EXHIBIT 10.24
AMENDED AND RESTATED SETTLEMENT AGREEMENT
This Amended and Restated Settlement Agreement (the "Agreement") is entered
into as of this 10th day of March, 2006 (the "Signing Date"), by and between
RealNetworks, Inc., a corporation organized and existing under the laws of the
State of Washington, and its subsidiaries (collectively, "Real"), and Microsoft
Corporation, a corporation organized and existing under the laws of the State of
Washington, and its subsidiaries (collectively, "Microsoft"). Real and Microsoft
are each referred to in this Agreement as a "Party" and collectively as the
"Parties." For purposes of the Agreement, references to Real and Microsoft shall
include their respective Affiliates (as defined below).
WHEREAS, Real filed a lawsuit in federal court in the United States
alleging violations of antitrust laws, unfair competition laws and other claims
and participated in proceedings in the European Union and with the Korean Fair
Trade Commission asserting violation of applicable antitrust laws, more
particularly described in Section 1 below and referred to collectively herein as
the "Actions,"
WHEREAS, Microsoft denied any and all liability to Real in connection with
the matters described in the Actions and further denied that it violated any
law, ordinance or regulation of any jurisdiction or engaged in any wrongdoing of
any kind whatsoever,
WHEREAS, Real and Microsoft, having determined it to be desirable to settle
and resolve all claims asserted in the Actions, entered into the Settlement
Agreement (the "Previous Agreement") dated as of the 11th day of October, 2005
(the "Effective Date"), and an amendment to the Previous Agreement dated as of
the 3rd day of March, 2006 (the "Amendment"), for the purpose of compromising
disputed claims and alleviating the expense, delay and inconvenience associated
with the Actions, and
WHEREAS, the Parties desire to incorporate all of the terms of the Previous
Agreement and the Amendment into one agreement pursuant to this Agreement,
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the Parties acknowledge, it is mutually agreed by and
between the Parties as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below.
"Actions" means:
(1) In the U.S.: the action captioned RealNetworks, Inc. v. Microsoft
Corp., Civil Action No. JFM-04-968, MDL Docket No. 1332, in the
United States District Court for the District of Maryland,
originally filed as Case No. C03-5717 (JW) (EAI), in the United
States District Court for the Northern District of California
("the U.S. Action");
(2) In the EU: Case COMP/C-3/37.792 that culminated in a decision of
the European Commission on March 24, 2004 ("the EU Decision"),
Microsoft's appeal from the EU Decision in the action captioned
Microsoft v. Commission of the European Communities, Case
T-201/04, the appeal in the action captioned Microsoft v.
Commission of the European Communities, Case T-313/05 and the
complaint filed by third party CCIA with the European Commission
on February 11, 2003, including
any other filings concerning the appeal, implementation, or
enforcement of the EU Decision; and
(3) In Korea: The proceedings identified as Case No. 2005 Kyungchok
0375, Case Concerning Abuse of Market Dominant Position by
Microsoft Corporation and Microsoft Korea, Inc.
"Affiliates" means any entity directly or indirectly controlling, controlled by
or under common control with a Party hereto, where "control" means beneficial
ownership of greater than fifty percent (50%) of equity interest therein.
"Change of Control" means a transaction or series of related transactions that
results in (a) a sale to a single person or entity or two or more persons or
entities acting as a "group" (as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder) of all or substantially all of the assets of a Party or of a line of
business of a Party other than directly or indirectly to an Affiliate of such
Party, (b) the transfer, directly or indirectly, to a single entity or such
"group" of fifty percent (50%) or more of the outstanding voting power of a
Party (other than directly or indirectly to an Affiliate of such Party), or (c)
the acquisition by an entity or such "group", by reason of any contractual
arrangement or understanding, of (i) the right or power to appoint or cause to
be appointed a majority of the directors or persons serving similar functions of
such Party or of a line of business of a Party or (ii) the power to direct or
cause the direction of the management and policies of such entity, whether
through the ownership of voting securities, by contract, management agreement or
otherwise.
"OEM" means an original equipment manufacturer licensed by Microsoft to
pre-install Windows operating system software on its new personal computers.
"Windows" means the software code (as opposed to source code) distributed by
Microsoft to any licensee as Windows XP Home, Windows XP Professional, Windows
XP Media Center Edition, the predecessors and successors to the foregoing
operating systems distributed during the Term of this Agreement, including, as
applicable, Windows Vista and its successors, including upgrades, bug fixes,
service packs, or any other versions of Windows that support digital media for
use with personal computers, servers, or devices. The term "Windows" also means
the software code (as opposed to the source code) distributed commercially by
Microsoft for use with server computers as Windows 2000 Server, Windows Server
2003 Standard Edition, Windows Server 2003 Enterprise Edition, Windows Server
2003 Data Edition, Windows Server 2003 Web Edition and their successors,
including but not limited to upgrades, bug fixes, and service packs.
"Windows Vista" means the next major version of the Windows operating system to
be released, which, when released, will supersede Windows XP and Service Pack
updates thereto as the Microsoft flagship operating system. References in the
Agreement to "Windows Vista" shall also be deemed to include all successors or
future versions of the Windows operating system after Windows Vista that support
digital media during the Term.
"Windows XP and Updates" means the Windows XP Home and Windows XP Professional
versions of Windows, including Service Packs and other updates or modifications
to those products. Windows XP and Updates does not include Windows Vista or its
successors.
2. Dismissal of the Actions: Real agrees that as soon as possible and in
any event within five (5) business days of the Effective Date and
provided that Real has received payment of the amount set forth in
Section 4, Real shall take all steps necessary to conclude its
participation in the
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Actions with finality, with prejudice and with each Party to bear its
own costs and attorneys' fees, including without limitation:
a. In the U.S.: Filing a stipulation of dismissal with
prejudice pursuant to Rule 41(a)(1)(ii) of the Federal Rules
of Civil Procedure, each Party to bear its own attorneys'
fees and costs. The Parties agree to execute and file a
stipulation in the form attached hereto as Exhibit A.
b. In the EU: Submitting a formal notice of withdrawal from the
Actions in Europe.
c. In Korea: Submitting to the Korean Fair Trade Commission a
letter withdrawing any and all complaints, reports or
petitions it has filed with the Korean Fair Trade Commission
with respect to the Actions or otherwise, and delivering to
Microsoft a photocopy of the original letter and an
affidavit confirming its submission.
Real agrees that, as of the Effective Date, it will take no further steps
to participate in the Actions, and will instruct its counsel, consultants,
and representatives to take no further steps to participate on Real's
behalf in the Actions, or in any other administrative or judicial
proceedings anywhere in the world based upon the same facts, occurrences,
or transactions complained of in the Actions (excluding intellectual
property claims) unless both Real and Microsoft consent to such further
participation. Real further warrants and represents that it has not
submitted any other written complaints, reports, or petitions concerning
the facts, occurrences, or transactions complained of in the Actions to any
governmental entities or courts other than those identified in the
definition of "Actions" in Section 1 and as required in Real's Securities
and Exchange Commission filings. Real shall send the letter attached as
Exhibit B to its counsel, consultants, and representatives and to the
courts, investigators, or regulators participating in the Actions as of the
Effective Date. Real's public statements and its communications shall be
consistent with the terms and provisions of this Agreement. The duty to
take no further steps in the Actions shall not, however, apply to (i) any
communication in response to a request for information from any court,
regulatory agency or governmental investigator of competent jurisdiction
that has the power to compel the provision of such information, or (ii) any
communication by Real required by the competition laws of any competent
jurisdiction.
Nothing in this Agreement shall preclude Real from participating in or
being a member of any industry organization or association, even if that
organization or association takes positions or engages in activities
related to the Actions or the facts, occurrences or transactions complained
of in the Actions; provided, however, that Real will not vote in favor of
any such complaint within the organization or association and, subject to
subsections (i) and (ii) in the preceding paragraph, Real will not file
submissions or present testimony before the court or regulatory agency in a
proceeding addressing the facts, occurrences or transactions complained of
in the Actions.
3. Release.
a. Real and its Affiliates hereby release and discharge Microsoft and
its Affiliates, and their present and former directors, officers,
employees, representatives, agents, attorneys or other legal
representatives of and from any and all claims, actions, causes of
action, suits, rights, damages, liabilities and demands, known or
unknown, under the laws, rules or regulations of
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any country or jurisdiction anywhere in the world that each of them
ever had, or now has, or may hereafter arise by virtue of new rights
created in law or in equity that:
(i) have been asserted or complained of in the Actions or that
could have been asserted or complained of in the U.S. Action by Real
(excluding intellectual property claims); or
(ii) are based on the integration into Windows Vista of (a) (1)
those functions and features that are integrated into Windows XP as
part of Windows Media Player as of the Effective Date or (2) other
media functions and features that are integrated into Windows XP as of
the Effective Date and (b) that are integrated into Windows Vista in
an equivalent manner as those media functions and features are
integrated in Windows XP as of the Effective Date (excluding
intellectual property claims). Notwithstanding the foregoing, Real is
not releasing any claims concerning the integration into Windows after
the Effective Date of any store or service providing digital media
content.
b. Microsoft and its Affiliates hereby release and discharge Real and
its Affiliates, and their present and former directors, officers,
employees, representatives, agents, attorneys or other legal
representatives of and from any and all claims, actions, causes of
action, suits, rights, damages, liabilities and demands, known or
unknown, under the laws, rules or regulations of any country or
jurisdiction anywhere in the world that each of them ever had, or now
has, or may hereafter arise by virtue of new rights created in law or
in equity that either have been asserted or complained in the Actions
or could have been asserted or complained of in the U.S. Action by
Microsoft or its affiliates (excluding intellectual property claims).
This release also applies to any claim or complaint that Microsoft and
its Affiliates may hereafter acquire or control by way of future
acquisition or merger, provided that the claim or complaint would have
fallen within the terms of this release if the claim or complaint had
belonged to Microsoft and its Affiliates at the Effective Date.
c. Waiver of Civil Code Section 1542. It is the Parties' intention in
executing this Agreement that this Agreement shall be effective as a
full and final accord and satisfaction and release of the Actions. In
furtherance of this intention, the Parties acknowledge that they are
familiar with Section 1542 of the Civil Code of the State of
California, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor.
The Parties waive and relinquish any right or benefit that they have
or may have under Section 1542 of the California Civil Code to the
full extent that they may lawfully waive all rights and benefits
pertaining to the subject matter of this Agreement.
d. Protective Order in U.S. Action: Nothing contained in this
Agreement modifies the Parties' obligations as set forth in the
protective order for the treatment of confidential information entered
in the U.S. Action.
4. Cash Payment: On the fifth business day following the Effective Date,
Microsoft will pay to Real the amount of four hundred sixty million
U.S. Dollars ($460,000,000) by wire transfer. Microsoft shall provide
twenty-four (24) hours advance notice to Real of the wire transfer.
Real shall provide in writing on its letterhead and attached as
Exhibit C to this Agreement, the following wire transfer
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information: account name, account number, ABA number, bank address,
and bank contact information.
5. Technology: Microsoft shall provide Real with the information,
services, and technical assistance as set forth in Exhibit D.
6. Term: This Agreement shall enter into force as of the Effective Date.
Except for the provisions of the Agreement entitled "Dismissal of the
Actions" and "Release" (which shall be perpetual), this Agreement
shall expire on May 1, 2011; provided, however, that the commitments
regarding licenses contemplated in Section 5 shall expire ten (10)
years from the Effective Date.
7. Senior Stakeholder Meetings and Program Management:
a. Executive Sponsors and Senior Executives: Within fifteen (15) days
of the Effective Date, each Party will appoint one (1) person with the
title of Vice President or higher as the executive sponsor responsible
for overall technical cooperation with the other Party ("Executive
Sponsor") and will provide the contact information for that Executive
Sponsor to the other Party. Each Party will have the right to replace
its Executive Sponsor (provided the replacement is a person with the
title of Vice President or higher) by providing written notice of such
replacement to the other Party, such notice to include contact
information for the new Executive Sponsor. Unless agreed otherwise,
the Executive Sponsors will meet in person within thirty (30) days of
the Effective Date and quarterly thereafter (in person or via
telephonic conference) and as necessary pursuant to Section 8(a)
below, to discuss and resolve any issues arising between the Parties
and, to discuss the Parties' technical cooperation and exchange of
relevant information pursuant to this Agreement. In addition to their
respective Executive Sponsors, Microsoft and Real will appoint
additional named senior executives to meet not less frequently than
semi-annually, with the goal of maintaining and developing the working
relationship and improved collaboration between the parties.
b. Program Management Contacts: Within thirty (30) days of the
Effective Date, each Executive Sponsor will appoint one person to
manage the relationship and activities contemplated by this Agreement
for that Party (a "Program Management Contact") and will provide the
contact information for that Program Management Contact to the other
Executive Sponsor. Each Party will have the right to replace its
Program Management Contact by providing written notice of such
replacement to the other Party's Executive Sponsor, such notice to
include the contact information for the new Program Management
Contact. Each Party's Program Management Contact will be responsible
for managing that Party's operational obligations regarding
deliverables under this Agreement and will be the day to day contact
for the identification and resolution of issues between the Parties.
The Program Management Contacts will meet in person or via telephonic
conference, as needed and, no less than once each month during the
term of this Agreement, to discuss the status of operational
activities under this Agreement.
8. Dispute Resolution.
a. Negotiation: The Parties agree that they shall attempt in good
faith to promptly resolve within thirty (30) days in an amicable
manner any controversy or claim arising out of or relating to this
Agreement, or the claimed breach thereof ("Dispute"). The thirty (30)
day negotiation period shall commence upon the receipt of written
notice specifically setting forth the basis for any Dispute not
resolved in the ordinary course of business. The notice shall include
(a) a statement of that Party's position and a summary of arguments
supporting that position, and (b) all requested relief. Unless
otherwise agreed, within fifteen (15) days after
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receipt of the notice, the Executive Sponsors or their designees shall
meet at a mutually acceptable time and place, and thereafter as often
as they deem necessary, to attempt to resolve the Dispute. All
negotiations pursuant to this Section 8(a) shall be confidential and
the Parties will not rely on, or introduce as evidence, the conduct or
statements of the Parties during these negotiations in any arbitral,
judicial or other proceedings. Participation in negotiations pursuant
to this Section 8(a) shall be a condition precedent to the initiation
of arbitration proceedings as set forth in Section 8(b).
b. Arbitration: Any Dispute relating to Section 5 of this Agreement
which has not been settled within the required thirty (30) day
negotiation period shall be settled by binding arbitration
administered by an arbitrator(s) as described below. Unless otherwise
specified herein, the Arbitration shall be conducted pursuant to the
Commercial Arbitration Rules of the American Arbitration Association,
including the Optional Rules for Emergency Measures of Protection.
Judgment on the award rendered by the arbitrator may immediately be
entered in any court having jurisdiction.
i. Appointment of Arbitrator. The first time either Party
serves a written notice of a Dispute, either Party may, in
its Dispute notice or by written notice ("Arbitrator
Notice") thereafter, request the appointment of an
arbitrator as provided in this Section 8(b). The Parties
will, within forty-five (45) days of the Arbitrator Notice,
agree on an arbitrator or arbitrators to be appointed. Each
arbitrator is to be a neutral party who is either a
practicing attorney or retired judge with experience in
technology cases or an individual with a strong background
in the technology subject to arbitration. As a condition to
appointment, each arbitrator must agree in writing to
maintain the existence, content (including all documents and
submissions submitted to the arbitrator), and the results of
any arbitration proceeding in confidence. If the Parties
fail to agree upon a single arbitrator within ten (10) days
of the Arbitrator Notice, the arbitration will be conducted
by a panel of three (3) arbitrators appointed as follows.
Each Party shall appoint one arbitrator. If either Party
fails to appoint an arbitrator within twenty five (25) days
of the Arbitrator Notice, the arbitrator chosen by the other
Party shall serve as the sole arbitrator. If each Party
appoints an arbitrator, then either (a) the Parties will
mutually agree on a third arbitrator, or (b) if the Parties
cannot agree on a third arbitrator, each Party within thirty
(30) days of the Arbitrator Notice shall nominate five
candidates to serve as a third arbitrator. Each party may,
within thirty-five (35) days of the Arbitrator Notice,
strike two of the other Party's five candidates. The two
arbitrators chosen by the Parties shall then, within
forty-five (45) days of the Arbitrator Notice, agree upon
the selection of a third arbitrator from the list of
candidates identified by the Parties but not stricken. If
the arbitrators selected by the Parties are unable to agree
upon the third arbitrator, the third arbitrator shall be
selected from the same list of non-stricken candidates by
the American Arbitration Association. Any disputes as to the
qualifications of an arbitrator will be submitted to the
American Arbitration Association for resolution. The
arbitrator(s) shall hear and decide all Disputes arising
during his/her term of service. New arbitrators shall not be
required for different or serial Disputes arising during the
arbitrator's term. The provisions of R-18(a) of the
Commercial Arbitration Rules ("Communication with
Arbitrator") shall apply during the entire period of the
arbitrator(s)' appointment, irrespective of whether a
Dispute is pending.
ii. Unless both Parties agree after full disclosure, the
following shall not be eligible to serve as an arbitrator:
any employee or former employee of either Party, any person
who has served as an expert or counsel for either Party in
any proceeding, or any
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person with a financial interest in either Party; provided,
however, that indirect holdings of the stock of either Party
through a mutual fund shall not be a basis for
disqualification under this provision.
iii. All arbitrators once elected shall be considered to be
neutral arbitrators. The arbitrators may act on any matter
by majority vote. In the paragraphs that follow, references
to the arbitrator shall be deemed to mean, in the event of
the Parties' failure to agree upon a single arbitrator, the
three-member panel.
iv. The arbitrator shall serve a one-year term, renewable each
year upon agreement by the Parties. Any Party wishing to
replace the arbitrator shall give notice to the other Party
sixty (60) days before the anniversary of the arbitrator's
appointment. If a Party gives such notice, or if the
arbitrator becomes unavailable to continue serving for any
other reason, the Parties shall agree on a successor within
thirty (30) days of the notice or of learning of the
arbitrator's unavailability. If the Parties fail to agree to
a successor, they shall follow the procedures for selecting
a three-member panel described above.
v. In the event that a three-member arbitration panel is
chosen, the members shall serve for a one-year term. The
term of the arbitrator chosen by a Party may be renewed by
the choice of the Party who chose that arbitrator. The term
of the arbitrator chosen by the Parties' arbitrators may be
renewed by the agreement of the Parties. If an arbitrator
chosen by a Party requires replacement at any time, the
Party who chose that arbitrator will choose the replacement.
If the arbitrator chosen by the other two arbitrators
requires replacement, then that replacement shall be chosen
pursuant to the procedure set forth in Section 8(b)(i).
vi. Notwithstanding the provisions of subparts iv. and v. above,
an arbitrator's term shall be extended as necessary to
complete an arbitration begun before his/her term expired.
vii. Confidentiality. Except as may be required by law, neither a
Party nor an arbitrator may disclose the existence, content
or results of any arbitration hereunder without the prior
written consent of both Parties.
viii. Duration of Arbitration. The award shall be made within
three (3) months of the appointment of the arbitrator(s),
and the arbitrator(s) shall agree to comply with this
schedule before accepting appointment. The arbitrator shall
set deadlines or modify deadlines set in the AAA rules so as
to meet this deadline. In extraordinary cases, where the
arbitrator determines that the issues are so complex as to
preclude resolution within three (3) months, the arbitrator
may extend the period of the arbitration, but in no event
shall he/she extend the period so that the award is made
more than six (6) months from the service of the notice of
intention to arbitrate. These time limits may be extended by
agreement of the Parties.
ix. Locale. Unless otherwise agreed to by both Parties, the
arbitration shall take place in a neutral location in
Seattle, Washington.
x. Modification of Arbitration Rules. The Parties may modify
the rules applicable to any proceeding by mutual agreement.
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xi. The arbitrator shall hear and decide all Disputes arising
during the term of his/her service. New arbitrators shall
not be required for different or serial Disputes arising
during the arbirator's term.
xii. Liquidated Damages. The Parties agree that, for each breach
of any provision of Section 5, the prevailing Party in any
arbitration shall be awarded * as liquidated damages. For
the purposes of calculating liquidated damages, although a
single act may breach multiple provisions of this Agreement,
such act shall count as a single breach for purposes of
calculating liquidated damages. Damages shall begin to
accrue as of the date of receipt of a written Notice of
Arbitration. The arbitrator may, in his/her discretion,
adjust the time period over which the liquidated damages
will be assessed where the breach relates to the timeliness
of compliance with a provision of Section 5 and/or the
breach is one that, by its nature, cannot be cured. By
agreeing to liquidated damages, the Parties acknowledge that
(i) such liquidated damages are an integral part of the
transactions contemplated by this Agreement and constitute
liquidated damages and not a penalty, and (ii) such
liquidated damages are necessary because actual damages
arising from the loss of opportunity would not be
determinable with any degree of certainty.
If either Party fails to pay the liquidated damages once
determined by the arbitrator to be owing, the Party shall
pay the costs and fees, including reasonable attorneys' fees
and expenses, in connection with any action, including the
filing of any lawsuit or other legal action, taken to
enforce the arbitrator's award, together with interest on
the amount of any unpaid damages at the publicly announced
prime rate as reported in The Wall Street Journal from the
date such damages were required to be paid.
xiii. Cure by Posting to Windows Update. Each Party may cure any
breach of its obligations under Section 5 of this Agreement
through specific performance. In the case of Microsoft's
obligations pursuant to Section 5 to include software code
in Windows or to distribute software code with Windows,
Microsoft may cure any such breach by distributing such
software code through Microsoft's Windows Update service and
including any such software code in the next commercially
released version of Windows, provided, however, that
Microsoft shall only be required to make modifications to
any release of Windows if the scheduled release to
manufacture date is more than 120 days from the date of such
award. Liquidated damages shall cease to accrue as of the
date that Microsoft posts the required software code on
Windows Update; provided, however, that this Section shall
not preclude the arbitrator from reviewing the adequacy or
completeness of any attempted cure and from awarding
liquidated damages corresponding to the applicable period
until the Party successfully cures such breach. Microsoft
further agrees to work promptly and in good faith with Real
to identify a mechanism by which Real can effect
distribution of such Windows software code as a silent
download to Real's end users. For the purpose of this
Section, "silent download" shall mean a download and
subsequent installation that does not require user input or
confirmation and in which no messages are generated by the
Microsoft software during normal operation. Real shall
assure that its ▇▇▇▇ and the end user consent path is
appropriate for the distribution mechanism.
----------
* Confidential Treatment Requested
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xiv. Remedy. The only remedies for any Dispute arising out of
Section 5 of this Agreement shall be specific performance
and/or the award of liquidated damages pursuant to Section
8. Remedies imposed by the arbitrator shall be the sole and
exclusive remedy for a breach of Section 5. In the event
that the arbitrator awards specific performance that
requires software code to be included in or distributed with
Windows, that obligation shall be satisfied by posting any
such software code on Microsoft's Windows Update service and
including the software code in the next commercially
released version of Windows, provided, however, that
Microsoft shall not be required to make modifications to any
release of Windows if the scheduled release to manufacture
date is less than 120 days from the date of such award.
Liquidated damages shall cease to accrue as of the date that
Microsoft posts the required software code on Windows
Update. Nothing in this provision limits the ability of the
arbitrator to review the compliance of a Party with the
arbitrator's decisions.
xv. The arbitrator may not enjoin distribution of any Microsoft
or Real product or the provision of any Microsoft or Real
service based on the assertion of rights created by this
Agreement and the Parties expressly waive such relief.
xvi. Excusable Delay. If the arbitrator finds that any failure of
a Party to meet the obligations set forth in Section 5 of
this Agreement was the result of conditions or circumstances
that were not attributable to the actions or inactions of
that Party, the arbitrator may, in his/her discretion, elect
not to award liquidated damages.
xvii. Arbitration Costs. The prevailing Party, as determined by
the arbitrator(s), shall be awarded all reasonable costs and
fees of the arbitration contemplated by this Section
(including, without limitation, the arbitrator(s)' fees and
reasonable attorneys' fees).
xviii. Opinion. The award of the arbitrator(s) shall be
accompanied by a written reasoned opinion.
9. Notices: All notices in connection with this Agreement are deemed
given as of the day they are received either by messenger, delivery
service, or the United States of America mails, postage prepaid,
certified or registered, return receipt requested, and addressed as
follows:
If to Microsoft:
Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Real:
RealNetworks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to another address as a Party may designate under this notice
provision. In addition, notices sent by fax (with machine generated
confirmation of transmission) in accordance with the above are
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effective as of the date they are received so long as the Party
delivering the notice provides a second notice in accordance with the
other mechanisms above within five (5) days after the transmission of
the facsimile. The parties may change the persons to be notified upon
three (3) business days notice as provided in this Section.
10. Miscellaneous
a. This Agreement may not be changed, amended, modified, terminated,
waived or discharged except in writing by the Parties hereto.
Microsoft must enter into standard, reasonable and
non-discriminatory and fully paid up programmatic agreements with
Real as reasonably appropriate to implement the provisions of
this Agreement, provided that such agreements shall not impair or
otherwise diminish either of the Parties' express rights or
obligations hereunder. The applicable provisions of this
Agreement shall prevail in the event of any conflict with any
provision of such standard programmatic agreements or any
standard SDK agreements.
b. This Agreement may be executed in counterparts that, taken
together, will be effective as if they were a single document.
c. Neither this Agreement nor a Party's performance under this
Agreement shall be construed, interpreted, or used in any way as
an admission of the validity of any claims, causes of action,
lawsuits, liabilities, defenses, damages, costs, expenses,
attorneys' fees, amounts, rights, obligations, or any other
things of any nature whatsoever released pursuant to this
Agreement, nor as implying or establishing the validity thereof.
d. This Agreement is governed by the laws of the State of
Washington, excluding choice of law principles.
e. Any failure by any Party to this Agreement to insist upon the
strict performance by another Party of any of the provisions of
this Agreement shall not be deemed a waiver of any of the
provisions, and such Party, notwithstanding such failure, shall
have the right thereafter to insist upon the specific performance
of any and all of the provisions of this Agreement. There shall
be no estoppel against the enforcement of any provision of this
Agreement, except by written instruments executed by the Party
charged with the waiver of estoppel.
f. Each individual signing this Agreement warrants and represents
that he has the full authority and is duly authorized and
empowered to execute this Agreement on behalf of the Party for
which he signs.
g. Section 8(b)(xii) of this Agreement sets forth the dollar amount
that the prevailing Party in any arbitration shall be awarded per
day as liquidated damages. Such amount is referred to in this
Agreement as the "Liquidated Damages Amount". The Parties agree
that the Liquidated Damages Amount is competitively sensitive
information whose public disclosure would be harmful. The Parties
agree to keep confidential the Liquidated Damages Amount. The
Parties agree that Real will make a request for confidential
treatment of the Liquidated Damages Amount in connection with any
filing of this Agreement as an exhibit to any registration
statement or periodic report filed with the Securities and
Exchange Commission. The request for confidential treatment shall
be made in a manner consistent with the SEC's Staff Legal
Bulletin No. 1 "Confidential Treatment Requests" dated February
28, 1997 supplemented by an addendum dated July
10
11, 2001. The request will seek a confidentiality term until
October 11, 2015. Any confidentiality request shall be submitted
to and approved by Microsoft in advance of filing.
Notwithstanding the foregoing, nothing in this provision shall
prohibit disclosure of the Liquidated Damages Amount to the
Parties' attorneys and accountants or prohibit such disclosure as
may be required by law or regulatory inquiry, judicial process,
or order.
h. Except as expressly stated in this subsection (h), this Agreement
shall not confer any rights or remedies on any person or entity
other than the Parties and their Affiliates. This Agreement shall
be binding upon Microsoft and Real and their Affiliates and their
respective successors. This Agreement shall benefit Microsoft and
Real and their respective Affiliates and any person or entity to
whom assignment or transfer is expressly permitted under this
subsection (h). Except in connection with a Change of Control,
neither Party may assign or transfer this Agreement in whole or
in part except as provided in this subsection (h). Real or its
assignees may not directly or indirectly assign or transfer this
Agreement, or any rights or obligations hereunder, to Google or
Apple, or any Affiliate of Google or Apple ("Affiliate" status
for this purpose only being determined using a percentage of
interest threshold of 30% or greater), whether by operation of
contract, law or otherwise, except with the express written
consent of Microsoft (which consent may be withheld in
Microsoft's sole and arbitrary discretion). Any attempted
assignment by either Party in violation of this subsection (h)
will be void. In the event of an assignment or transfer relating
to a line of business, either Party may assign or transfer only
those sections of this Agreement as are directly related to the
line of business; provided, however, that the assigning Party
shall provide written notice of the Assignment to the other Party
specifying those sections of the Agreement to be assigned or
transferred. In no event shall the provisions of any subsection
of Exhibit D to Section 5 be jointly held by a Party and its
assignee(s). Any dispute about the scope of the assignment or
transfer shall be resolved pursuant to Section 8. Notwithstanding
the foregoing, in the event that Real assigns any commitment
regarding licenses granted pursuant to Section 5, Microsoft shall
have the right to consent to such assignment or transfer (which
consent shall not be unreasonably withheld). In the event that
Microsoft does not consent to such transfer, then the commitments
regarding licenses may still be assigned or transferred, but
following such assignment or transfer the licenses shall be
subject to payment of royalties. In the event that Real assigns
the right granted pursuant to Section 5 to require Microsoft to
proxy or redirect consumers using Windows to servers hosted by
RealNetworks, such assignment shall require Microsoft's consent
which consent shall not be unreasonably withheld. To the extent
the assignee of any right transferred by Real seeks to
subsequently assign that same right to another person or entity,
Microsoft shall have the right to consent to such assignment or
transfer (which consent shall not be unreasonably withheld).
i. Except for the obligations to make payments under this Agreement,
each Party shall be relieved of the obligations to the extent
that performance is delayed or prevented by any cause beyond its
reasonable control, including without limitation, acts of God,
public enemies, war, terrorism, civil disorder, fire, flood,
explosion, failure of communication facilities, labor disputes or
strikes or any acts or orders of any governmental authority.
j. The section headings used in this Agreement are intended for
reference purposes only and shall not affect the interpretation
of the Agreement.
11
k. If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid or unenforceable,
the remaining provisions shall remain in full force and effect.
This Agreement has been negotiated by the Parties and their
respective counsel and shall be interpreted fairly in accordance
with its terms and without any strict construction in favor of or
against either Party.
l. This Agreement shall amend and restate the Previous Agreement
(including the Amendment) in its entirety as of the Signing Date.
IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the Signing Date.
MICROSOFT CORPORATION REALNETWORKS, INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------- -------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name (print) Name (print)
Sr. Vice President, Legal and Business
Affairs, General Counsel and Corporate
General Counsel Secretary
Title Title
March 10, 2006 March 10, 2006
Date Date
12
EXHIBIT A
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
IN RE MICROSOFT CORP.
ANTITRUST LITIGATION MDL Docket No. 1332
This Document Relates To:
RealNetworks, Inc. v. Microsoft Corp., Hon. J. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Civil Action No. JFM-04-968
STIPULATION FOR DISMISSAL WITH PREJUDICE AND [PROPOSED] ORDER
Plaintiff RealNetworks, Inc. and Defendant Microsoft Corporation, through their
respective counsel of record, hereby stipulate to the voluntary dismissal, with
prejudice, of all claims in the above-captioned matter, pursuant to Federal Rule
of Civil Procedure 41(a)(1)(ii). Each party to bear its own costs and attorneys'
fees.
IT IS SO ORDERED.
Dated:
---------------
-----------------------------------------
The Honorable J. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
United States District Judge
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DATED: October _____ , 2005 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
BARTLIT ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
LLP
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 312-494-4440
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
THE SUMMIT LAW GROUP BARTLIT ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 8th Floor
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 303-592-3140
Of counsel:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Bar No. 05530)
Senior Vice President & General Counsel KRAMON & ▇▇▇▇▇▇, P.A.
▇▇▇▇▇ ▇▇▇▇▇▇▇ One South Street, Suite 2600
Vice President & Deputy General Counsel ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RealNetworks, Inc. Telephone: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Facsimile: 410-539-1269
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attorneys for Plaintiff,
REALNETWORKS, INC.
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DATED: October _____ , 2005 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attorneys for Defendant,
▇▇▇▇▇▇ ▇. ▇▇▇▇ MICROSOFT CORPORATION
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT B
[ON REAL NETWORKS LETTERHEAD]
Dear Sir/Madam:
On October 11, 2005, RealNetworks, Inc. and Microsoft Corporation entered into a
Settlement Agreement. We are providing you with this letter to inform you that
this Settlement Agreement resolves all three of the following legal matters:
(1) In the U.S.: the action captioned RealNetworks, Inc. v. Microsoft
Corp., Civil Action No. JFM-04-968, MDL Docket No. 1332, in the United
States District Court for the District of Maryland, originally filed
as Case No. C03-5717 (JW) (EAI), in the United States District Court
for the Northern District of California ("the U.S. Action");
(2) In the EU: Case COMP/C-3/37.792 that culminated in a decision of the
European Commission on March 24, 2004 ("the EU Decision"), Microsoft's
appeal from the EU Decision in the action captioned Microsoft v.
Commission of the European Communities, Case T-201/04, the appeal in
the action captioned Microsoft v. Commission of the European
Communities, Case T-313/05 and the complaint filed by third party CCIA
with the European Commission on February 11, 2003, including any other
filings concerning the appeal, implementation, or enforcement of the
EU Decision.
(3) In Korea: The proceedings identified as Case No. 2005 Kyungchok 0375,
Case Concerning Abuse of Market Dominant Position by Microsoft
Corporation and Microsoft Korea, Inc.
This letter constitutes RealNetworks' formal notice that, pursuant to the
Settlement Agreement, RealNetworks is (1) dismissing the U.S. Action with
prejudice, (2) withdrawing from the Actions in Europe, and (3) withdrawing from
the Action in Korea.
In the event you have any questions, please contact ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
RealNetworks' Senior Vice President and General Counsel, at ▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇ or
206.892.6121 or ▇▇▇▇▇ ▇▇▇▇▇▇▇, RealNetworks' Vice President and Deputy General
Counsel, at ▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇ or 206.892.6122.
Thank you for your cooperation.
Sincerely,
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President and General Counsel
RealNetworks, Inc.
EXHIBIT C
[ON REAL NETWORKS LETTERHEAD]
October 10, 2005
Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Senior Vice President, LCA
Re: Wire instructions for payment pursuant to Section 4 of
Settlement Agreement
Dear ▇▇▇▇:
I am providing you with the following wire transfer information pursuant to
Section 4 of the Settlement Agreement between RealNetworks, Inc. and Microsoft
Corporation. Real requests Microsoft split the $460 million payment pursuant to
Section 4 evenly and wire one-half to the following two accounts:
The Bank of New York
ABA: ▇▇▇▇▇▇▇▇▇
Account: 8900118377
BNF (Beneficiary): STIT Liquid Assets Portfolio
OBI (Other Beneficiary Information): FFC A/C 262212
RealNetworks Digital Music of California, Inc.
PNC Bank, Philadelphia, PA
ABA: 0310 000 53
Account: ▇▇-▇▇▇▇-▇▇▇▇
BNF: Mutual Funds Service
OBI: Temp Fund FFC A/C 27941 RealNetworks Digital
Music of California, Inc.
Microsoft has provided advance notice of the wire transfer, in accordance with
Section 4 of the agreement, which will take place on Tuesday, October 18, 2005.
In the event you have any questions, please contact ▇▇▇▇ ▇▇▇▇▇▇▇, Vice
President, Finance of RealNetworks. Eric's email address is ▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
and his office telephone number is ▇▇▇.▇▇▇.▇▇▇▇.
Thank you for your cooperation.
Sincerely,
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President and General Counsel
RealNetworks, Inc.
EXHIBIT D
TO THE SETTLEMENT AGREEMENT BETWEEN
MICROSOFT CORPORATION AND REALNETWORKS, INC.
WINDOWS TECHNOLOGY COMMITMENTS
1. DEFINITIONS
For the purposes of this Exhibit only, the parties agree that the following
terms shall have the meaning set forth below. All other terms shall have the
same meaning as in the Agreement of which this is an Exhibit.
1.1 "Commercially Practicable" means that after Microsoft enters into any
such non-exclusive agreement for the distribution, promotion, use or
support of any media experience software in Windows or related media
formats that it remains financially and technically feasible and
viable for such contracting OEM, ISV, IHV or content provider to enter
into an agreement with a third party to provide at least equal
distribution, promotion, use or support for software that competes
with such media experience software in Windows or related media
formats.
1.2 A "Bona Fide Joint Venture" means any joint development, joint
services or other similar commercial relationship entered into between
Microsoft and one or more parties pursuant to which a legally
recognizable new entity is formed in which Microsoft holds a
thirty-three percent (33%) or greater ownership and/or economic
interest, and which prohibits Microsoft and the other joint venture
partners from competing with the object of the joint venture for a
reasonable amount of time.
1.3 A "Bona Fide Joint Development or Joint Services Arrangement" means
any commercial agreement with any OEM, ISV, IHV, or content provider
for a brand new product, technology or service, or any material
value-add to an existing product, technology or service, in which both
Microsoft and the OEM, ISV, IHV, or content provider each contribute
significant developer and financial resources, and in which Microsoft
has roughly an equivalent financial interest in the investment in and
return from the agreement as the OEM, ISV, IHV, or content provider,
and that prohibits Microsoft and the other party from competing with
the object of the agreement for a reasonable amount of time.
Agreements that are in the nature of ordinary course of business
agreements for Microsoft shall not be considered "Bona Fide Joint
Development or Joint Services Arrangement."
1.4 "OCX" means the OLE Control Extension for the Windows Media Player, an
independent platform module for the Windows Media Player that can be
accessed by other software in a Windows operating system environment.
1.5 "Windows Server Technology" means Windows Server 2003 and Windows
Vista Server.
1.6 "Windows Server 2003" means the Windows Server 2003 Standard Edition,
Windows Server 2003 Enterprise Edition, Windows Server 2003 Data
Edition, versions of Microsoft's server operating systems, including
Service Packs and other updates or modifications to those products.
1.7 "Windows Vista Server" means the next major version of the Windows
server operating system to be released, which, when released, will
supersede the Windows Server 2003 Technologies and Service update
updates thereto as the Microsoft flagship server operating system,
including successors, upgrades, bug fixes, service packs released
during the term of this Agreement.
1.8 "Windows Vista" means the next major version of the Windows operating
system (including any Media Center Edition versions) to be released,
which, when released, will supersede Windows XP and Service Pack
updates thereto as the Microsoft flagship PC client operating system,
including upgrades, bug fixes, service packs released during the term
of this Agreement.
1.9 "Windows XP" means the Windows XP Home, Windows XP Professional, and
Windows XP Version of Media Center Edition versions of Windows
including Service Packs and other updates or modifications to those
products. Windows XP does not include Windows Vista or its successors.
1.10 "Windows" means, unless otherwise specified, Windows XP and Windows
Vista, as defined in this Exhibit, and successor versions of the same.
2. METADATA HANDLERS
2.1 No later than June 1, 2006, Microsoft shall provide Real with the
appropriate technical information for Real to develop Metadata
Handlers to be used to display metadata in the Windows shell in
Windows XP, Windows Vista, and successors. As used in this Exhibit,
"Metadata Handlers" means those metadata handlers that enable metadata
stored within the file types that Real supports and that are not
currently supported natively in Windows XP and Windows Vista and
successor versions (i.e., where Windows Vista does not include a
metadata handler for the relevant file type).
2.2 Microsoft shall establish a program to distribute such Metadata
Handlers with Windows XP, Windows Vista, and successors subject to
reasonable and nondiscriminatory technical criteria and licensing
requirements. The technical criteria shall be reasonably comparable to
the types of criteria that Microsoft requires printer drivers to
satisfy in order to be distributed with Windows XP. The licensing
requirements shall be substantially similar to those in Microsoft's
current, standard printer driver license except that Microsoft will
provide to Real a license to use and distribute without restriction
the "Microsoft Modifications" (as defined in such printer driver
license).
2.3 So long as Metadata Handlers developed by Real satisfy the technical
criteria and licensing requirements and are delivered by Real in a
timely fashion, Microsoft shall commence distribution of the Metadata
Handlers for both Windows Vista and Windows XP on Windows Update no
later than three (3) months after the release to manufacturing ("RTM")
of Windows Vista. In addition, Microsoft shall use commercially
reasonable efforts to commence distribution of such Metadata Handlers
on Windows Update on or around the same date as the commercial release
of Windows Vista. In the event that Microsoft has not established a
programmatic offering in time to provide Real the necessary technical
criteria and requirements, it shall nonetheless provide Real
sufficient information to enable Real to distribute Metadata Handlers
to Microsoft in time for Microsoft to distribute the Metadata Handlers
in the time frames described in this Section 2.3.
2.4 Microsoft shall distribute updates to the Real-supplied Metadata
Handlers in a reasonably comparable time and manner as Microsoft
distributes updates to printer drivers, such as including such
Metadata Handlers with Windows "in the box" and via Windows Update.
2.5 To the extent that installations of Windows Server Technologies are
configured to enable the Windows client shell functionality, to enable
local machine control of changes to machine state, and to enable the
automatic update and/or installation of software, such installations
will provide the same behavior relative to Real Metadata Handlers and
corresponding functionality as described in this Section 2, subject to
Section 10.
3. DISCOVERABILITY OF REAL CLIENT APPLICATIONS (FILE EXTENSIONS, MIME-TYPES,
PROTOCOLS)
Microsoft will improve access to Real media files via the Windows Vista (and
successor versions) shell and Internet Explorer by including functionality in
Windows Vista (and successor versions) that provides the following general
behavior:
3.1 When an end user actuates (such as by double-clicking, selecting and
hitting "enter," right-click "open,") on a proprietary Real media file
(as identified by filename extensions or MIME type or protocol, each
as identified by Real to Microsoft), and there is nothing on the
machine that is registered as having the capability to render the
content, the end user will be redirected through a reasonable user
experience designed to be simple and intuitive, directly to a mutually
acceptable Real web page (without rendering any intermediate Microsoft
web pages) that allows end users to download Real software to render
the file. Microsoft and Real both acknowledge that the goal is a clear
and seamless experience that provides the end user with the
opportunity to obtain software to play the selected file in a
streamlined manner, taking into account: (i) that each additional step
in the download process decreases download rates, contrary to the goal
of a seamless experience requiring as few clicks as possible, and (ii)
the need for end user notice and consent as part of the process.
Microsoft shall in good faith take into account the foregoing factors
in designing the user experience. Microsoft agrees to review with Real
the design of the experience during the design phase.
3.2 If any third party demands that Microsoft redirect users attempting to
play a proprietary Real media file to such third party's web site or
to a site that lists all third parties that have a right to playback
proprietary Real media formats, Microsoft will so inform Real or
direct such third party to Real. At its option, Real may choose to
host a webpage offering a list of certain third party applications for
which it has licensed Real media playback rights. Real will defend and
indemnify Microsoft against any claims brought by third parties based
on the fact that users seeking to play proprietary Real media files
are being redirected to Real.
4. FILE TYPE EXTENSIONS
4.1 Microsoft will not automatically change files registered on a user's
system that are associated with a Real application, except in
connection with a clean and complete installation of Windows or a
clean and complete re-installation of Windows where, in either case,
the Windows installation process sets file type registrations.
Microsoft will not query or prompt end users to change default
settings for media file types that Windows Media Player can playback
or manipulate and that it registers to handle unless and until Windows
Media Player is launched by direct end user action, such as by
double-clicking the Windows Media Player icon, from the start menu,
from the quick launch bar, or from a user-initiated install. Silent
installs of the Windows Media Player, such as what occurs during the
installation of a Windows service pack, a complete Windows upgrade
installation or an automatic installation from Windows Update, do not
constitute "direct end user action" as contemplated in the previous
sentence. Windows Media Player (starting in Windows Media Player 11)
will require affirmative end user action to cause the Windows Media
Player to change file type default settings. By way of example, a user
experience wherein the Windows Media Player changes file type default
settings merely by the end user hitting "enter" through one or more
dialog screens without taking any other actions is not "affirmative
end user action."
4.2 In addition, beginning with Windows Vista (and including successor
versions), if Windows has a control whose primary purpose is to set
user file type defaults, it will identify the current default
application and will offer consumers a clear and helpful dialog screen
presenting a choice of applications that can register as the default
player for media file types without presenting Microsoft's software in
a qualitatively different manner than third party software, and will
require an end user to affirmatively choose to change file type
default settings.
4.3 The operating system or Microsoft applications will never attempt to
claim Real proprietary media file types unless Real has specifically
licensed Microsoft technology or intellectually property rights to
play back such file types. The parties acknowledge that, as of the
Effective Date, Real has not granted such license to Microsoft.
4.4 In Windows XP SP2 (and any future versions of Windows XP), Windows
Vista, and successors, the Windows Autoplay feature is the mechanism
for end users to choose which software handles device insertion and to
select one software program as the future default handler for such
actions. In such versions of Windows, Autoplay defaults will not be
programmatically controllable by Windows (other than by the Autoplay
feature itself) or any application, and may only be changed by direct
end user action and choice. In such versions of Windows, the Autoplay
feature will have a mechanism that allows new software that registers
to handle device insertion to trigger the Autoplay dialog box to be
presented again the next time a device is inserted, even if a default
has previously been established by the user.
5. ACTIVEX CONTROL WARNINGS IN IE
Microsoft will include functionality in the Internet Explorer browsing
experience in Windows XP, Windows Vista and successors that provides the
following general behavior for running Active X controls embedded on a web page:
5.1 Microsoft will have a program involving reasonable and
nondiscriminatory terms that allows specific ActiveX controls code on
an end user's machine to be placed on a "safe" list, such that no
security warnings will be presented to the user when the ActiveX
control is running on an Internet web page; and
5.2 The program will provide, again on reasonable and nondiscriminatory
terms, a mechanism to remove ActiveX controls from such "safe" list in
the event of bona fide security issues.
5.3 For Windows Vista and successors, such functionality will be included
in the version of Internet Explorer included in the RTM of Windows
Vista. For Windows XP, such functionality shall be available with the
next release of Internet Explorer released after the RTM of Windows
Vista, to be released no later than three (3) months after the RTM of
Windows Vista.
To the extent that installations of Windows Server Technologies are configured
to enable the Windows client shell functionality and local machine control of
changes to machine state, such installations will provide the same behavior as
described in this Section 5 relative to the same versions of Internet Explorer,
subject to Section 10 and to the installation of the Windows Server Technology
being configured to enable the Windows client shell functionality.
6. ACTIVEX CLASS ID HANDLER
6.1 Microsoft will include functionality within Internet Explorer
(starting with the versions described in Section 5 above) that
provides the behavior described below when an end user renders a web
page that attempts to invoke a Real ActiveX control that is on the
"safe" list described in Section 5 but the control is not installed on
the end user's machine. Internet Explorer will enable:
(A) in the case of no 'codebase' attribute on the