GLOBAL MASTER AGREEMENT **CONFIDENTIAL**
Exhibit
10.47
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CONFIDENTIAL
TREATMENT
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REQUESTED
PURSUANT TO RULE 24b-2
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Certain
portions of this exhibit have been omitted pursuant to a request
for
confidential treatment under Rule 24b-2 of the Securities Exchange
Act of
1934. The omitted materials have been filed separately with the Securities
and Exchange Commission.
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**CONFIDENTIAL**
This
Global Master Agreement (“Agreement”)
is
made and entered into as of July 27, 2006 (the “Effective
Date”)
by and
between Apple Computer, Inc., a California corporation, located at 0 Xxxxxxxx
Xxxx, Xxxxxxxxx, XX 00000 (“Apple”),
and
Xxxxxxx.xxx, a Delaware corporation, located at 00 Xxxxxxxxxxx Xxxx, Xxxxx,
Xxx
Xxxxxx 00000 (“Audible”).
RECITALS
WHEREAS,
Audible
is the creator and provider of the Audible Service and other technologies to
support the sale, distribution and play-back of certain digital
audio;
WHEREAS,
Apple
is the developer and retailer of hardware and software used in the sale,
distribution and play-back of digital audio, which as of the Effective Date
includes the sale of iPods and distribution of media management software in
the
form of iTunes;
WHEREAS,
Audible
and Apple desire to undertake certain development work for the purpose of making
compatible and maintaining compatibility between certain hardware and software
offered by Apple and the Audible Service;
WHEREAS,
Audible
or its licensors control all rights to certain digital content, which Audible
makes available via the Audible Service;
WHEREAS,
Apple
has developed and controls a store where it markets, distributes and sells
certain digital content;
WHEREAS,
Audible
desires to license certain digital content to Apple for marketing, distribution
and sale through Apple’s store and Apple desires to accept such license;
and
WHEREAS,
Audible
and Apple desire to undertake the additional rights and obligations contained
herein to support and promote their products and services provided for
herein.
NOW THEREFORE,
in
consideration of the foregoing premises, the promises exchanged herein and
for
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, Audible and Apple, intending to be bound, agree to the
foregoing and as follows:
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
AGREEMENT
ARTICLE
1
GENERAL
1.1 Global
Relationship.
This
Agreement shall encompass the entire relationship between Audible and Apple
relating to the matters provided for hereunder and shall represent the terms
and
conditions under which Audible and Apple shall cooperate in their efforts to
further develop and promote the products and services provided for
hereunder.
1.2 Definitions.
Capitalized terms used herein shall have the meanings ascribed to them in the
body of this Agreement and/or in the attached Schedules, Exhibits, Attachments,
Addenda and other documents attached hereto, or as defined in Schedule
1.2.
1.3 Local
Agreements.
From
time to time, the Parties may mutually agree to execute local agreements (each,
a “Local
Agreement”)
to
provide for the performance of obligations hereunder for particular regions
or
localities (each, a “Local
Agreement Territory”),
provided, however that in any event the Parties hereto shall at all times remain
responsible and liable in all respects for the performance of their obligations
hereunder whether performed directly or by or through such Local Agreements.
Each Local Agreement entered into shall be attached hereto at Schedule
1.3.
The
Parties shall enter into Local Agreements to cover the Territories covered
by
the Prior Agreement and Japan.
1.4 Prior
Agreements.
That
certain Digital Download Sales Agreement dated September 17, 2003 by and between
the Parties hereto and that certain Software and Device Development and
Distribution Agreement dated June 4, 2002 (collectively, the “Prior
Agreements”)
are
hereby terminated in their entirety and replaced with this Agreement; provided,
however, all rights and obligations that would survive according to the survival
provisions or such agreements, shall so survive except and to the extent they
conflict with the terms and conditions of this Agreement. That certain Digital
Download Sales Agreement dated June, 2004 by and between Audible and iTunes
S.a.r.l. (the “European
Agreement”)
shall
survive as a Local Agreement hereunder in accordance with its
terms.
1.5 Conflicts
in Interpretation.
The
following order of precedence shall be followed in resolving any inconsistencies
between the terms of this Agreement and the terms of any Schedules, Exhibits,
Local Agreements, Addenda and other documents attached hereto: (a) first, the
terms contained in the body of this Agreement; (b) second, the terms of the
Schedules, Exhibits, Addenda and other documents to this Agreement, provided
that no order of precedence shall be applied among such Schedules, Exhibits,
Addenda and other documents; and (c) third, any Local Agreements as to the
applicable Local Agreement Territory.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-2-
ARTICLE
2
RELATIONSHIP
MANAGEMENT
2.1 Strategic
Managers.
As of
the Effective Date, each Party shall identify a senior executive within its
organization to act as the primary point of contact for each Party regarding
the
relationship hereunder and to establish and ensure the execution of a mutually
agreed to strategic plan by each Party (each, a “Strategic
Manager”).
As of
the Effective Date the Audible Strategic Manager shall be Xxx Xxxx and the
Apple
Strategic Manager shall be Xxxx Xxx. Each Party may replace its then-current
Strategic Manager with another executive within its organization holding
comparable executive position within its organization upon reasonable prior
written notice to the other Party.
(a) Meetings.
On the
dates and at the locations mutually agreed to by the Parties, and in any event
no less than quarterly, the Strategic Managers and other appropriate
representatives of the Parties and any necessary third parties shall meet at
a
mutually agreed to site or by telephone conference to discuss the status of
activities under this Agreement including any difficulties or issues that may
exist in executing or timely performance of each Party’s obligations
hereunder.
2.2 Marketing
Manager.
As of
the Effective Date, each Party shall identify a senior marketing executive,
whose primary job responsibility is marketing of spoken word audio products,
within its organization to act as the primary point of contact for each Party
regarding the marketing relationship hereunder (each, a “Marketing
Manager”).
The
applicable Marketing Managers shall develop and ensure the execution of a
mutually agreed to marketing plan, globally and, if mutually agreed, on a
territory-by-territory basis, by each Party and promptly respond to the other
Party with respect to all inquires hereunder. Each Marketing Manager shall
be
the primary point of contact for such Party for all rights, duties and
obligations provided for hereunder. Each Party may replace its then-current
Marketing Manager with another senior marketing executive within its
organization upon reasonable prior written notice to the other
Party.
(a) Meetings.
No less
than twice per month, the Marketing Managers and other appropriate
representatives of the Parties and any necessary third parties shall meet at
a
mutually agreed to site or by telephone conference to discuss the status of
activities under this Agreement including any difficulties or issues that may
exist in executing or timely performance of each Party’s obligations hereunder.
In addition, each meeting will cover other topics, including the creation of
new
marketing initiatives that leverage the assets and features of the Audible
Service and ITMS, on-going research/data sharing, as well as possible
co-marketing and co-branding coordination and sales initiatives.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-3-
ARTICLE
3
AUDIBLEREADY®
APPLE PRODUCTS
3.1 Development.
(a) Audible
Development Work.
Audible
will deliver the Deliverables to Apple to allow creation of the AudibleReady®
Apple Products and in accordance with the applicable Implementation Schedule
and
Audible Specifications (as defined below) (collectively, “Audible
Development Work”).
(i) Acceptance.
Any
Deliverables shall be subject to evaluation, testing and acceptance by Apple.
Apple shall, as soon as reasonably practicable following the receipt of a
Deliverable: (a) accept such Deliverable and inform Audible in writing of such
acceptance; or (b) reject such Deliverable and provide Audible with a written
statement detailing the Defect(s). In case of rejection, Audible will promptly
correct all Defects and redeliver the Deliverable as soon as reasonably
practicable. Apple shall, as soon as reasonably practicable after such
redelivery, accept or reject the Deliverable in accordance with the procedure
set forth herein. Such procedure shall be repeated until all of the Deliverables
are accepted by Apple; provided, however, in the event such procedure is
repeated [***] and no acceptance is achieved, the Parties shall mutually agree
upon another process towards the development of compliant Deliverables
hereunder. Apple shall provide a confirmation in writing to Audible of its
acceptance of the Deliverables.
(b) Apple
Development Work.
Upon
receipt and acceptance of the Deliverables, Apple shall promptly integrate
the
Deliverables with the Apple Products consistent with the AudibleReady®
Specifications to create the AudibleReady® Apple Products (the “Apple
Development Work”).
3.2 Testing.
Prior
to the commercial distribution of any AudibleReady® Apple Products, Apple will
perform appropriate testing (and mutually agree in writing to the completion
of
such testing) for proper device, software and system behavior when loaded or
used with Audible Content, as well as proper integration and interoperability
between the AudibleReady® Apple Products and the Audible Service. The Parties
shall cooperate with each other in good faith with regard to all such testing
and evaluation. Testing and acceptance of the Audible Development Work, Apple
Development Work and resulting AudibleReady® Apple Products shall occur in
accordance with such testing plan(s), procedures and schedule(s) as are mutually
agreed to by the Parties in writing. In the event Defects are discovered, each
Party shall correct and remediate the Defect(s). Neither Party shall
unreasonably withhold or delay its approval of the testing and the development
work.
3.3 Product
Currency; Updates, Non-Exclusivity, Ownership and
Costs.
(a) Product
Currency.
Audible
and Apple shall undertake Audible Development Work and Apple Development Work
so
that all Apple Products then currently made available for sale by Apple during
the Term satisfy the Audible Specifications, except as otherwise mutually agreed
to by the Parties in writing.
(b) Updates.
From
time to time during the Term Audible may develop Updates to Audible Software
and
the Audible Specification, in which case Audible and Apple Strategic Managers
shall promptly discuss the nature of such Updates and extent of Audible
Development Work and Apple Development Work required to update Apple Products.
[***].
(c) Independent
Development.
Any
Audible Development Work and Apple Development Work will be performed by the
applicable Party on a non-exclusive basis and shall not affect the right of
either Party to perform research, development and integration efforts for others
or on its own behalf with respect to the same or similar technologies as are
the
subject of this Agreement.
(d) Ownership.
Apple
shall retain all rights, title and interests in and to copyrights in Apple’s
pre-existing work and derivatives of Audible’s pre-existing work created solely
by Apple. Audible shall retain all rights, title and interests in and to
copyrights in Audible’s pre-existing work and derivatives of Apple’s
pre-existing work created solely by Audible.
(e) Costs.
Each
Party shall bear its own costs for its development efforts
hereunder.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-4-
3.4 Meetings;
Implementation Schedule; Cooperation; Project Managers.
The
Parties shall meet [***], subject to each Party’s confidentiality obligations
hereunder, to track progress in the development and launch of the AudibleReady®
Apple Products, including any and all Updates. For each development of
AudibleReady® Apple Products, including Updates, the Parties shall create a
mutually agreed upon, detailed and project-specific, written implementation
schedule (“Implementation
Schedule”)
for
the Audible Development Work and the Apple Development Work, which shall
include, as applicable: (a) identification of all milestone events; (b) the
commencement and completion dates for such milestones; (c) a detailed
description of all activities to be performed by each Party; (d) dates, times
and locations/telephone conferences for status meetings; and (e) a plan for
Testing consistent with Section
3.2.
Each
Party shall cooperate with the other in furtherance of their obligations under
this Article by providing reasonable access to the personnel, technology and
resources as are necessary or desirable to enable completion. Each Party will
provide a project manager to oversee completion of the Parties obligations
under
this Article.
3.5 Review.
From
time to time, each Party may request that the other Party promptly provide
an
update or status report on the development work being performed
hereunder.
3.6 Grant
of Licenses.
(a) License
to the Audible Software.
Audible
hereby grants to Apple a royalty-free, non-exclusive, non-transferable,
worldwide license to the Audible Software in object code and related
documentation: (i) to use, copy and modify the Audible Software solely for
development of the AudibleReady® Apple Products for use with the Audible Service
as provided for herein; (ii) to use, distribute and copy the Audible Software
to
provide the AudibleReady® Apple Products subject to an executed Software License
Agreement; and (iii) to use the Audible Software as part of the AudibleReady®
Apple Products to allow Apple to support the AudibleReady® Apple
Products.
(b) License
to the Apple Products.
Apple
hereby grants to Audible a royalty-free, non-exclusive, non-transferable,
worldwide license to the Apple Products and related documentation: (i) to use,
copy and modify the Apple Products solely for development of the Audible
Software for use with the Audible Service as provided for herein.
(c) License
to the Audible Patents.
Audible
hereby grants to Apple a royalty-free, non-exclusive license in all applicable
jurisdictions covered by the Patents to make, have made, manufacture, have
manufactured, use and have used the AudibleReady® Software using the Patents,
solely in connection with and as a part of the development, manufacture and
sale
of any Apple products so long as Apple and such products are not in violation
of
the terms and conditions of this Agreement.
(d) Proprietary
Notices.
Each
Party agrees that it will not (and it will not allow others to) alter or remove
any copyright, trade secret, proprietary markings, licenses and/or other legal
notices contained on or in copies of the intellectual property and any other
materials provided by one Party to the other.
(e) Ownership;
No Other Rights.
Except
as otherwise expressly provided herein, each Party will have and will at all
times retain all rights, title and interest (including, without limitation,
all
Intellectual Property Rights therein) in, to and under its products and
software. Except as expressly provided in this Agreement, no license under
any
patents, copyrights, trademarks, trade secrets or any other Intellectual
Property Rights, express or implied, are granted by either Party under this
Agreement. Notwithstanding the foregoing, any right not expressly granted to
Apple by this Agreement is hereby expressly reserved by Audible and any right
not expressly granted to Audible by this Agreement is hereby expressly reserved
by Apple.
3.7 [***]
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-5-
ARTICLE
4
CONTENT
4.1 Appointment
of Apple.
Subject
to the terms of this Agreement, Audible hereby appoints Apple as a reseller
of
eContent through ITMS and Apple accepts such appointment.
4.2 [***]
4.3 Terms
of Use.
Apple
shall condition sale and delivery of eContent upon an end user’s acknowledgement
of terms of use for such eContent (“Terms
of Use”),
which
Terms of Use shall be no less restrictive than the Content Usage Rules attached
hereto at Schedule
4.3.
4.4 [***]
4.5 Audio
Identification.
Audible
may include an Xxxxxxx.xxx in-line audio identification in each Content File
[***]. Apple shall not remove or alter any such audio identification in any
manner. An example of such in-line audio identification is set forth on
Schedule
4.5,
and any
audio identification shall follow its format with reasonable
particularity.
4.6 Parental
Advisory.
If
Audible provides a parental advisory warning in the Content File, Apple shall
conspicuously display such parental advisory. Audible shall be responsible
for
determining parental advisory warning status.
4.7 [***]
4.8 [***]
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-6-
ARTICLE
5
PROMOTION
5.1 General.
The
Parties recognize that it is in each Party’s best interest to prominently market
and promote the AudibleReady® Apple Products, ITMS, eContent, the Audible
Service and the AudibleListener® Program, to the public. During the Term, in
addition to each Party’s express obligations under this Agreement, the Parties
will use commercially reasonable efforts to create promotional programs designed
to market and promote the AudibleReady® Apple Products, ITMS, eContent, the
Audible Service and the AudibleListener® Program to the public. The Parties
shall undertake the activities provided for in Schedule
5.1.
5.2 ITMS
Branding.
Apple
shall include the language “Presented by Xxxxxxx.xxx” in the ITMS on so-called
“individual book pages” in a manner no less prominent than depicted in
Schedule
5.2
attached
hereto.
(a) Audible
Content and Cover Art Branding.
Apple
shall include an Xxxxxxx.xxx logo designation, supplied by Audible, affixed
to
the master server(s), and located on Apple’s facilities, which serve the Audible
Content and Cover Art.
5.3 [***]
5.4 Compatibility.
During
the Term, Apple Products shall be no less compatible with eContent and ITMS
than
as of the Effective Date.
5.5 Promotional
Materials.
During
the Term: (a) as reasonably requested by either Party, the Parties will
cooperate and work together to create marketing materials including, without
limitation, point of sale and/or other promotional materials, to be used in
the
marketing of the AudibleReady® Apple Products, ITMS, Audible Service, eContent
and AudibleListener® Program; and (b) each Party may create its own marketing
materials including, without limitation, point of sale and/or other promotional
materials, to be used in the marketing of the AudibleReady® Apple Products,
ITMS, Audible Service, eContent and AudibleListener® Program (collectively
“Joint
Promotional Materials”).
The
Joint Promotional Materials may include each or either Party’s Trademarks, as
applicable, pursuant to the terms of Article
6.
All
costs associated with the development, production and delivery of the Joint
Promotional Materials are the responsibility of the creating Party. To the
extent not provided for under the license grants provided herein, Audible shall
obtain Apple’s prior written consent prior to using Apple’s name in any
commercial setting; provided, however after obtaining Apple’s approval for any
such use of the Apple name, all identical and/or substantially similar future
use by Audible will be deemed approved by Apple and will not require any Apple
review.
5.6 Press
Release.
Except
as required under applicable law, neither Party shall make or issue any public
statement or press release regarding this Agreement or its subject matter
without the prior written approval of the other Party, however, despite the
foregoing, the Parties agree to issue a mutually agreeable joint press release
in relation to this Agreement promptly following the Effective
Date.
5.7 Conduct.
In
conducting all activities relating to this Agreement, the Parties agree not
to:
(a) knowingly conduct business in a manner that reflects unfavorably on the
business of the other Party; (b) employ deceptive, misleading or unethical
practices that are detrimental to the Parties, their products, and/or services;
(c) knowingly make any false, disparaging or misleading representations,
statements or comments with regard to the other Party’s products and/or
services; (d) knowingly publish or employ any misleading or deceptive
advertising material; and (e) make any representations, warranties or guaranties
to anyone on behalf of the other Party.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-7-
ARTICLE
6
TRADEMARKS
6.1 Ownership
and License Grant.
Except
for the limited use provided in this Agreement, each Party hereby agrees that
the use by it (“User”)
of any
Joint-Promotional Materials, trademarks, service marks, business names, trade
names, domain names, logos, designs, trade dress and/or copyrights
(“Trademarks”)
of the
other Party (“Owner”)
pursuant to rights granted under this Agreement will not create any right,
title
or interest, in or to the Owner’s Trademarks and that all goodwill associated
with the Owner’s Trademarks will belong to and inure to the benefit of the
Owner. The Owner hereby grants to the User a non-exclusive, limited,
non-transferable, non-sublicenseable (except as otherwise reasonably necessary
for User to perform its obligations hereunder), terminable license to use,
display, reference, show, demonstrate, distribute and reproduce the Trademarks
provided by the Owner during the Term solely for purpose of fulfilling the
User’s obligations under this Agreement and creating Joint Promotional
Materials, subject to the prior review and written approval of such uses by
the
Owner. Notwithstanding the foregoing, after obtaining the Owner’s approval for
any use of Owner’s Trademarks, all identical and/or substantially similar future
use of such Trademarks by User will be deemed approved by Owner and will not
require any Owner review.
6.2 Trademark
Restrictions.
User
covenants and agrees that during the Term, and at all times thereafter, it
will
not take any action or assist any third party: (a) in any action that impairs
or
may impair Owner’s ownership rights or dilute, tarnish or infringe the
Trademarks; (b) at any time dispute or contest, directly or indirectly, the
right and title to the Owner’s Trademarks or the validity thereof; or (c)
attempt to register or use any trademark, service xxxx, trade name, business
name, trade dress, domain name, copyright or logo similar to or that may cause
confusion with the Trademarks.
6.3 Quality
Control.
User
will at all times use the Trademarks pursuant to this Agreement and maintain
the
quality standards associated with the Trademarks. During the Term [***], Owner
will have the right at any time during its regular business hours to audit
User
in any manner reasonably determined by Owner as necessary to verify User’s
compliance with this Agreement and the maintenance of Owner’s quality standards
(“Inspection”).
User
agrees to comply fully with any such Inspection.
6.4 Proprietary
Notices.
Each
Party agrees that it will not (and it will not allow others to) alter or remove
any copyright, trade secret, proprietary markings, licenses and/or other legal
notices contained on or in copies of the Trademarks and any other materials
provided by one Party to the other.
6.5 Ownership;
No Other Rights.
Except
as otherwise expressly provided herein, each Party will have and will at all
times retain all rights, title and interest (including, without limitation,
all
Intellectual Property Rights therein) in, to and under its Trademarks. Except
as
expressly provided in this Agreement, no license under any Trademarks, express
or implied, are granted by either Party under this Agreement.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-8-
ARTICLE
7
PAYMENTS
7.1 Royalties
and Payments.
Audible
shall be responsible for and timely pay any and all royalties or payments to
authors, publishers and any other participants that may be required from sales
of eContent. Apple shall be responsible for and timely pay to Audible all sums
as required under this Agreement from the distribution of eContent.
7.2 [***]
7.3 Recordkeeping
and Audits.
Each
Party agrees to maintain and keep complete and accurate books and records
concerning all transactions provided for hereunder during the Term and for
a
period of two (2) years thereafter. Upon reasonable advance written notice,
but
not less than fourteen (I4) days, during the Term and for up to eighteen (18)
months thereafter (the “Audit Period”),
but
no more than once during any twelve-month period, each Party will permit the
other to appoint an independent certified public accountant not then engaged
in
any audit of either Party to audit applicable books and records at the audited
Party’s principal place of business, and at the auditing Party’s sole expense,
as necessary for the purpose of verifying the amounts due hereunder, during
regular business hours. The certified public accountant shall not be engaged
on
a contingency fee basis and must sign a confidentiality agreement that protects
each Party’s confidential information at least to the extent as this Agreement
and no less than each Party protects its own similar information. Each Party
may
audit information contained in a particular statement only once, and no audit
shall be allowed or conducted for any period lasting less than six (6) months.
Each Party agrees that the other Party’s books and records contain “Confidential
Information” (as defined below).
ARTICLE
8
DATA
PROTECTION
8.1 Security
Solution.
Apple
shall use the Security Solution on all eContent. [***]. At any time after either
Party becomes aware of a Security Breach, Audible shall have the right to
require Apple to immediately remove any or all eContent from distribution,
including distribution via ITMS. If the Security Breach is not cured during
the
Cure Period, then, upon Audible’s request, Apple shall suspend distributing
eContent until such time as the Security Breach is actually cured,
[***].
8.2 Unauthorized
Access.
Despite
anything to the contrary, in the event of a breach of the security to the
servers or network components that store Audible Content or Cover Art such
that
unauthorized access to Audible Content or Cover Art becomes available, then
(a)
Apple will prevent access to Audible Content via the ITMS and any distribution
methods owned or operated by Apple and disable distribution or display of
eContent and Cover Art within twenty-four (24) hours of Apple becoming aware
of
such security breach, and (b) the rights granted to Apple relating to the
marketing, distribution and sale of eContent and Cover Art under this Agreement
will be suspended, which shall be Audible’s sole remedy against Apple, provided
Apple complies with this Section. If the breach of security relating to the
servers or network components is not remedied within fifteen (I5) days after
such breach, Audible may terminate this Agreement on written notice to Apple
at
any time unless such security breach has been actually cured prior to
termination by Audible.
ARTICLE
9
TERM
AND TERMINATION
9.1 Term.
This
Agreement shall commence as of the Effective Date and continue until September
30, 2010 (“Initial
Term”).
This
Agreement will renew automatically for additional periods of one (1) year (each
a “Renewal
Term”)
unless
written notice is given by one Party to the other, at least [***] prior to
the
end of the Initial Term or any Renewal Term, of that Party’s intention not to
renew this Agreement. The “Term”
will
mean collectively the Initial Term and Renewal Term, if any. Each consecutive
twelve-month period following the Effective Date during the Term shall be
referred to herein as a “Contract
Year”.
9.2 Breach.
This
Agreement shall automatically terminate if either Party fails to perform any
of
the material terms, conditions, agreements or covenants in this Agreement and
such failure is not cured within [***] following receipt of a written notice
of
such failure from the Party seeking to terminate hereunder.
9.3 Automatic
Termination.
In
addition to all other rights or remedies provided for in this Agreement or
by
law, this Agreement will automatically terminate in the event: (a) a Party
makes
a general assignment for the benefit of creditors, (b) a Party admits in writing
its inability to pay debts as they mature, (c) a trustee, custodian or receiver
is appointed by any court with respect to a Party or any substantial part of
such Party’s assets, or (d) an action is taken by or against a Party under any
bankruptcy or insolvency laws or laws relating to the relief of debtors,
including the United States Bankruptcy Code and such action is not dismissed
within sixty (60) days of commencement of the action.
9.4 Continuing
Liability.
The
notification by either Party of its intent to terminate this Agreement and/or
the expiration of this Agreement, does not relieve either Party of any
obligations which have accrued under the terms and conditions of this Agreement,
inclusive of those terms and conditions which extend beyond the date of
termination.
9.5 Effect
of Termination.
(a) Upon
the
termination or expiration of this Agreement, all rights and licenses granted
under this Agreement will terminate; provided, however this Section and
Sections
3.3(d),
3.6(e),
6.5,
7.3,
9.4,
10.5,
14.7,
14.8,
14.10
and
14.11
and
Articles 11,
12
and
13 will
survive any expiration or termination of this Agreement.
(b) Expiration
or earlier termination of this Agreement shall not relieve Audible or Apple
of
its respective obligations to make any payments for the periods prior to such
expiration or termination (and the associated accounting) in accordance with
this Agreement.
(c) Apple
reserves the right to continue to provide first-rate customer support to
customers of the ITMS who purchased eContent during the Term, as it determines
in its discretion, after termination or expiration of this Agreement. Under
no
circumstances shall Apple intentionally disparage the Audible service, name
or
reputation in any manner at any time. For the avoidance of doubt, Apple shall
not engage in the sale, promotion or advertising of Audible Content, eContent,
Clips, Content Files, or Cover Art after the effective date of expiration or
earlier termination of this Agreement under any circumstance
whatsoever.
(d) Except
to
the extent reasonably necessary for the purpose under Section 9.5(c)
above
(subject to written approval by Audible, which approval shall not be
unreasonably withheld or delayed), upon the expiration or earlier termination
of
this Agreement, all Audible Content, eContent, Clips, Content Files, and Cover
Art shall be promptly deleted or destroyed and all Confidential Information
shall be returned to the disclosing Party, or destroyed.
(e) Upon
the
expiration or earlier termination of the Term, Apple shall immediately stop
selling eContent.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-9-
ARTICLE
10
REPRESENTATIONS
AND WARRANTIES
10.1 Authority.
Each
Party represents and warrants that it has full authority to enter into this
Agreement, and to fully perform its obligations hereunder.
10.2 Rights.
Each
Party represents and warrants that it owns or controls the necessary rights
in
order to make the grant of rights, licenses and permissions herein, and that
the
exercise of such rights shall not infringe or cause to infringe the rights
of
any third party.
10.3 Interference.
Each
Party represents and warrants that it shall not act in any manner which
conflicts or interferes with any existing commitment or obligation, and that
no
agreement previously entered into by such Party will interfere with such Party’s
performance of its obligations under this Agreement.
10.4 Compliance
with Laws.
Each
Party represents and warrants that it shall perform hereunder in compliance
with
any applicable laws, rules and regulations.
10.5 No
Other Warranties.
THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE, ARE THE ONLY
REPRESENTATIONS AND WARRANTIES MADE BY THE PARTIES HEREUNDER. EXCEPT AS
EXPRESSLY PROVIDED FOR HEREIN, EACH PARTY MAKES NO OTHER REPRESENTATION OR
WARRANTY, WHETHER EXPRESS OR IMPLIED, TO THE OTHER PARTY AND EXPRESSLY EXCLUDES
AND DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS OF ANY KIND, INCLUDING
ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE,
AND
NON-INFRINGEMENT.
ARTICLE
11
INDEMNIFICATION
11.1 By
Apple.
Apple
shall, at its expense, indemnify, defend and hold harmless Audible and its
Affiliates, officers, directors, shareholders, employees, agents and direct
or
indirect customers from any third party claim, suit, proceeding, liability,
settlement, costs, reasonable fees, and damages incurred arising out of or
in
connection with a claim (including attorney’s fees): (a) any use by Apple of the
Audible Content, eContent or Cover Art in breach of this Agreement; (b) any
claim that Apple Products provided by Apple hereunder infringes the Intellectual
Property Rights of another party; or (c) a breach of any warranty,
representation, covenant or obligation of Apple under this
Agreement.
11.2 By
Audible.
Audible
shall, at its expense, indemnify, defend and hold harmless Apple and its
Affiliates, officers, directors, shareholders, employees, agents and direct
or
indirect customers from any third party claim, suit, proceeding, liability,
settlement, costs, reasonable fees, and damages incurred arising out of or
in
connection with a claim (including attorney’s fees): (a) a breach of any
warranty, representation, covenant or obligation of Audible under this
Agreement; and (b) any claim that Deliverables, Audible Content or Cover Art
provided by Audible, or its permitted use, hereunder infringes the Intellectual
Property Rights of another party.
11.3 Indemnification
Procedures.
The
indemnified Party will: (a) promptly notify the indemnifying Party in writing
of
any such claim, suit and proceeding for which the indemnified Party is seeking
indemnity, provided, however, that failure to provide such notice will not
relieve the indemnifying Party from its liability or obligation hereunder,
except to the extent of any material prejudice as a direct result of such
failure; (b) reasonably cooperate with and assist the indemnifying Party, at
the
indemnifying Party’s expense, in the defense of such claim; and (c) give the
indemnifying Party authority to control the defense and settlement of any such
claim, except that the indemnifying Party will not enter into any settlement
that may adversely affect the indemnified Party’s rights or interest, without
the indemnified Party’s written approval, which approval will not be
unreasonably withheld or delayed. The indemnified Party will have no authority
to settle any claim without permission of the indemnifying Party.
ARTICLE
12
LIMITATION
OF LIABILITY
12.1 [***]
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-10-
ARTICLE
13
CONFIDENTIALITY
13.1 Obligations.
Each
Party may be given or may obtain access to non-public information (“Receiving
Party”)
of the
other Party (“Disclosing
Party”)
that
the Disclosing Party considers to be of a confidential, proprietary, or trade
secret nature, including, without limitation, software (in both source code
and
object code form), Customer Information, non-public intellectual property,
pricing, financial and operational information, business information, marketing
information, technologies, systems, processes, research, development, designs,
compilations, methods, techniques, procedures, inventions, ideas, data,
improvements, disclosures, patent applications, intellectual properties,
instruments, materials, products, patterns, works of authorship, compilations,
programs, techniques, circuits, schematics, sequences, designs, derivative
works, mask works, lists of names or classes of customers or personnel, skills
and compensation of employees and consultants, and know-how, in whatever form
or
media, whether or not marked as confidential (collectively, the “Confidential
Information”).
The
Receiving Party will: (a) maintain the confidentiality of the Confidential
Information of the Disclosing Party using a level of effort that will be no
less
than that used by the Receiving Party to protect its own confidential
information; and (b) not directly or indirectly disclose, copy, distribute,
republish or allow any third party to have access to any Confidential
Information of the Disclosing Party.
13.2 Exclusions.
The
Parties’ obligations under this Section will not apply to: (a) information that
is or becomes a matter of public knowledge through no fault of or action by
the
Receiving Party, (b) information that prior to disclosure was rightfully in
the
possession of the Receiving Party as a result of disclosure by a third party
under no obligation or restriction of confidentiality, (c) information that,
subsequent to disclosure, is rightfully obtained by the Receiving Party from
a
third party under no obligation or restriction of confidentiality, and (d)
information that is independently developed by the Receiving Party without
use,
knowledge or access to the Confidential Information of the Disclosing
Party.
13.3 Return
of Confidential Information.
Unless
otherwise authorized, upon the termination and/or expiration of this Agreement,
with respect to the Disclosing Party’s Confidential Information, the Receiving
Party will, at the direction of the Disclosing Party, promptly either: (a)
return such Confidential Information and provide certification to the Disclosing
Party that all such Confidential Information has been returned; or (b) destroy
such Confidential Information and provide certification to the Disclosing Party
that all such Confidential Information has been destroyed.
13.4 Notification
Obligation.
If the
Receiving Party becomes aware of any unauthorized use or disclosure of the
Confidential Information of the Disclosing Party, the Receiving Party will
promptly and fully notify the Disclosing Party of all facts known to the
Receiving Party concerning such unauthorized use or disclosure. In addition,
if
the Receiving Party is required to disclose the Disclosing Party’s Confidential
Information pursuant to a duly authorized order, the Receiving Party will
provide prompt written notice to the Disclosing Party of such order and will
cooperate with the Disclosing Party in all respects to obtain a protective
order
or other appropriate remedy and/or waive compliance with the provisions of
this
Agreement. Notwithstanding anything herein to the contrary, to the extent this
Agreement or other Confidential Information must be disclosed as a matter of
law
(e.g. as a material agreement in securities filings), such disclosure shall
be
permitted and each party shall cooperate with each other, prior to any such
disclosure, regarding such disclosure and any efforts or requests to limit
the
amount or extent of such disclosure.
13.5 Equitable
Relief.
The
Parties acknowledge that the disclosure of Confidential Information could cause
substantial harm to the Disclosing Party that may not be remedied by the payment
of damages alone. Accordingly, the Parties agree that the Disclosing Party
will
be entitled to seek to obtain preliminary and/or permanent injunctive relief
and
other equitable relief for any breach of this Section; provided, however, this
Section will not limit the Disclosing Party’s right to obtain any other relief
available to it pursuant to this Agreement, at equity or under law.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-11-
ARTICLE
14
MISCELLANEOUS
14.1 No
Agency or Joint Venture.
The
Parties agree and acknowledge that the relationship between the Parties is
that
of independent contractors acting as seller and purchaser. This Agreement shall
not be deemed to create a partnership or joint venture, and neither Party is
the
other’s agent, partner, employee, or representative.
14.2 Costs
of Performance.
Except
as expressly provided for herein, each Party shall be responsible for, and
pay
all costs associated with, the performance of its obligations under this
Agreement.
14.3 Export.
Apple
shall at its own expense obtain any and all licenses, consents or approvals
that
may, from time-to-time, be required by the United States Department of Commerce,
or by any other agency or department of the United States or other national
government, prior to undertaking any export or overseas distribution of
AudibleReadyTM
Apple
Products or derivative works thereof.
14.4 Subcontractors.
Apple
may contract with third parties to provide Fulfillment Activities on behalf
of
Apple, provided such third parties are subject to terms no less restrictive
than
the terms Apple is subject to under this Agreement, and who are able to perform
on behalf of Apple in a professional and workmanlike manner.
14.5 Entire
Agreement, Modification, Waiver.
This
Agreement, including any annexes, schedules and exhibits hereto, contains the
entire understanding of the Parties and relating to the subject matter hereof,
and supersedes all previous agreements or arrangements between the Parties
and
relating to the subject matter hereof. This Agreement cannot be changed or
modified except by a writing signed by the Parties. A waiver by either Party
of
any term or condition of this Agreement in any instance shall not be deemed
or
construed as a waiver of such term or condition for the future, or of any
subsequent breach thereof. Should any provision of this Agreement be determined
by a court of competent jurisdiction as unenforceable, such decision shall
not
affect any other provision hereof, and the enforceable provision shall be
replaced by an enforceable provision that most closely meets the commercial
intent of the Parties.
14.6 Assignment.
Audible
shall have the right to assign its rights and obligations under this Agreement
to any entity owning or acquiring all or substantially all of its stock or
assets unless such assignment would materially diminish or otherwise materially
adversely affect Apple’s rights under the Agreement.
14.7 Notices.
Any
notice, approval, request, authorization, direction or other communication
under
this Agreement shall be given in writing and shall be deemed to have been
delivered and given for all purposes: (i) on the delivery date if delivered
personally to the Party to whom the same is directed or delivered by
confirmed-receipt facsimile to the appropriate number set forth below; (ii)
upon
confirmed email or fax receipt (and telephone confirmation); (iii) one business
day after deposit with a commercial overnight carrier, with written verification
of receipt; or (iv) five business days after the mailing date, whether or not
actually received, if sent by certified mail, return receipt requested, postage
and charges prepaid, to the address of the Party to whom the same is directed
as
set forth below (or such other address as such other Party may supply by written
notice).
|
If
to Audible:
|
|
|
|
|
|
00
Xxxxxxxxxxx Xxxx.
|
|
|
Xxxxx,
XX 00000
|
|
|
Attn.:
Xxxxx Xxxxxxxx, EVP
|
|
|
Phone:
000 000-0000
|
|
|
|
|
|
with
a copy to (which copy shall not constitute notice):
|
|
|
|
|
|
To:
Xxxxxx Xxxxx,
|
|
|
VP
& Senior Counsel
|
|
|
(000)
000 0000; xxxxxx@xxxxxxx.xxx
|
|
|
|
|
|
If
to Apple:
|
|
|
|
|
|
Apple
Computer, Inc.
|
|
|
0
Xxxxxxxx Xxxx
|
|
|
Xxxxxxxxx,
XX 00000
|
|
|
Attn:
Xxxx Xxx, VP
|
|
|
Fax:
(000) 000-0000
|
|
|
|
|
|
with
a courtesy copy to (which copy shall not constitute
notice):
|
|
|
|
|
|
To:
Apple Associate General Counsel
|
Fax:
(000) 000-0000
|
|
|
|
14.8 Governing
Law.
This
Agreement shall be governed and interpreted in accordance with the laws of
the
State of California without regard to principles of conflict of laws. Each
Party
agrees that in the event it brings a proceeding against the other Party relating
to this Agreement, then such proceeding will take place in the jurisdiction
and
venue of such other Party’s principal place of business, e.g., No. District of
California being Apple’s principal place of business as of die date of this
Agreement, and New Jersey being Audible’s principal place of business as of the
date of this Agreement, and both Parties hereby waive any objection to personal
jurisdiction or venue in those forums, respectively.
14.9 Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same
document.
14.10 Remedies.
To the
extent permitted by applicable law, the rights and remedies of the Parties
provided under this Agreement are cumulative and in addition to any other rights
and remedies of the Parties at law or equity.
14.11 Headings.
The
titles used in this Agreement are for convenience only and are not to be
considered in construing or interpreting the Agreement.
IN
WITNESS WHEREOF,
the
Parties hereto have caused this Agreement to be duly executed by their
respective offices thereunto duly authorized.
|
APPLE
COMPUTER, INC.
|
AUDIBLE,
INC.
|
||
|
By:
|
/s/
Xxxx Xxx
|
By:
|
/s/
Xxxxxx X. Xxxx
|
|
|
|||
|
Name:
|
Xxxx
Xxx
|
Name:
|
Xxxxxx
X. Xxxx
|
|
Title:
|
VP
iTunes
|
Title:
|
Chairman
& CEO
|
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-12-
SCHEDULE
1.2
DEFINITIONS
“Acquired
Customer”
shall
mean: (a) a first time paying customer of Audible; (b) who is referred to
Audible’s website by Apple; (c) via a specific Uniform Resource Locator that
identifies Apple as the referring entity or via an Audible-approved media or
offer code or other Audible pre-approved method of tracking; and (d)
[***].
“A
La Carte Acquired Customer”
shall
mean: (a) a first time paying customer of Audible; (b) who is referred to
Audible’s website by Apple; and (c) via a specific Uniform Resource Locator that
identifies Apple as the referring entity or via an Audible-approved media or
offer code or other Audible pre-approved method of tracking.
“Affiliate”
means
any person or entity that is controlled by, under common control with or
controls a Party to this Agreement.
“Apple
Customer”
means
a
customer who accesses eContent from ITMS.
“Apple
Products”
means:
(a) iPod, and (b) iTunes.
“Audible
Content”
means
Content owned or controlled by, or licensed to, Audible, including Audible
originals, which Audible has the rights to provide through ITMS.
“AudibleListener®
Program”
means
the then-current Audible Service membership plans as defined at the Audible
Site.
“Audible
Service”
means
a
service that permits end users to access Audible Content for immediate play,
downloading, streaming and/or for storage and time-shifted playback (including,
without limitation via podcasting or other distribution/syndication methods):
(a) to an end user’s computer/server; (b) to an end user’s device; (c) from web
sites owned or controlled by Audible; and/or (d) from third-party digital
retailers (including but not limited to ITMS).
“Audible
Site”
means
Audible’s web site, which is currently located at xxx.xxxxxxx.xxx, and such
other sites and/or servers as may be used by Audible for the Audible
Service.
“Audible
Software”
means
Audible’s software that supports the Audible Service as provided by Audible to
Apple hereunder and any Updates thereto as commercially released or supported
by
or through Audible from time to time.
“Audible
Specifications”
means
the specifications for the creation of the AudibleReady® Apple Products that are
in use by Audible and Apple as of the Effective Date, as may be modified upon
the mutual agreement of the Parties.
“AudibleReady®
Apple Products”
means
the Apple Products in which the Deliverables have been integrated consistent
with the Audible Specifications and terms and conditions of this
Agreement.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-13-
“Content”
means
any audio content (and associated text, images, etc.) offered for sale and/or
revenue generating through the inclusion of advertising or sponsorships, other
than music, available anywhere in the world in any language, including without
limitation, audio versions of books, newspapers, magazines, television programs,
radio programs, speeches, debates, publications, stand-up comedy and
lectures.
“Content
File”
means
each digital file containing Audible Content, applicable Cover Art (if any),
parental advisory notices (if any), copyright notices (if any) and associated
meta data, e.g., author name, publisher name etc. (if any).
“Content
Usage Rules”
means
the usage rules applicable to recordings in the form of eContent available
on
the ITMS that specify the terms under which eContent may be used, as set forth
in Exhibit A attached hereto, which may be modified by Apple from time to time
(upon advance notice to Audible in the event of a material change to such usage
rules). If a modification expands the scope of use of eContent, then Audible
shall have the right in its sole discretion to cause Apple to remove any
specific eContent from the ITMS and/or terminate this Agreement on written
notice to Apple without cost or liability.
“Cover
Art”
means
book cover and any other artwork relating to Audible Content and that Audible
has rights to authorize Apple to use.
[***]
“Deliverables”
means
the Audible Software and the Documentation.
“Distribution
Territory”
means
the United States and its territories and Canada and its territories as well
as
any and all territories covered under the Local Agreement(s), which as of the
Effective Date shall be deemed to include all territories covered under the
Prior Agreements, the European Agreement and Japan.
“Documentation”
means
Audible’s documentation for the Audible Software.
“eContent”
means
Audible Content in digital form and having the Security Solution, which Apple
shall offer for sale on the ITMS pursuant to the terms and conditions of this
Agreement.
“End
User License Agreement”
means
the license agreement provided at the Audible Website that consumers, including
End Users, must accept and agree to prior to accessing and/or using the
Content.
“Intellectual
Property Rights”
means
any copyright, patent, registered design, mask works, trade xxxx, service xxxx,
application to register any of the aforementioned rights (as applicable), moral
rights, trade secrets, rights in know-how, and any other intellectual,
proprietary or industrial property rights of any nature whatsoever recognized
in
any part of the world.
“iPod”
means
the Apple portable digital hardware device as of the Effective Date known as
the
“iPod”, and subsequent version thereof, whether or not such device is branded
under the iPod name, and are marketed primarily for playing content
files.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-14-
“ITMS”
means
the digital content store currently marketed as the iTunes Music Store, an
electronic store and its storefronts owned, operated and controlled by Apple
and
subsequent versions of the iTunes Music Store.
“iTunes”
means
Apple’s digital jukebox software application known as of the Effective Date as
iTunes, for use with computers and iPods, and subsequent versions thereof
whether or not such application is branded under the iTunes name.
“Member”
means
an Apple Customer who is a participant in an AppleListener Program or any
successor or comparable program.
“Patents”
means
the following Audible patents and any related foreign filings: #5,926,624,
#6,170,060, #6,253,237, #6,158,005 and #6,560,651.
“Security
Solution”
means
Apple’s proprietary content protection system, as set forth in Schedule
A
attached
hereto, which may be modified by Apple from time to time (upon advance notice
to
Audible in the event of a material change to such content protection system).
If
a modification in Apple’s content protection system renders eContent less
protected than before such modification, Audible shall have the right in its
sole discretion to cause Apple to remove any specific eContent from the ITMS
and/or terminate this Agreement on written notice to Apple without cost or
liability.
“Software
License Agreement”
means
the license agreement that consumers must accept and agree to prior to accessing
and/or using the Content available at the Audible Site or eContent, in a form
substantially similar to that provided at the Audible Site.
“Territory”
means
worldwide.
“Updates”
new
or
modified hardware or software functionality to address new features, products,
enhancements, bug fixes and specific third-party requirements.
“Books
Content”
means
Content derived from books.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-15-
SCHEDULE
A
SECURITY
SOLUTION
[***]
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-16-
SCHEDULE
1.4
LOCAL
AGREEMENTS
[Documents
Attached Hereto]
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-17-
SCHEDULE
4.3
CONTENT
USAGE RULES
The
Content Usage Rules in existence as of the Effective Date. The parties shall
attach such Content Usage Rules following the Effective Date.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-18-
SCHEDULE
4.5
EXAMPLE
OF XXXXXXX.XXX IN-LINE AUDIO IDENTIFICATION
“This
audio program is presented by Xxxxxxx.xxx. Xxxxxxx.xxx: Audio that speaks to
you
wherever you are.”
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-19-
SCHEDULE
5.1
MARKETING
I. Meeting
The
parties shall convene a sales and merchandising summit at Apple’s Worldwide
Headquarters in Cupertino, California within two (2) months of the Effective
Date with senior sales and operational executives from both parties to discuss
and develop near, mid and long-term plans to maximize the sales and promotion
of
AudibleReady® Apple Products, ITMS, eContent, the AppleListener Program (if
any), the Audible Service and the AudibleListener® Program to the
public.
II. Marketing
[***]
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-20-
SCHEDULE
5.2
XXXXXXX.XXX
PROMOTION AT APPLE ITMS -
EXAMPLE
*The
bold
type
aspect of “Presented by Xxxxxxx.xxx” in this example shall be considered a part
of this Agreement.
[***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
-21-
