideo internet products, without the RMA Player.
(d) License to Display an RMA Server. RN grants to Partner and its Authorized
Distributors the non-exclusive, royalty-free right to license and publicly
display an RMA Server with 10 streams for the purpose of: 1) internal
development and testing, 2) demonstration; and 3) marketing.
4
2.2 License Grant to RN. License to Use Partner Tools, Partner Client Software
and Partner Server Applications; License to Use and Distribute the Partner
Products. Partner hereby grants RN a non-exclusive, royalty-free license to use
and publicly display the Partner Tools, Partner Client Software, and Partner
Server Applications for internal testing, demonstration and marketing purposes.
2.3 Limitations. The grant of licenses, including Partner's right to sublicense
and distribute the Licensed Software and the RN Products as set forth above, are
subject to the following limitations:
(a) Except as provided in Section 2.1(b), the SDK may be used solely to develop
and test a Partner Product. It may not be used for any commercial,
non-commercial, educational or internal purpose, and may not be used in any way
that allows or causes the transmission of audio, video or other media files
across the Internet an intranet, or any computer network, unless the parties
otherwise agree.
(b) As a condition of receiving the sublicense from Partner to use and/or
distribute any of the Licensed Software and/or RN Products, Partner shall
require its Authorized Distributors and end-user customers to sign RN's standard
end-user License Agreement ("▇▇▇▇"), which is contained in RN's product
packaging. The license granted in such ▇▇▇▇ shall be between RN and Partner's
end-users and/or Authorized Distributors. Accordingly, Partner agrees that it
shall promptly provide to RN the names and addresses of all end-users and
Authorized Distributors to whom Partner distributes any Licensed Software or RN
Products, concurrently with the provision of monthly reports, as set forth in
Section 5.2.
(c) Except as expressly provided herein, Partner shall not directly or
indirectly, or allow third parties to, copy, modify, reproduce, display,
decompile, reverse engineer, disassemble, store, translate, sublicense, assign,
sell, lease or otherwise transfer or distribute any of the Licensed Software
(which includes the SDK and components of the Licensed Software) or RN Products,
or any of Partner's rights therein, in whole or in part, nor may Partner use any
of the Licensed Software or RN Products, to clone any client, server or other RN
product. Except as expressly provided herein, no license or right is hereby
granted, by implication or otherwise, with respect to the Licensed Software or
any other RN Products or any rights thereto.
(d) Nothing contained in this Agreement shall be deemed or construed to grant
Partner the exclusive right to develop, or have distributed by RN, Partner
Products for any particular category of datatypes.
(e) Partner's end-user license agreements for the Partner Products shall
prohibit further distribution of the RMA Libraries, any RMA files or other
components of RMA by Partner's end-users.
5
(f) Partner shall include a prominent and valid copyright notice, in the form
requested by RN, in RMA-Compatible Partner Products specifying that components
of such products are owned by and used under license from RN and its suppliers.
Partner shall not alter or remove any copyright or trademark notices contained
in any Licensed Software, RN Products, or User Documentation or use such
copyright or trademark notices in combination with any other copyright or
trademark notices. In addition, Partner shall prominently display RN's "RMA
logo" and the words "RMA Compatible" on the product packaging and all product
manuals and documentation, in accordance with any Trademark Usage Guidelines
provided by RN.
(g) Partner may only distribute Partner Products that have been designed,
developed, and tested to function with an RMA Server. In creating the Partner
Products, Partner shall ensure that such Partner Products will enable any
datatypes to be played in the RMA Player. To ensure that all components of the
Partner Products interoperate properly and are compatible with the RMA Server,
RN may elect to test the Partner Products (excluding 1.6b), or, at RN's option,
will have the Partner Products (excluding 1.6b) tested by a third party testing
lab at Partner's expense. RN shall provide development support to Partner to aid
in Partner's resolution of problems discovered in the testing process, as set
forth in Section 4.1.
(h) Partner agrees to promptly deliver to RN all releases, including beta
releases, of its Partner Products, for use by RN.
(i) Partner or its Authorized Distributors shall market, sublicense and
distribute Object Code copies only of the RMA Server Software or RMA Player
Software and User Documentation to end-user corporate customers for their
internal corporate intranet use only either as (i) bundled with a Partner
Product on the same media (such as CD-ROM or diskette), or (ii) in the same
finished packaging as the Partner Product (a "Bundle").
(j) Partner shall generate License Keys with an authorized, RN-provided License
Key Tool, and duplicate, market and distribute License Keys associated with
Partner Products to end-user customers.
(k) Partner will determine the price at which it or its Authorized Distributors
will license and distribute the Partner Products, RMA Server Software and
License Keys to end-user customers, independent of any License Fee payable by
Partner to RN.
(l) Partner may either: (i) download RMA Servers from a private RN download
site; or (ii) place an order with RN for physical pre-packaged copies of the RMA
Servers. RN will ship all physical product to Partner or Partner's authorized
designee, by shipment method specified by Partner. All orders are shipped F.O.B.
RN's designated fulfillment location. As a convenience, RN may prepay freight
charges, and such charges will be billed to Partner. All risk of loss or damage
in transit will be borne by Partner. Partner shall inspect the RMA Servers upon
receipt at the delivery location. Acceptance shall be deemed to occur unless
Partner provides RN with notice of nonacceptance within three (3) days of
receipt. A Partner may only reject an RMA Server for one of the following
reasons: (i) missing labels or User Documentation, (ii) defective media,
performance.
6
(m) Partner will deposit with Data Securities International, Inc. (the "Escrow
Agent", a complete and correct set of the Source and Object Code version of the
Partner Products (excluding 1.6b) to be held in escrow (the "Escrow Products")
and shall enter into the Escrow Agent's Master Preferred escrow agreement,
pursuant to which RN shall have the right to require that the Escrow Agent
provide some or all of the Escrow Products to RN or third parties if so required
by a governmental agency or court with jurisdiction over RN; in the event that
Partner undertakes or is subject to any of the actions set forth in Section
6.2(b); or in the event of Partner's material breach of this Agreement. Partner
shall pay any required escrow fee directly to the Escrow Agent.
(n) If Partner or its Authorized Distributors distributes the RMA Server
Software as part of a Bundle, RN's "RMA logo" and the words "RMA Compatible"
shall be prominently displayed on the product packaging and all product manuals
and documentation, in accordance with any Trademark Usage Guidelines provided by
RN.
(o) During the Term, Partner shall make available to RN at no charge, upon
release by Partner, a copy of all Updates and New Releases to the Partner
Products. Each Update or New Release shall, upon release by Partner, be subject
to all of the terms and conditions of the Agreement.
3. MARKETING CONSIDERATIONS
In consideration for participating in the Partner Program, and subject to the
terms and conditions of this Agreement, Partner shall be entitled to receive the
following marketing considerations from RN:
3.1 Trademark License. Partner shall have a non-exclusive non-transferable
license to use RN's trademarks and logos solely in connection with Partner's
user interfaces, packaging, collateral material and website, subject to
compliance with RN's Trademark Usage Guidelines, or as otherwise designated in
writing by RN from time to time. Partner agrees to furnish RN with samples of
any proposed usage of RN's trademarks or logos, and obtain RN's prior approval
for such usage, which approval will not be unreasonably withheld.
3.2 Customer Mailings. RN will send *****(1) e-mails to RN's customers promoting
the Partner Products. Such emails may list Partner's universal resource locators
("URL's") so that prospective customers can obtain additional information about
the Partner Products. Additionally, RN will solicit from existing RN customers
their desire to receive
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
7
collateral material from Partner. On Partner's behalf, providing that Partner
reimburses RN for its costs of mailing and supplies all collateral material, RN
will make one "bonded" mailing during the Term to RN's customers who indicate a
desire to receive collateral material about the Partner Products.
3.3 Participation in RN Events. RN agrees to feature Partner in the Partner Lab
at RN's RealMedia user conference. From time to time, RN will also include
Partner in RN press releases, and offer Partner the opportunity to participate
in trade shows and conference displays as ▇▇ ▇▇▇▇▇ appropriate.
3.4 Real Developer Program. RN will provide partner a complimentary membership
in the Real Developers program at the "Apps Developer" level for one year from
the Effective Date.
3.5 Advertising Impressions. During the Term, RN will provide Partner, without
charge, *****(1) page impressions of advertising on RN's website in such
location as RN determines in its discretion.
3.6 No Obligation to Include Partner Products. RN shall not be obligated to
include the Partner Client Software in any special versions of the RMA Player
provided to an RN-third party licensee if such licensee will not accept the
Partner Client Software.
4. SOFTWARE SUPPORT; UPGRADES
4.1 Development Support. RN shall provide complimentary technical support to
Partner in connection with Real Developers program for ninety (90) days from the
Effective Date. Such support includes unlimited telephone support and priority
e-mail support, and *****(1) additional support calls after the expiration of
the 90-day period.
4.2 Technical Support by Partner. Partner shall be solely responsible for
providing, and agrees that it will provide, all technical and customer support
for any Partner Products licensed by Partner or for any Partner Products
licensed and distributed by RN pursuant to Section 2.2. Partner agrees that it
will provide primary technical and customer support, by telephone and e-mail and
in accordance with RN's minimum support requirements, for any Licensed Software
(excluding the RN Products which are subject to Section 4.3), licensed and
distributed by or for Partner pursuant to Section 2.1. RN will enroll Partner,
without charge, in a one-day RealMedia technical training seminar at RN's
facilities, to train Partner to provide technical support to its end-user
customers for the Licensed Software, excluding the RN
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
8
Products. Partner shall be responsible for all out-of-pocket costs it incurs to
attend such seminar. RN shall provide back-up technical support, in the form of
telephone and e-mail, from 8:00 A.M. to 5:00 P.M. PST Monday through Friday to
Partner's primary support contact for the Licensed Software, excluding the RN
Products.
4.3 Technical Support by RN. RN will be solely responsible for providing
technical and customer support to those end-user customers to whom Partner has
licensed and distributed any RN Products pursuant to Section 2.1, in accordance
with the terms and conditions of a separate support agreement between RN and
each such end-user customer.
4.4 Updates; New Release. During the Term, each party shall make available to
the other party at no charge, upon public release by the party that created such
Updates and/or New Releases, a copy of all corresponding Updates or New
Releases, on the RN or Partner website, as applicable. Each Update or New
Release, upon release to either Partner or RN, shall be subject to all of the
terms and conditions of the Agreement.
5. PAYMENT
5.1(a) License Fees Paid by Partner. In consideration of the rights and licenses
granted herein, Partner agrees to pay RN certain license fees as follows:
(1) Partner shall pay RN the applicable license fees as set forth in
Schedules I and 2 ("License Fees").
(2) Notwithstanding Section 5.1 (a), Partner shall not owe RN any License
Fee on the sale of *****(1) and *****(1) that enable datatypes, other than
*****(1) or *****(1), to customers who have also purchased either *****(1) or
*****(1), provided Partner does not distribute any additional streams or New
Releases to such customers.
(3) RN reserves the right to revise the License Fees set forth above within
thirty (30) days of the start of each calendar year and again upon the
commercial release of each New Release. RN shall provide Partner thirty (30)
days' written notice of any change in the License Fee.
5.2 Payment Terms. Partner will provide RN with a written report by the 20th day
of each month for the preceding calendar month setting forth: (a) the number of
RMA Servers distributed; (b) the number of Partner clients distributed; (c) the
names and address to whom the RMA Servers and/or RealAudio and/or RealVideo
products were distributed; (d) the number of Partner Products distributed; (e)
the number of License Keys distributed; (f) the number of RealAudio and/or
RealVideo products distributed; (g) the type and number of any other RMA-based
products or related licenses distributed; (h) the price per unit charged for
each of the foregoing; (i) gross revenue receivable by Partner (whether or not
actually collected); and (j) the amount due to RN pursuant to Section 5.1 for
the preceding month. The report shall be accompanied by the payment due.
Payments shall be calculated based on sales invoiced by Partner and its
Authorized Distributors, whether or not the revenue is actually collected. All
payments due hereunder
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
9
shall be made in United States Dollars, without withholding or offset of any
kind. Interest shall accrue on all amounts past due hereunder at the monthly
rate of one and one-half percent (1.5%) or at the maximum legal rate, whichever
is less.
5.3 Books and Records. Partner shall keep books of account with respect to the
amounts due and the calculations required to be made under Section 5.1. Upon
RN's reasonable written request, and no more than once per year of the Term, RN
may audit and inspect all such books of account, through an independent third
party auditor and during normal business hours, provided that such auditor shall
undertake in writing to protect the confidentiality of the business data and
records of Partner. The cost of any such audit shall be paid by RN; provided,
however, that in the event RN initiates an audit under this Section 5.3 and it
is finally determined that the amount reported and paid by Partner pursuant to
Section 5.1 for the period(s) audited is, in the aggregate, less than
ninety-five per cent (95%) of the aggregate amount actually due, then Partner
shall pay the reasonable costs and expenses of said audit. If any such audit
reveals an underpayment of license fees, Partner shall make any correcting
payment within thirty (30) days. Any underpayment shall be subject to interest
of one and one-half percent (1.5%) per month or the maximum amount allowed by
law, whichever is less. Partner will maintain the books and records to each
reporting period for at least three years following the close of such period
6. TERM AND TERMINATION
6.1 Term. This Agreement shall commence as of the Effective Date, and terminate
on the earlier of *****(1) from the commercial release of a Partner Product or
*****(1) from the Effective Date (the "Term"), unless earlier terminated as
provided herein. This Term shall automatically be extended for additional one
year periods (each a "Renewal Term") unless either party notifies the other of
its election not to so extend this Agreement no later than 90 days prior to the
end of the Term or a Renewal Term.
6.2 Termination by Either Party. Either party may terminate this Agreement
immediately upon written notice to the other party in the event of any of the
following:
(a) should the other party fail to perform any material term or condition
of this Agreement, which shall constitute a default of this Agreement, and such
default has not been corrected within thirty (30) days of written notice from
the non-breaching party. In the event of a breach of Section 9 no cure period
need be provided.
(b) should the other party (i) make a general assignment for the benefit of
creditors; (ii)institute proceedings to be adjudicated a voluntary bankrupt, or
consent to the filing of a petition of bankruptcy against it; (iii) be
adjudicated by a court of competent jurisdiction as being bankrupt or insolvent;
(iv) seek reorganization under any bankruptcy act, or
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
10
consent to the filing of a petition seeking such reorganization; or (v) have a
decree entered against it by a court of competent jurisdiction appointing a
receiver, liquidator, trustee, or assignee in bankruptcy or in insolvency
covering all or substantially all of such party's property or providing for the
liquidation of such party's property or business affairs.
6.3 Termination by RN. RN may terminate this Agreement immediately upon written
notice to Partner in the event of any of the following:
(a) any attempted transfer or assignment of this Agreement or any right or
obligation hereunder, or any sale, transfer, relinquishment, voluntary or
involuntary, by operation of law or otherwise, of any interest in the direct or
indirect ownership or control of Partner without RN's prior written approval;
(b) any failure of Partner to pay, when due, any indebtedness owing by
Partner to RN, unless expressly waived in writing by RN.
6.4 Effect of Termination.
(a) Upon the effective date of termination of this Agreement for a material
breach by Partner, the licenses granted hereunder shall terminate immediately.
Partner will either immediately return all Licensed Software to RN or certify in
writing to RN that all copies of all Licensed Software have been destroyed. RN
may discontinue promotion and distribution of Partner Products or continue to
distribute Partner Products during the Sell-Off Period, set forth in Section
6.4(b), at its sole discretion. Notwithstanding anything in this Agreement to
the contrary, under no circumstances may Partner distribute Partner Client
Software after the expiration or termination of this Agreement, for any reason,
without RN's express written consent.
(b) For two (2) months after the expiration or termination of this
Agreement other than by reason of Partner's material breach ("Sell-Off Period"),
Partner may advertise and sell the Partner Products, Licensed Software, or RN
Products, in its inventory or necessary to fulfill orders confirmed as of the
expiration or termination date, and shall pay License Fees and render statements
in the same manner as during the Term. After the end of the Sell-Off Period,
Partner shall return to RN, at Partner's expense, all copies of the Partner
Products, Licensed Software and RN Products, or RN may instruct Partner to
destroy them. Partner shall furnish RN with affidavits certified by an officer
of Partner attesting to such destruction.
(c) Any termination of this Agreement shall not release Partner from paying
any amount that may then be owing to RN, or that may become due to RN in the
future.
11
(d) Notwithstanding any other terms or conditions of the Agreement, the
rights of end-user customers to use any Licensed Software, RN Products and/or
Partner Products distributed by Partner shall survive any termination or
expiration of the Agreement, provided that License Fees for said Licensed
Software or RN Products or Partner Products have been paid to RN.
7. CONFIDENTIALITY
"Confidential Information" means any trade secret information or information
otherwise designated by a party as being confidential relating to either party's
products, product plans, designs, computer code, technical information, costs,
pricing, financing, marketing plans, business opportunities, personnel, research
and development or know-how. Confidential Information shall not include
information that (i) is or becomes generally known or available through no fault
of the receiving party, (ii) was known by or disclosed to the receiving party
prior to disclosure, (iii) is independently developed by the receiving party, or
(iv) is made generally available by the disclosing party without any
restriction. The parties shall use reasonable efforts and at least the same care
that each uses to protect its own Confidential Information of like importance,
to prevent unauthorized dissemination or disclosure of the other party's
confidential information during and for three (3) years following the last day
of the Term. Neither party will use the other's Confidential Information for
purposes other than those necessary to directly further the purposes of this
Agreement. Neither party will disclose to third parties the other's Confidential
Information without the prior written consent of the other party, provided,
however, that nothing will preclude a party from making disclosure to a third
party for the purpose of due diligence in a financing transaction, merger,
acquisition, business combination or other similar transaction, or from making
any disclosures to any governmental agency having jurisdiction over the
disclosing party, or unless otherwise required by law, government order or court
proceeding. Each party shall return the Confidential Information to the other
party upon termination of the Agreement or upon the request of the other party.
Except as expressly provided in this Agreement, no ownership or license right is
granted in any Confidential Information.
8. PROPRIETARY RIGHTS
8.1 Partner. Partner shall retain all right, title and interest in and to the
Partner Products, including any copyright, trademarks, patent, trade secret, or
other intellectual property rights therein, subject to RN's underlying ownership
in any Licensed Software or RN Products included therein, and in and to Partner
Confidential Information, regardless of the media or form on or in which the
Partner Products or Partner Confidential Information, or copies thereof, may
exist. Notwithstanding the foregoing, Partner agrees that it shall not register
or attempt to register any copyrights or trademarks, or to seek to obtain any
12
patents in connection with any Partner Product, including, but not limited to,
in any device, process, method, function or invention included therein or
necessary for the operation thereof, which would in any way interfere with,
limit or prohibit RN's continued use, development or ownership of RMA.
8.2 RN. RN shall retain all right, title and interest in and to the Licensed
Software and RN Products, including any copyright, trademarks, patent, trade
secret, or other intellectual property rights therein, all RN trademarks and in
and to all RN Confidential Information, regardless of the media or form on or in
which the Licensed Software, the RN Products, or the RN Confidential
Information, or copies thereof, may exist. Partner acknowledges and agrees that
the Licensed Software and the RN Products are proprietary to RN, and is
protected by the copyright laws of the United States and international copyright
treaties. Unauthorized copying of the Licensed Software, or the RN Products,
including modification, merger or inclusion with any other software or products,
is expressly forbidden. Partner shall not be deemed, by anything contained in or
done pursuant to this Agreement, including by implication, to acquire any right,
title or interest in any trademark, copyright, patent or other intellectual
property of RN, and shall do nothing to prejudice the value or validity of RN's
rights therein or ownership thereof.
9. LIMITED WARRANTY
9.1 Limited Warranty. RN warrants, solely for the benefit of Partner, that for a
period of ninety (90) days from the date of delivery to Partner: (i) the
Licensed Software, if operated as directed, will substantially achieve the
functionality described in the User Documentation, and (ii) that the media
containing the Licensed Software, if provided by RN, is free in material
respects from defects in material and workmanship; provided, however, that the
foregoing warranty is expressly contingent (and shall be otherwise void) upon:
(1) the use of the Licensed Software strictly in accordance with the
instructions and User Documentation therefor; (2) the absence of misuse or
damage thereto; (3) the absence of any alteration or modification thereto; and
(4) Partner's acceptance of Licensed Software for distribution with knowledge
that the media upon which the Licensed Software are reproduced by Partner may
contain certain defects. RN makes no representation or warranty that the
information or functions contained in the Licensed Software will meet Partner's
requirements or that the use or operation of the Licensed Software will be
uninterrupted, error free or secure, or that any Licensed Software defects are
correctable or will be corrected. THE FOREGOING WARRANTY SHALL NOT APPLY TO THE
SAMPLE SOURCE CODE, WHICH IS PROVIDED TO PARTNER AS IS, WITHOUT WARRANTY OF ANY
KIND.
9.2 NO OTHER WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, RN
AND ITS LICENSORS DISCLAIM ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS
13
FOR A PARTICULAR PURPOSE, WHICH ARE EXPRESSLY DISCLAIMED, WITH REGARD TO THE
LICENSED SOFTWARE, THE RN PRODUCTS, AND THE USER DOCUMENTATION. THIS LIMITED
WARRANTY GIVES PARTNER SPECIFIC LEGAL RIGHTS. PARTNER MAY HAVE OTHERS, WHICH
VARY FROM STATE/JURISDICTION TO STATE/JURISDICTION.
9.3 Remedies. RN's entire liability and Partner's exclusive remedy for any
breach of the limited warranty set forth in Section 9.1 shall be, in RN's sole
discretion: (i) to exercise reasonable efforts to replace in a timely manner,
defective media provided by RN to Partner, or defective media that is
sublicensed by Partner to a Partner's end-user corporate customer pursuant to
Section 2.1; or (ii) to advise Partner or Partner's corporate end-user, within a
reasonable period of time after notice is received from Partner of the defect,
how to achieve substantially the same functionality with the Licensed Software
as described in the User Documentation through a procedure different from that
set forth in the User Documentation. Repaired, corrected or replaced Licensed
Software and User Documentation shall be covered by this limited warranty for
the period remaining under the warranty that covered the original Licensed
Software, or if longer, for thirty (30) days after the date RN either shipped to
Partner the repaired or replaced Licensed Software or RN advised Partner as to
how to operate the Licensed Software so as to achieve the functionality
described in the Documentation, whichever is applicable.
10. INDEMNIFICATION
10.1 RN's Indemnification. RN shall defend Partner and its directors, officers,
agents, employees and representatives, in any third party action for
infringement by, or alleged infringement by the Licensed Software of any
trademark, service ▇▇▇▇, patent, copyright, or misappropriation of any trade
secret by the Licensed Software, and will pay any final judgments awarded or
settlements entered into in any such action. Partner agrees that it shall notify
RN of all threats, claims and proceedings related to any such suit promptly
after such threat, claim or proceeding comes to the attention of Partner. RN
shall have sole control of the defense and/or settlement of any such suit, and
Partner shall furnish to RN, upon request, information available to Partner for
such defense, and shall provide RN with such assistance in defending such suits
as is requested by RN, at RN's expense. If Partner's use of the Licensed
Software under the terms of this Agreement is, or in RN's opinion is likely to
be, enjoined due to the type of infringement or misappropriation specified
above, then RN may, at its sole option and expense, either (i) procure for
Partner the right to continue using the Licensed Software under the terms of
this Agreement; or (ii) replace or modify the affected Licensed Software so that
it is noninfringing and substantially equivalent in function to the enjoined
Licensed Software. The foregoing obligation of RN does not apply (i) with
respect to versions of the Licensed Software or portions or components thereof:
(a) which are modified after shipment, if the alleged infringement relates to
such modification, and if such modification was not authorized, expressly
permitted or performed by RN; (b) which are combined with other products,
processes or materials, if the alleged infringement relates
14
to such combination and if RN did not authorize or expressly permit the
combination; or (c)where Partner's use of the Licensed Software is not in
accordance with the license granted under this Agreement; or (ii) for use or
distribution of Licensed Software or otherwise not in accordance with the terms
and conditions of this Agreement.
10.2 Partner Indemnification. Partner shall defend RN and its directors,
officers, agents, employees and representatives, in any third party action for
infringement by, or alleged infringement by the Partner Products of any
trademark, service ▇▇▇▇, patent, copyright, or misappropriation of any trade
secret by the Partner Products, and will pay any final judgments awarded or
settlements entered into in any such action. RN agrees that it shall notify
Partner of all threats, claims and proceedings related to any such suit promptly
after such threat, claim or proceeding comes to the attention of RN. Partner
shall have sole control of the defense and/or settlement of any such suit, and
RN shall furnish to Partner, upon request, information available to RN for such
defense, and shall provide Partner with such assistance in defending such suits
as is requested by Partner, at Partner's expense. If RN's use of the Partner
Products under the terms of this Agreement is, or in Partner's opinion is likely
to be, enjoined due to the type of infringement or misappropriation specified
above, then Partner may, at its sole option and expense, either (i) procure for
RN the right to continue using the Partner Products under the terms of this
Agreement; or (ii)replace or modify the affected Partner Products so that it is
noninfringing and substantially equivalent in function to the enjoined Partner
Products. The foregoing obligation of Partner does not apply (i) with respect to
versions of the Partner Products or portions or components thereof: (a)that are
modified after shipment, if the alleged infringement relates to such
modification, and if such modification was not authorized, expressly permitted
or performed by Partner; (b)that are combined with other products, processes or
materials, if the alleged infringement relates to such combination and if
Partner did not authorize or expressly permit the combination; or (c) where RN's
use of the Partner Products is not in accordance with the license granted under
this Agreement; or (ii) for use or distribution of Partner Products or otherwise
not in accordance with the terms and conditions of this Agreement.
11. LIMITATION OF LIABILITY
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL OR PUNITIVE DAMAGE OR LOSS OF ANY NATURE (E.G.,
DAMAGE TO PROPERTY, LOSS OF PROFITS, BUSINESS INTERRUPTION, LOST SAVINGS, LOSS
OF USE, LOST OR DAMAGED FILES OR DATA, INJURY TO PERSON, OR ANY CLAIMS OF THOSE
NOT A PARTY TO THE AGREEMENT)WHICH MAY ARISE IN CONNECTION WITH THE USE,
ADAPTATION, MERGER, CORPORATION,DISTRIBUTION, INSTALLATION, REMOVAL OR SUPPORT
OF THE LICENSED SOFTWARE, THE RN PRODUCTS, AND/OR THE PARTNER PRODUCTS PURSUANT
TO THIS AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIMS ARE BASED IN WARRANTY,
CONTRACT, NEGLIGENCE, TORT, PRODUCTS LIABILITY OR OTHERWISE, EVEN IF THE PARTY
HAS BEEN ADVISED OF THE POSSIBILITY
15
OF SUCH DAMAGE OR LOSS. BECAUSE SOME STATES/JURISDICTIONS DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL, DAMAGES,
THE ABOVE LIMITATION MAY NOT APPLY, AND THE PARTIES MAY ALSO HAVE OTHER RIGHTS
WHICH VARY FROM STATE TO STATE.
12. DISPUTE RESOLUTION
12.1 Coverage. Any dispute arising out of or relating to this Agreement shall be
resolved in accordance with the procedures specified in this Section, which
shall be the sole and exclusive procedures for the resolution of any such
dispute. Other than actual or imminent material breaches of Sections 2, 7 and 8,
any dispute between the parties with respect to this Agreement shall be
submitted for structured negotiation. The commencement, and any resolution
reached as a result, of any dispute resolution under this Section shall be
considered Confidential Information and shall be treated as compromise and
settlement negotiations.
12.2 Structured Negotiation. Either party may invoke this procedure by giving
written notice set forth the details of and its position with respect to the
dispute to the other party, and designating therein a corporate officer with
appropriate authority to be its representative in negotiations relating to the
dispute. The other party shall designate a corporate officer with similar
authority within three (3) business days of its receipt of such notice. The
designated officers shall, following whatever investigation each deems
appropriate, but no event later than twenty (20) business days after the
original notice, enter into discussions concerning the dispute. If the
representatives do not resolve the dispute within an additional twenty (20)
business days of their initial meeting, either party may submit the matter to
binding arbitration under Section 12.3.
12.3 Binding Arbitration.
(a) Any dispute not settled by the parties by structured negotiation (other
than actions for injunctive relief including specific performance) shall be
submitted only to binding arbitration. The arbitration will be conducted in
accordance with the procedures set forth herein and the Arbitration Rules for
Commercial Arbitration Rules of the AAA. In the event of a conflict with such
rules, this Agreement will control.
(b) The arbitration shall take place in Seattle, Washington, before a panel
of three arbitrators appointed as follows: each party shall select a single
arbitrator, and the two (2) selected arbitrators shall mutually agree upon a
third. The arbitrators selected shall have knowledge and experience in the
computer software business. The arbitrators shall rule on the dispute by issuing
a written opinion setting forth findings of fact and the rationale for their
decision within thirty (30) days after the close of hearings. The decision
rendered by the arbitrators shall be final and binding and may be entered as a
judgment in any court of competent jurisdiction. The arbitrators shall control
the scheduling so as to process the matter expeditiously. The times specified in
this Section may be extended
16
upon mutual agreement of the parties upon a showing of good cause. The parties
may submit written briefs. Discovery shall be controlled by the arbitrators and
shall be permitted as follows: each party may submit in writing to the other
party, and that party shall so respond, to a maximum of any combination of
thirty-five (35) (none of which may have subparts) of interrogatories, demands
to produce documents, and requests for admission. Unless provided otherwise in
the Agreement, the arbitrators may not award non-monetary or equitable relief of
any sort. They will have no power to award damages inconsistent with the
Agreement. In no event, even if any other portion of these provisions is held to
be invalid or unenforceable, shall the arbitrators have power to make an award
or impose a remedy that could not be made or imposed by a court deciding the
matter in the same jurisdiction.
(c) Any issue concerning the extent to which any dispute is subject to
arbitration, or concerning the applicability, interpretation, or enforceability
of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, shall be governed by the Federal
Arbitration Act and resolved by the arbitrators. No potential arbitrator may
serve on the panel unless he or she has agreed in writing to abide and be bound
by these.
(d) Each party shall bear its own costs of arbitration. A party seeking
discovery shall reimburse the responding party the costs of production of
documents (to include search time and reproduction costs). The parties shall
equally split the fees of the arbitration and the arbitrators.
12.4 Provisional Remedies. The procedures specified in this Section shall be the
sole and exclusive procedures for the resolution of disputes between the parties
arising out of or relating to this Agreement; provided, however that a party,
without prejudice to the mandatory procedures of this Section, may file a
complaint for statute of limitations or venue reasons, or seek a preliminary
injunction or other provisional judicial relief, if in its sole judgment such
action is necessary to avoid irreparable damage or to preserve the status quo.
Notwithstanding such action, the parties will continue to participate in good
faith in the procedures specified in this Section.
12.5 Tolling, Statute of Limitations. All applicable statutes or limitation and
defenses based upon the passage of time shall be tolled while the procedures
specified in this Section are pending. The parties will take such action, if
any, required to effectuate such tolling.
12.6 Performance to Continue. Each party agrees, and is required, to continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement.
17
13. GENERAL
13.1 Notice. Any notice or other communication permitted or required under this
Agreement shall be given in writing and shall be deemed effective upon personal
delivery (including courier service), overnight mail delivery, upon confirmed
facsimile transmission, or five (5) days after deposit, postage prepaid, in the
first class mail of the United States properly addressed to the appropriate
party at the address set forth below:
RN: Real Networks, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Point of contact: ▇▇▇ ▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Partner: Digital Lava Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Point of contact: ▇▇▇▇▇ ▇▇▇▇▇, CFO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may from time to time change such address by giving the
other party notice of such change in accordance with this Section.
13.2 Independent Contractors. RN and Partner are independent contractors in all
relationships and actions under and contemplated by the Agreement.
Notwithstanding anything in this Agreement to the contrary, the parties do not
by this Agreement intend to form, nor shall this Agreement be construed to
constitute, a partnership, joint venture, employment, or agency relationship
between them, or to authorize Partner or any Authorized Distributors to enter
into any commitment or agreement binding on RN or to allow one party to accept
service of any legal process addressed to, or intended for, the other party.
Partner and Authorized Partners shall not make any warranties, guarantees or any
other commitments on behalf of RN pursuant to the Agreement.
13.3 No Assignment. Partner shall not assign, transfer or otherwise dispose of
this Agreement or any rights or duties hereunder without the prior written
consent of RN, provided that Partner may assign this Agreement without RN's
prior written consent pursuant to a sale of substantially all of Partner's
assets, or in connection with a merger, or consolidation. However, if the sale,
merger or consolidation by Partner is to or with a competitor of RN, Partner is
required to obtain RN's prior written consent. If the contemplated sale, merger
or consolidation by Partner is with *****(1), in addition to having the right to
refuse to consent, RN shall have a right of first refusal for the
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
18
exclusive rights to purchase Partner's assets or stock on the same terms as the
best offer from *****(1).
13.4 Survival. The following provisions shall survive the expiration or
termination of this Agreement: the applicable provisions of Sections 2.3, 5.3,
6.4, and 7 through 12.
13.5 U.S. Government Restricted Rights and Export Restriction. The Licensed
Software, RN Products, and User Documentation are provided with RESTRICTED
RIGHTS. Use, duplication or disclosure by the Government is subject to
restrictions set forth in subparagraphs (a) through (d) of the Commercial
Computer Software--Restricted Rights at FAR 52.227-19 when applicable, or in
subparagraph (c)(l)(ii) of the Rights in Technical Data and Computer Software
clause at DFARS 252.227-7013, and in similar clauses in the NASA FAR supplement,
as applicable. Manufacturer is Real Networks, ▇▇▇./▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇/
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. Partner acknowledges that none of the Licensed
Software, RN Products, or underlying information or technology may be downloaded
or otherwise exported or re-exported: (i) into (or to a national or resident of)
Cuba, Iran, Iraq, Libya, North Korea, Syria, Sudan or Angola or any other
country to which the U.S. has embargoed goods; or (ii) to anyone on the U.S.
Treasury Department's list of Specially Designated Nationals or the U.S.
Commerce Department's Table of Denial Orders.
13.6 Miscellaneous. This Agreement, and any exhibits and schedules attached
hereto and incorporated herein, constitute the complete and exclusive agreement
between RN and Partner with respect to the subject matter hereof, and supersedes
all oral or written understandings, communications or agreements not
specifically incorporated herein. If any provision in this Agreement is held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions will continue in full force without being impaired or
invalidated in any way. No waiver, amendment or modification of any provision of
this Agreement shall be effective unless it is in a document which expressly
refers to this Agreement and is signed by authorized representatives of both
parties. Except as specifically provided herein, failure or delay by either
party in exercising any rights or remedy under this Agreement shall not operate
as a waiver of any such right or remedy. Headings shall not be considered in
interpreting this Agreement. This Agreement shall be governed by the laws of the
State of Washington, without regard to its conflict of laws rules. The United
Nations Convention of Contracts for the International Sale of Goods is expressly
excluded.
19
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date written above.
REAL NETWORKS, INC. DIGITAL LAVA INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
----------------------- --------------------------
Name: ▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President MSDIV Title: CEO
Date: 4/13/98 Date: 6 April '98
20
EXHIBIT A
Partner Products
VideoVisor
vPrism
VideoVisor Publisher
21
EXHIBIT B
RMA Server
The RMA Server includes the following:
1) installer for the appropriate operating system platform
2) operators manual
3) exposed interfaces to plug-in a monitor, administrator, file system,
datatype or broadcast datatype
4) base-level monitoring tool
5) ability to stream a datatype given a file format plug-in or broadcast
plug-in and license key
6) supports the following platforms: Windows NT; UNIX (Free BSD, Solaris 2.5,
Linux, DEC UNIX, BSDI, HP/UX, SunOS 4.1, IRIX and AIX)
22
SCHEDULE I
Except for the RN Products, which are subject to Schedule 2, Partner shall pay
RN at the rate of *****(1) plus *****(1) of the total gross revenue receivable
by Partner from the sale, license or distribution of all RMA-based products,
including Partner Products, RMA Players, RMA Servers, License Keys, Updates, New
Release and any site licenses.
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
23
SCHUEDULE 2
Partner shall pay RN at the discounted rate of *****(1) off from RN's listed
retail price for the RN Products.
--------
(1) Confidential information is omitted and identified by an * and filed
separately with the SEC pursuant to a request Confidential Treatment.
24
