EXHIBIT 10.30
SOFTWARE RESELLER AGREEMENT
This Agreement is made and entered into effective as of August 9, 1998 (the
"Effective Date"), by and between Liquid Audio, Inc. ("LA"), a corporation
organized under the laws of the State of California, and Liquid Audio Japan
("Reseller"), a corporation organized under the laws of Japan. Capitalized terms
not otherwise defined shall have their meaning as set forth in Section 1 below.
WHEREAS, the Reseller desires to be appointed on an exclusive basis to
reproduce and resell Software Copies of the LA Software to End-Users in the
Licensed Territory;
WHEREAS, LA is willing to make such appointment in exchange for the
Reseller's payment obligations to LA hereunder, including certain minimum annual
payment commitments, and certain other promises, as set forth in this Agreement;
WHEREAS, the Reseller desires that the LA Software be localized for use in
the Licensed Territory, and LA is willing to cooperate with the Reseller to
cause certain Localized Versions of the LA Software to be developed; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereby agree as follows:
1. DEFINITIONS
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a. "Dealer-Reseller" shall mean any dealer, reseller or other
third party intermediary which (i) purchases Software Copies from Reseller for
resale solely to End-Users hereunder, and not for further resale and (ii) is
either a Subsidiary of Reseller or has been preapproved in writing by LA. All
Dealer-Resellers shall be identified in Exhibit C hereto, which shall be updated
by addenda thereto signed by both parties.
b. "Documentation" shall mean any instruction manuals or
documentation provided by LA with the LA Software.
c. "End-User" shall mean an end-user customer located within the
Licensed Territory who is licensed to use a Software Copy for its internal
purposes, and not for resale, redistribution, or any other purpose.
d. "End-User License Agreement" shall mean an end user license
agreement pursuant to which the Reseller licenses End-Users to use a Software
Copy, which shall (i) be in a form approved by LA that is at least as protective
of the Software Copy under applicable local law as LA's then-current standard
end user license agreement for the applicable LA Software, (ii) require the End-
Users to register their names and other appropriate information with Reseller as
a condition to obtaining the LA Software and (iii) require the End-Users to
register with LA's Liquid Operations Center before using the LA Software to
purchase downloadable digital music files.
e. "LA Software" shall mean the United States version of the
Liquid Audio software identified in Exhibit A hereto, and any Updates delivered
by LA to Reseller and any
Localized Versions prepared hereunder. LA may, at any time, amend Exhibit A to
add other software products which shall be available to Reseller under the terms
of this Agreement, and LA shall be under no obligation to continue the
production of any software product, and may delete any discontinued software
products from Exhibit A at any time upon written notice.
f. "LA Trade Secrets" shall mean certain know-how, techniques,
processes, methods, and other trade secrets that may be disclosed by LA to the
Reseller relating to the LA Software.
g. "LAJ Shareholder Agreement" shall mean that certain agreement to
be entered into by and among LA, Super Stage, Inc. and certain investors,
pursuant to which LA, Super Stage, Inc. and certain investors have agreed to
certain terms concerning the management of Reseller.
h. "License Term" means the term of this Agreement commencing upon the
Effective Date and expiring on [*] unless earlier terminated pursuant to the
terms of Section 10 below.
i. "Licensed Territory" means Japan.
j. "Localized Version" shall mean a version of the LA Software and
Documentation that has been localized for use in the Japanese language and has
been (i) requested in writing by the Reseller with a detailed description of the
desired localization changes, (ii) reasonably determined by LA to be
commercially feasible to develop and implement; and (iii) reasonably determined
by LA to constitute a necessary customization of the LA Software for use in the
Licensed Territory.
k. "Maintenance Services" means the sale of maintenance and support
services to End-Users, which may include distribution of Updates, in accordance
with LA's minimum requirements as set forth in Section 4(b) below.
l. "Purchase Price" shall mean the price to Reseller for each
Software Copy, calculated based on LA's then-current international retail list
price for the applicable LA Software or Maintenance Services, subject to the
applicable reseller discount set forth in Exhibit A.
m. "Sale" or "selling" of the LA Software or Software Copies shall
mean the sale of a license to use such LA Software or Software Copies. All
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references in this Agreement to the purchase, sale or distribution of LA
Software or Software Copies shall mean the purchase, sale or distribution of a
license to use such LA Software or Software Copy.
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n. "Software Copy" or "Software Copies" shall mean an object code
(machine-readable) copy or copies of the LA Software, together with a copy or
copies of any accompanying Documentation relating thereto that is designated by
LA for distribution to End-Users, along with all related materials required by
LA for distribution of finished goods, including without limitation, duplication
media, envelopes, labels, and packaging. All such copies shall be fixed on CD-
ROM, diskette or other tangible media, except as expressly permitted in Section
2(b) below.
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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o. "Subsidiaries" means all current and future business entities of
which the Reseller owns, directly or indirectly, at least fifty percent (50%) of
the equity securities or other equity interest granting voting rights
exercisable in electing the management of the entities, for so long as such
ownership exists.
p. "Update" means a release or version of the LA Software that is
generally made available at no additional cost to LA's end-user customers who
have purchased support and maintenance services from LA.
2. APPOINTMENT AND AUTHORITY OF RESELLER
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a. Appointment of Reseller. Subject to the terms and conditions set
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forth herein, LA hereby appoints Reseller to resell Software Copies of the LA
Software in the Licensed Territory, including related Maintenance Services, and
Reseller hereby accepts such appointment. Such appointment shall be on an
exclusive basis during the initial [*] of the License Term and shall remain on
an exclusive basis thereafter for the duration of the License Term, unless the
Minimum Annual Payment Obligations set forth in Section 6(e) are not fulfilled,
in which case such appointment shall automatically convert to a nonexclusive
basis. Reseller's sole remuneration for the distribution of the LA Software
shall be the difference between the Purchase Price for each Software Copy and
related Maintenance Services, and Reseller's price to its customers. As a
reseller, Reseller shall have the non-transferable, personal, revocable right
and license to reproduce Software Copies and to market, distribute and resell
such Software Copies to End-Users both directly and indirectly through a resale
network approved by LA of Dealer-Resellers in the Licensed Territory. All
proposed Dealer-Resellers must meet the criteria set forth in Section 1(a) above
and shall be identified in Exhibit C hereto. The Reseller shall contractually
obligate all Dealer-Resellers to comply with the terms of this Agreement, and
the Reseller further guarantees the performance of its Dealer-Resellers under
this Agreement and shall indemnify and hold LA harmless from and against all
losses, costs, liabilities and expenses arising out of or relating to any breach
or default by such Dealer-Resellers of this Agreement. All Software Copies
distributed by the Reseller will be accompanied by a copy of the End User
License Agreement, and the Reseller agrees to enforce the terms and conditions
of the End User License Agreement in the event of any violation by an End-User.
b. Territorial and Other Resale Restrictions. All End-Users shall
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have a ship-to address within the Licensed Territory and the End-User License
Agreement shall limit use of the LA Software to within the Licensed Territory.
The Reseller's marketing rights are expressly limited to the marketing of the LA
Software under approved LA Trademarks pursuant to Section 3 below. The
Reseller's distribution license is limited to distribution of Software Copies in
tangible packaged goods media, in the format(s) specified by LA, which may
include without limitation CD-ROM or diskette, and no right or license is
granted to distribute Software Copies via the Internet or any wide area network
(WAN) or otherwise in electronic media, except as stated in the following two
sentences. Reseller may permit downloading of the player software products
identified in Exhibit A from its own Web site, from the Web site of any Dealer-
Reseller, and from any other Web sites as may be approved by LA. Reseller may
distribute and permit the distribution by Dealer-Resellers of the server
software products identified in Exhibit A by FTP (file transfer protocol) to
End-Users with a billing address in the Licensed Territory who certify that they
reside in the Licensed Territory. In addition, the Reseller may not distribute
the LA Software on a bundled or value-added basis, or
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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through original equipment manufacturers without the prior written consent of
LA. The Reseller shall pursue aggressive sales policies and procedures to
realize the maximum sales potential for the Software Copies in the Licensed
Territory. The Reseller shall not advertise, market, distribute, sell, or ship
the Software Copies outside the Licensed Territory. The Reseller shall not sell
or distribute, or permit the sale or distribution by any party, of the LA
Software in any scheme being a lottery, as premiums, give-aways, close-outs, or
discounts, as bundled merchandise, or in conjunction with any co-branded or
other marketing arrangement not approved by LA, or for any other purposes not
expressly contemplated and permitted by this Agreement.
c. Additional Restrictions on the LA Software. Except to the extent
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permitted in Section 4(a) below with respect to Localized Versions, the Software
Copies may not be modified, translated or otherwise altered by the Reseller. The
Reseller agrees that it will not itself, or through any Subsidiary, affiliate or
other third party: (i) rent, lease, timeshare, or encumber the LA Software; (ii)
attempt to decompile, disassemble or reverse engineer the LA Software in whole
or in part, or otherwise attempt to derive the source code of the LA Software,
or take any other action in derogation of LA's or its suppliers' intellectual
property rights; (iii) market, distribute, sell, develop or cause to be
developed any derivative software or any other software program based upon or
competitive with the LA Software or any LA Trade Secrets or Confidential
Information of LA; or (iv) alter, encode, copy or transmit any audio or other
information using the LA Software without obtaining all necessary copyright and
other permissions, and Reseller will at its expense and indemnify LA and its
officers, directors, and employees against all liabilities, damages, claims,
fines and expenses arising out of any claim that Reseller has not obtained such
permissions.
x. Xxxxxx Master and Duplication Requirements. Upon receipt of the
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advance payment set forth in Section 6(b) below, LA shall deliver to Reseller,
one object code (machine-readable) golden master copy of the LA Software, along
with one (1) copy of the Documentation. Upon completion of any Localized
Versions, LA shall likewise deliver a golden master copy thereof to Reseller.
Reproduction of Software Copies by Reseller shall be solely for the purposes of
reselling such Software Copies pursuant to the terms of this Agreement, and
shall be subject to accounting and payment of the applicable Purchase Price for
all such Software Copies pursuant to Section 6 below. All Software Copies shall
be subject to LA's quality control and related requirements set forth in Section
2(e) below. The Software Copies may not be modified, translated or otherwise
altered by Reseller, and on each Software Copy the Reseller shall reproduce
without alteration, distortion or obfuscation all proprietary, confidential,
copyright or other notices of a similar nature that appear on or in the LA
Software in the same form and location as they appear in the original.
e. Quality Control. Reseller will perform duplication, labeling,
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packaging and all related activities that may be required by LA to prepare the
Software Copies for resale to End-Users. All such activities shall be performed
in accordance with LA's quality standards, as communicated to Reseller from time
to time, it being understood that in order to maintain the value and goodwill
associated with LA's Trademarks, all aspects of the Software Copies in finished
goods form will be subject to the approval of LA. LA will have the right to
monitor all aspects of the foregoing activities, and upon request at any time,
Reseller will provide LA with access to its manufacturing facilities, warehouse
and other facilities in order to perform quality control. Inventory levels of
Software Copies maintained by Reseller shall be subject to the review and
approval of LA. All
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subcontractors that may be used by Reseller hereunder shall be subject to the
prior written approval of LA. Reseller shall bear all costs and expenses in
connection with its obligations hereunder, except for those costs and expenses
incurred by LA in connection with its monitoring activities, including without
limitation, LA's traveling and lodging expenses.
f. Reservation of Rights. All rights not expressly granted hereunder
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are reserved by LA. This Agreement does not authorize or imply any rights other
than as expressly set forth herein. Without limiting the foregoing, LA reserves
the right under all of its intellectual property rights to make, have made,
develop, market, license, sell and distribute within the Licensed Territory any
software products other than the LA Software licensed for resale hereunder, to
distribute the LA Software in the Licensed Territory on a bundled or original
equipment manufacturer basis, and to distribute the LA Software in the Licensed
Territory via the Internet or any wide area network (WAN) or otherwise in
electronic media; provided that LA will not grant a license to any third party
to distribute the Localized Versions in the Licensed Territory via the Internet.
Subject to the foregoing, LA will report to Reseller the contact information for
any potential End-User customer located within the Licensed Territory that
contacts LA directly in regard to the purchase of Software Copies.
g. Other Reseller Activities. In the event that Reseller contemplates
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entering into operational activities (other than resale or distribution of the
LA Software and Maintenance Services), partnering with third parties with
respect to the same, or receiving revenues from transactions that are enabled by
the LA Software, LA agrees to negotiate in good faith with Reseller to establish
such operations, if such operations are mutually agreed, under terms to be
negotiated at the appropriate time. Notwithstanding the foregoing, LA reserves
the right not to negotiate contracts with Reseller for these types of
relationships, if LA, in its sole business discretion, concludes that such
activities would materially affect the core reseller operation of Reseller in an
adverse manner, and LA shall have no liability to Reseller hereunder whatsoever
in the event LA fails to enter into or negotiate any such contract with
Reseller. In addition, Reseller acknowledges that this Agreement is subject to
termination by Reseller pursuant to Section 10 in the event that Reseller
engages in any such operational activities without the prior written consent of
LA.
h. Ownership. LA retains ownership of the LA Software and all right,
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title and interest therein. The Reseller acknowledges and agrees that it is
acquiring only a limited right to resell certain Software Copies the LA Software
hereunder. All patents, copyrights, trade secrets and other intellectual
property rights in and to the LA Software shall remain the exclusive property of
LA or its suppliers.
3. TRADEMARKS AND TRADE NAMES.
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a. Right to Use. During the term of this Agreement, the Reseller
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shall have the right and shall be required to indicate to the public within the
Licensed Territory that it is an authorized reseller of the LA Software and to
operates is business under the name "Liquid Audio Japan," and shall have the
right and shall be required to market and advertise the LA Software under the
"Liquid Audio" trade name, and any other trademarks, marks, and trade names that
LA may approve for use in connection therewith in the Licensed Territory
(collectively, "LA's Trademarks").
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All rights to use LA's trade names are granted solely to the extent such trade
names are legally protectible in the Licensed Territory. Notwithstanding the
foregoing, any use of LA's Trademarks on Web sites or other postings on the
Internet or in other electronic transmissions via computer networks shall be
subject to the prior written approval of LA. The Reseller shall not use LA's
Trademarks, or any other copyright, trademark, logo or other right of LA in any
manner contrary to public morals, in any manner which is deceptive or
misleading, which is derogatory to LA's Trademarks, or which compromises or
reflects unfavorably upon the goodwill, good name, reputation or image of LA or
LA's Trademarks, or which might jeopardize or limit LA's proprietary interest in
LA's Trademarks. Any such misuse will give rise to LA's rights for immediate
termination of this Agreement. Nothing herein shall grant to the Reseller any
right, title or interest in LA's Trademarks. All uses of LA's Trademarks
hereunder by the Reseller shall inure solely to the benefit of LA. At no time
during or after the term of this Agreement shall the Reseller challenge or
assist other to challenge LA's Trademarks or the registration thereof or attempt
to register any trademarks, marks or trade names confusingly similar to those of
LA.
b. Approval of Representations. All representations of LA's
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Trademarks that the Reseller intends to use shall first be submitted to LA for
approval in writing (which shall not be unreasonably withheld) of design, color,
and other details or shall be exact copies of those used by LA. The Reseller
shall not use any of LA's Trademarks in conjunction with another trademark on or
in relation to any other software without LA's prior written approval. All uses
shall be subject to approval by LA to ensure that the LA's Trademarks are not
used by the Reseller in a manner that is unintended by LA, and notwithstanding
any approval by LA, the Reseller is responsible for the contents of such
advertising and compliance with all laws and regulations within the Licensed
Territory relating thereto.
c. Registered User Agreements. LA and the Reseller shall enter into
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registered user agreements with respect to LA's Trademarks to the extent now or
hereafter required, if at all, by applicable trademark law requirements in the
Licensed Territory. The Reseller shall be responsible for proper filing of the
registered user agreements, if any, with government authorities within the
Licensed Territory and shall pay all costs or fees associated with such filings.
d. Infringement Actions. Reseller shall cooperate with LA in all
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respects at LA's reasonable request in connection with any action or proceeding
prosecuted by LA involving LA's Trademarks or other intellectual property
rights. Reseller shall promptly notify LA of any such infringements or any acts
of unfair competition by third parties that come to Reseller's attention. LA
shall have the exclusive right, exercisable at its discretion, to institute in
its own name and/or Reseller's name and to control, all actions against third
parties relating to LA's Trademarks, and other intellectual property rights, at
LA's expense. With respect to any such actions, LA shall employ counsel of its
own choice to direct the handling of the litigation and any settlement thereof.
LA shall be entitled to receive and retain all amounts awarded, if any, as
damages, profits or otherwise in connection with such suits handled by LA.
Reseller shall not, without LA's prior written consent, institute any suit or
take any action on account of such infringements, acts of unfair competition or
unauthorized uses. LA's consent shall not be unreasonably withheld with respect
to any infringement of rights licensed on an exclusive basis hereunder, and LA's
consent may be withheld in its sole discretion with respect to any infringement
of rights licensed on a non-exclusive basis hereunder. LA shall endeavor to
provide Reseller with notice of its consent or lack thereof on
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an expedited basis in the event of an emergency that requires Reseller to seek
immediate relief in order to prevent further infringement of rights licensed on
an exclusive basis hereunder. If, with LA's consent, Reseller institutes, at its
sole cost and expense, such a suit or action, the handling of the litigation and
any settlement thereof shall remain subject to LA's approval, which shall not be
unreasonably withheld. Reseller shall be entitled to recover all reasonable
costs and expenses incurred in any such suit or action handled by Reseller from
any financial recovery awarded or obtained, and the damages Reseller incurred,
to the extent compensatory damages were awarded therefor, and the remainder
shall be retained by LA. LA shall incur no liability to Reseller by reason of
LA's failure or refusal to prosecute or by LA's refusal to permit Reseller to
prosecute, any alleged infringement by third parties, nor by reason of any
settlement to which LA may agree.
4. LOCALIZED VERSIONS AND MAINTENANCE SERVICES.
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a. Localized Versions. LA will cooperate with Reseller to develop
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Localized Versions pursuant to the terms of this Section 4(a); provided that all
matters relating to the Localized Versions shall remain subject to the final
approval and control of LA. LA will prepare a schedule of the processes to be
accomplished in creating the Localized Versions and will allow Reseller to
participate in the development of the Localized Versions where this
participation is acceptable to LA in its sole discretion. In the event that the
Reseller desires the development of a Localized Version, the Reseller will
submit a localization request to LA that contains a detailed description of the
desired localization, and LA shall evaluate the request and determine whether
the requested localization meets the criteria for a Localized Version as set
forth in Section 1(j) above. If LA reasonably determines that the requested
localization meets the requirements set forth in Section 1(j) above, LA will
cooperate with Reseller to develop the requested localization, which cooperation
may include without limitation (i) using reasonable commercial efforts to
perform any source code modifications that LA determines are necessary for the
Localized Version, (ii) providing any application programming interfaces that LA
determines are necessary for Reseller to complete the Localized Version, and
(iii) providing any other reasonable assistance that LA determines is necessary
for Reseller to complete the Localized Version. LA shall have no liability to
the Reseller in the event that completion of any Localized Version is delayed
for any reason or abandoned due to technical difficulties after a reasonable
level of sustained diligent efforts by LA's personnel. LA's obligations
hereunder with respect to Localized Versions shall continue during the License
Term so long as Reseller's right to resell the LA Software under Section 2 is
exclusive within the Licensed Territory. The Reseller shall bear all costs
associated with the development and on-going production of the Localized
Versions. Development costs shall include without limitation the development
services of LA valued on "cost-plus" basis (i.e., time and materials with time
being computed based on fully-burdened labor costs of the dedicated personnel
plus fifteen percent 15% of the total). On-going production costs include
without limitation the cost of creation and production of any physical media or
materials that are distributed as part of the Localized Versions, including
without limitation, manuals, diskettes, labels and boxes required for the
Software Copies in finished goods form pursuant to Section 2(d) above. In the
event that the Reseller prepares any Japanese-language translations or interface
modification designs necessary for such localization, the Reseller will be
solely responsible for, and shall ensure the accuracy and correctness, of all
such Japanese-language translations and interface modification designs provided
by the Reseller. The scope of the initial Localized Version to be developed
hereunder is set forth in Exhibit D, and the parties intend to
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collaborate on the specifications for the development of such initial Localized
Version within a reasonable period following execution of this Agreement.
b. Updates and Maintenance Services. LA will deliver to the Reseller
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any Updates to the LA Software on a periodic basis consistent with LA's general
release practices to its customers. Updates may be resold by Reseller as stand-
alone Updates or as part of Maintenance Services. The Reseller will be
responsible for all front-line maintenance and support for the LA Software for
all End-User customers that purchase Maintenance Services from Reseller, and
Reseller and will ensure a minimum level of support to End-Users consistent with
LA's then-current maintenance services agreement, and the goodwill and
reputation associated with LA's Trademarks.
c. Ownership Rights. All Updates and Localized Versions are included
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in the LA Software licensed to the Reseller hereunder, and LA will own all
right, title and interest in and to the Localized Versions and Updates, all
specifications, designs, inventions, and all related work product in all stages
of development ("Work Product"), including without limitation all translations,
interfaces and other contributions by the Reseller hereunder, and all copyrights
and other intellectual property rights therein and thereto. The Reseller hereby
forever and irrevocably assigns and transfers to LA all right, title and
interest in and to the Work Product, including without limitation, all
copyrights, patents, trade secrets and other intellectual property rights
therein and thereto, and LA shall have the exclusive right to file patents and
other intellectual property registrations with respect thereto. All Updates and
Localized Versions are provided on an AS-IS basis. LA cannot guarantee that
program error reported by the Reseller relating to the LA Software will be
corrected.
d. Cooperation by the Reseller. In order to facilitate prompt and
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efficient completion of any Localization Versions hereunder, the Reseller and
its personnel are required to cooperate fully with LA and its personnel in all
respects, including without limitation providing information as to customer
requirements, and providing access to (i) all necessary information relating to
any localization request as requested by LA, (ii) Reseller's software systems
and facilities; and (iii) officers and other personnel of the Reseller.
5. ADDITIONAL OBLIGATIONS OF THE RESELLER.
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a. Reseller Reports. The Reseller agrees to provide LA with a
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quarterly resale and inventory report for itself and for each Dealer-Reseller,
showing, at a minimum, the number of Software Copies of the LA Software
duplicated and/or distributed during each calendar quarter, and the End-Users'
names and addresses, and the quarter-end inventory position on hand. This report
must be forwarded to LA within forty-five (45) days after the close of each
calendar quarter.
b. Promotional Activities. The parties shall mutually agree on
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promotional activities that Reseller will perform to assist LA in developing its
brand identity in the Licensed Territory. At minimum, the Reseller shall, at its
own expense, actively promote the distribution of the LA Software, including
advertising in trade and other appropriate publications within the Licensed
Territory, and participating in appropriate trade shows, seminars, and joint
marketing programs with applicable marketing partners as may be designated or
approved by LA.
c. Finances and Personnel. The Reseller shall maintain a net worth
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and working capital sufficient, in Reseller's reasonable judgment, to enable the
Reseller to use its best efforts to
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perform fully and faithfully its obligations under this Agreement. The Reseller
shall devote sufficient financial resources and technically qualified sales and
service personnel to the LA Software to fulfill its responsibilities under this
Agreement, including without limitation its Minimum Annual Payment Obligations
set forth in Section 6(c) below.
d. Customer Relations. The Reseller shall, at its own expense (i)
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provide adequate contact with existing and potential End-Users within the
Licensed Territory on a regular basis, consistent with good business practice;
(ii) assist LA in assessing customer requirements for the LA Software, including
modifications and improvements thereto, in terms of quality, design, functional
capability, and other features; (iii) submit market research information, as
reasonably requested by LA, regarding customer feedback, competition and changes
in the market within the Licensed Territory; and (iv) promote the use of the LA
Software in the major recording industry corporate accounts market segments; and
develop and serve major recording industry corporate accounts.
e. Standard of Business Practices. The Reseller shall establish and
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maintain, and shall cause its Dealer-Resellers, employees, consultants and
agents to establish and maintain a high standard of ethical business practices
in connection with its appointment to resell the LA Software hereunder in the
Licensed Territory, including, without limitation, full compliance with Sections
11(o) and (p) below. The Reseller shall comply with all laws and regulations
relating or pertaining to the distribution, sale, advertising or use of the LA
Software in the Licensed Territory, and shall comply with the regulations and
directives of any regulatory agencies which shall have jurisdiction over the LA
Software.
f. Representations of Reseller. The Reseller represents and warrants
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on a continuous basis that it is a corporation duly organized and validly
existing under the laws of the country of organization first set forth above; it
has full right, power and authority to enter into this Agreement and to perform
all of its obligation hereunder; its execution, delivery and performance of this
Agreement have been duly and properly authorized by all necessary actions and
this Agreement constitutes its valid and binding obligation, enforceable against
it in accordance with its terms; and its execution, delivery and performance of
this Agreement will not, with or without the giving of notice or passage of
time, or both, conflict with, or result in a default or loss of rights under,
any provision of its Articles of Incorporation, By-Laws or other organizational
documents or any other agreement to which it is a party.
g. Intellectual Property Registrations and Government Approvals. LA
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shall be responsible for obtaining any copyright, trademark or other
intellectual property rights protection, in LA's name, for the LA Software in
the Licensed Territory. The Reseller shall promptly notify LA in writing of, and
shall be responsible for obtaining, any necessary government approvals that may
be required with respect to this Agreement. LA shall be responsible for all fees
or expenses incurred in connection with such intellectual property registrations
or filings other than registered trademark user filings pursuant to Section 3
above, if any. The Reseller shall be responsible for all fees or expenses
incurred in connection with obtaining any necessary government approvals with
respect to this Agreement.
6. TERMS OF PURCHASE BY RESELLER
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a. Payment Terms. All payments due hereunder shall be made in United
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States Dollars, and the Reseller shall be solely responsible for all costs of
any currency conversion to United States Dollars, and such costs shall not
reduce the amounts due to LA hereunder. All payments required hereunder shall be
made by wire transfer to the account of LA, or in accordance with such other
instructions as LA may from time to time provide to the Reseller. All payments
hereunder shall be made without set-off of any amount whatsoever, whether based
upon any claimed debt or liability of LA to the Reseller. Any past due amounts
shall bear interest at the lesser of 1.5 percent per month or the maximum rate
permitted by applicable law. To secure payments hereunder, LA hereby retains and
Reseller hereby grants to LA a security interest in the LA Software inventory
duplicated by Reseller and all proceeds therefrom. Reseller agrees to promptly
execute documents requested by LA to perfect and protect such security interest.
Reseller shall pay all of LA's costs and expenses (including reasonable
attorneys' fees) to enforce LA's rights under this Subsection 6(a).
b. Initial Advance Payment. Upon execution of this Agreement,
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Reseller shall make payment to LA in the amount of [*] which amount shall
constitute a nonrefundable advance payment for the Purchase Price for an initial
inventory of Software Copies to be duplicated by the Reseller hereunder. The
composition of this initial inventory shall be mutually agreed upon by the
parties.
c. Minimum Annual Payment Obligations. The Reseller shall guarantee
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and pay to LA the minimum, nonrefundable, guaranteed amounts during each Annual
Period from resale of Software Copies hereunder (the "Minimum Annual Payment
Obligations") as set forth in Exhibit B hereto. As used herein, "Annual Period"
means the twelve (12) month calendar year period commencing on January 1, 1999,,
and each subsequent twelve-month period thereafter during the License Term.
Payments for Software Copies made in any given Annual Period that are in excess
of the required annual minimum may not be carried backward or forward to meet
the required annual minimums for any other Annual Period. The Minimum Annual
Payment Obligations may only be fulfilled by payment duly made to LA based on
Software Copies resold hereunder during the applicable Annual Period. In the
event that Reseller fails to meet the Minimum Annual Payment Obligation for any
Annual Period, Reseller's appointment shall be automatically converted to a
nonexclusive basis upon the commencement of the next Annual Period.
d. Taxes. In addition to the Purchase Price and other charges
-----
specified above, the Reseller shall pay directly any and all taxes, imposts,
duties or similar charges, including without limitation, sales, use, ad valorem,
value added, franchise, withholding or other taxes, duties, imposts or charges
that may be imposed by any jurisdiction in connection with any of the amounts
payable by the Reseller to LA hereunder, however designated or levied, it being
understood that the amounts payable hereunder are net amounts and may not be
reduced or deducted from with any taxes, duties, imposts or other charges. The
Reseller shall indemnify and hold LA forever harmless from, all such taxes,
customs, duties, levies, impost or any other charges now or hereafter imposed,
including without limitation any penalties, interest or other assessments that
may be incurred due to failure, delay or errors by the Reseller in reporting or
payment thereof.
e. Statements. With respect to all Software Copies duplicated by or
----------
for the Reseller pursuant to Section 2 above, within forty-five (45) days after
the end of each quarterly period during the License Term (commencing with the
first quarter-end during the first Annual
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
10
Period), the Reseller shall deliver to LA a written statement setting forth an
itemized report for the preceding quarterly period, together with full payment
of the Purchase Price for all Software Copies resold during such period. Each
statement shall contain information on the number and type of Software Copies
duplicated by Reseller, the number and type of such Software Copies held in
inventory, and the number and type resold by Reseller during the applicable
period, names and other information collected by Reseller from End-Users of such
Software Copies, along with such supporting or additional information as LA may
from time to time reasonably request. Acceptance of payment by LA shall not
preclude LA from questioning the correctness of any statement at any time. In
addition to the foregoing, with respect to any of the LA Software for which LA
makes a practice of issuing certificates to End-Users, Reseller shall provide LA
with written notice of the resale of any Software Copies thereof, along with
End-User names and related information, within five (5) business days after
completion of the applicable sale to the End-User.
f. Accounting and Audit Rights. The Reseller shall keep and maintain
---------------------------
full and accurate books of account and records covering all Software Copies
duplicated by Reseller pursuant to Section 2 above. LA or its designees shall be
entitled, at its expense, to audit and inspect such books and records on a
quarterly basis during or after the License Term during reasonable business
hours and in each case upon five business (5) days prior written notice to the
Reseller, and make copies and summaries of such books and records. All such
books of account and records shall be retained by the Reseller for a minimum of
seven (7) years after expiration or termination of this Agreement. If LA or its
duly authorized representative discovers a deficiency in the payments to LA
pursuant to any statement in the period under audit (an "Audit Deficiency"), the
Reseller shall promptly pay such Audit Deficiency to LA and, if such Audit
Deficiency is three percent (3%) or more of the payments made to LA pursuant to
any statement in such audit period, the Reseller shall promptly pay all costs
and expenses incurred by LA in connection with such audit. If such Audit
Deficiency is twenty percent (20%) or more of the amounts paid to LA pursuant to
any statement in the period under audit, then in addition to the above, LA may,
at its sole option, immediately terminate the Agreement upon written notice to
the Reseller, even if the Reseller tenders the Audit Deficiency and associated
costs and expenses to LA.
7. LIMITED WARRANTY.
----------------
a. Standard Limited Warranty to End Users. Reseller shall pass on to
--------------------------------------
end users LA's standard limited warranty and other terms contained in the
applicable End User License Agreement for each Software Copy.
b. No Other Warranty. EXCEPT FOR LA'S STANDARD LIMITED WARRANTY TO
-----------------
END USERS, LA GRANTS NO OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, BY
STATUTE OR OTHERWISE, REGARDING THE LA SOFTWARE, THEIR FITNESS FOR ANY PURPOSE,
THEIR QUALITY, THEIR MERCHANTABILITY, OR OTHERWISE.
8. INDEMNIFICATION OBLIGATIONS
---------------------------
a. Indemnification by LA. The Reseller agrees that LA has the right
---------------------
to defend, or at its option to settle, and LA agrees, at its own expense, to
defend or at its option to settle, any
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claim, suit or proceeding brought against the Reseller on the issue of
infringement by the LA Software of any registered patent, copyright or trademark
issued in the Licensed Territory prior to the Effective Date of this Agreement,
or, with respect to Updates and Localized Versions, issued in the Licensed
Territory prior to the date of release to Reseller, subject to the limitations
hereinafter set forth. LA shall have sole control of any such action or
settlement negotiations, and LA agrees to pay, subject to the limitations
hereinafter set forth, any final judgment entered against the Reseller on such
issue in any such suit or proceeding defended by LA. The Reseller agrees that LA
at its sole option shall be relieved of the foregoing obligations unless the
Reseller notifies LA promptly in writing of such claim, suit or proceeding and
gives LA authority to proceed as contemplated herein, and, at LA's expense,
gives LA proper and full information and assistance to settle and/or defend any
such claim, suit or proceeding. If the LA Software, or any part thereof, is, or
in the opinion of LA may become, the subject of any claim, suit or proceeding
for infringement of any patent, copyright, or trademark or other intellectual
property right, then LA may, at its option and expense: (i) procure for the
Reseller the right to sell or use, as appropriate, the LA Software or such part
thereof; (ii) replace the LA Software, or portions thereof, with other suitable
LA Software or portions thereof; (iii) suitably modify the LA Software, or
portions thereof; or (iv) if none of the foregoing is commercially feasible in
LA's judgment, terminate this Agreement and the Reseller's license to the LA
Software. LA shall not be liable for any costs or expenses incurred without its
prior written authorization.
b. Limitation. Notwithstanding the provisions of Section 8(a) above,
----------
LA assumes no liability for (i) infringements covering any combination, method
or process in which any of the LA Software may be used but not covering the LA
Software when used alone, including without limitation any use of software
belonging to third parties, regardless of whether such software may be necessary
to the use or modification of, or compatible with, the LA Software, (ii)
infringements involving the modification or servicing of the LA Software, or any
part thereof, unless such modification or servicing was performed by LA, (iii)
failure of the Reseller to implement any Updates to the LA Software, if the
infringement would have been avoided by the use of the Update, (iv) any
trademark infringements involving any marking or branding other than LA's
Trademarks when used alone; or (v) infringements arising from uses of the LA
Software which do not comply with the uses permitted under this Agreement.
c. Entire Liability. The provisions of this Section 8 state the
----------------
entire liability and obligations of LA and the exclusive remedy of the Reseller
and its customers, with respect to any alleged infringement of patents,
copyrights, trademarks or other intellectual property rights by the LA Software
or any part thereof. The provisions of this Section 8 state the entire liability
and obligations of both parties and the exclusive remedy of both parties with
respect to any indemnification obligations, other than as set forth in Section
11(k) below
d. Indemnification by the Reseller. Except for LA's indemnification
-------------------------------
obligations set forth above, the Reseller will indemnify, defend and hold
harmless LA, its parents, subsidiaries, affiliates, and each of their respective
successors and permitted assigns, directors, officers, employees,
representatives, agents, consultants, and contractors in respect of any and all
losses, claims, suits, proceedings, liabilities, causes of action, damages,
costs, expenses (including reasonable attorneys' fees and expenses) arising out
of or relating to the breach or inaccuracy of, or failure to comply with, any of
the representations, warranties, covenants, agreements, terms or
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conditions made by the Reseller hereunder, the use, operation or distribution of
the LA Software, use of any audio recordings or other copyrighted material in
connection with the LA Software, or the actions or omissions, including
negligence and other tortious conduct, of the Reseller's or its Dealer-
Resellers' employees, officers, agents or contractors.
9. PROPERTY RIGHTS AND CONFIDENTIALITY
-----------------------------------
a. Property Rights. Reseller agrees that LA owns all right, title,
---------------
and interest in the product lines that include the LA Software and in all of
LA's patents, trademarks, trade names, inventions, copyrights, know-how, and
trade secrets relating to the design, manufacture, operation or service of the
LA Software. The use by Reseller of any of these property rights is authorized
only for the purposes herein set forth, and upon termination of this Agreement
for any reason such authorization shall cease.
b. Confidential Information. "Confidential Information" means this
------------------------
Agreement and its Exhibits, any addenda hereto signed by both parties, all LA
Software and Documentation, all information models, logic diagrams, data,
drawings, benchmark tests, specifications, structure, sequence, and
organization, object code and source code of or relating to the LA Software, if
disclosed to Reseller hereunder in written, electronic or verbal form, provided
that any verbal disclosure shall be confirmed in writing within thirty (30)
days, and any adaptations of the aforementioned, all knowledge and know-how
inherent to the LA Software, as well as the knowledge and know-how that is
applied to the configuration of the LA Software, and any other proprietary
information supplied to the Reseller by LA hereunder in written, electronic or
verbal form, provided that any verbal disclosure shall be confirmed in writing
within thirty (30) days. The Reseller acknowledges that LA's proprietary
interest in the Confidential Information includes LA's Trade Secrets, and
acknowledges that any use of the Confidential Information inconsistent with this
Agreement shall constitute an infringement of LA's intellectual property rights,
a misappropriation of LA's Trade Secrets, unfair competition and a breach of
this Agreement. The Reseller further acknowledges that the LA Software is
protected as an unpublished trade secret and embodies LA's copyrights and LA's
Trade Secrets.
c. Nondisclosure Obligations. The Reseller acknowledges that the
-------------------------
Confidential Information constitutes valuable trade secrets of LA and the
Reseller agrees that it shall use the Confidential Information solely in
accordance with the provisions of this Agreement and will not disclose, or
permit to be disclosed, the same, directly or indirectly, to any third party
without LA's prior written consent, except as expressly permitted by this
Agreement pursuant to the distribution of the LA Software; provided that the
End-User License Agreement contains provisions sufficiently protective of the
Confidential Information. The Reseller agrees to exercise a high standard of
care in protecting the Confidential Information from unauthorized use and
disclosure. Without limiting the foregoing, the Reseller shall adopt whatever
measures may be required to limit access to the Confidential Information to
those of its employees that are subject to non-disclosure obligations and who
require such access in order to use the LA Software in a manner consistent with
this Agreement. In addition, the Reseller assumes all responsibility and shall
indemnify LA for the fraudulent use or illegal copying or use of the
Confidential Information by its employees or related third parties.
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d. Reseller Confidential Information. "Reseller Confidential
---------------------------------
Information" means valuable business and technical information which is not
publicly available and is protected by Reseller as confidential information and
which is disclosed in tangible or intangible form by Reseller to LA in
connection with this Agreement, provided that any verbal disclosure must be
confirmed in writing within thirty (30) days. The Reseller Confidential shall
include, without limitation, all advertising material, price schedules and all
customer, marketing, sales, financial and trading information, relating to the
LA Software or Reseller's business, provided that the foregoing is not publicly
available and is protected by Reseller as confidential information. LA shall
observe the same obligations with respect to the Reseller Confidential
Information as imposed on Reseller above with respect to LA's Confidential
Information.
e. Exceptions to Nondisclosure Obligations. Notwithstanding the
---------------------------------------
above, the receiving party shall have no liability to the disclosing party with
regard to Confidential Information or Reseller Confidential Information which:
(i) was generally known and available in the public domain at
the time it was disclosed or becomes generally known and available in the public
domain through no fault of the receiving party;
(ii) was known to the receiving party at the time of disclosure as
shown by the files of the receiving party in existence at the time of
disclosure;
(iii) is disclosed with the prior written approval of the
disclosing party;
(iv) is independently developed by the receiving party without
any use of Confidential Information and by employees or other agents of the
receiving party who have not been exposed to such Confidential Information:
(v) becomes known to the receiving party from a source other
than the disclosing party without breach of this Agreement by the receiving
party and otherwise not in violation of the disclosing party's rights; or
(vi) is disclosed pursuant to the order or requirement of a
court, administrative agency, or other governmental body; provided, that the
receiving party shall provide prompt, advance notice thereof to enable the
disclosing party to seek a protective order or otherwise prevent such
disclosure, and provided that the receiving party's disclosure is limited to the
extent expressly required by such court, administrative agency or other
governmental body.
10. TERM AND TERMINATION. This Agreement shall commence upon the
--------------------
Effective Date and continue until expiration of the License Term, unless earlier
terminated in accordance with the provisions of this Agreement.
a. Mutual Agreement. This Agreement may be terminated pursuant
----------------
to the mutual, written agreement of the parties.
b. Termination Due to Related Events. This Agreement shall
---------------------------------
terminate automatically if the LAJ Shareholder Agreement is terminated for any
reason.
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c. Termination for Default by the Reseller. If the Reseller
---------------------------------------
defaults in the performance of any material provision of this Agreement, then LA
may give written notice to the Reseller that if the default is not cured within
thirty (30) days the Agreement will be terminated; provided that the cure period
shall be ten (10) days for payment obligations, and there shall be no cure
period of the nature of the default is not subject to cure. If LA gives such
notice and the default is not cured during the applicable period (if any), then
the Agreement shall automatically terminate at the end of that period.
d. Termination for Insolvency of the Reseller. This Agreement
------------------------------------------
may be terminated by LA, on notice, (i) upon the institution by or against the
Reseller of insolvency, receivership or bankruptcy proceedings or any other
proceedings for the settlement of the Reseller's debts, (ii) upon the Reseller's
making an assignment for the benefit of creditors, or (iii) upon the Reseller's
dissolution, winding up or ceasing to conduct business in the normal course.
e. Termination for Changes in Reseller's Business. This Agreement
----------------------------------------------
may be terminated by LA, upon written notice, upon the occurrence of any of the
following events, unless LA has granted its advance written approval (which
approval shall be deemed to be granted if approved by an LA-nominated director
pursuant to Section 3.3 of the LAJ Shareholder Agreement) in regard to the
applicable event: (i) upon the Reseller's making any basic change in the general
nature or scope of its business (as specified in Section 3.3 of the LAJ
Shareholder Agreement), including without limitation, changes to its articles of
incorporation, including any increase or reduction in authorized share capital
and any changes in the rights of outstanding shares; (ii) upon the removal of
the director from Reseller's board that was nominated by LA, if any; (iii) upon
the sale of any equity of Reseller other than pursuant to the initial formation
thereof as agreed by LA and Super Stage, Inc.; (iv) upon the merger or
consolidation of Reseller with another company, or the sale of all or
substantially all of the business or assets of Reseller, or any other change of
control of Reseller; (v) upon the establishment by Reseller, Super Stage, Inc.,
or any of their investors, of a business relationship with any direct competitor
of LA, including any directly or indirectly participating in any entity that
sells, resells or distributes any software product or service that materially
competes with the LA Software; (vi) upon the investment by Reseller in any other
business or entity; (vii) upon Reseller's entering into any material
transactions not in the ordinary course of business or between Reseller and a
director or shareholder of Reseller or an affiliate of such a shareholder, other
than the LAJ Shareholder Agreement; (viii) upon Reseller's entering into any
operational activities (other than resale or distribution of the LA Software and
related maintenance), partnering with third parties with respect to the same, or
receiving revenues from transactions that are enabled by the Liquid Audio
Software.
f. Legal or Regulatory Prohibitions. If any law or regulation
--------------------------------
applicable to LA or the Reseller prohibits use of the LA Software by the
Reseller in the manner contemplated by this Agreement, or permits the use of the
LA Software by the Reseller in a manner not expressly licensed by this
Agreement, this Agreement may be terminated by LA by giving written notice of
termination to the Reseller, such termination to be immediately effective upon
the giving of such notice.
g. Limitation on Termination Liability. In the event of
-----------------------------------
termination by LA in accordance with any of the provisions of this Agreement, LA
shall not be liable to the Reseller, because of such termination, for
compensation, reimbursement or damages on account of the loss of
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prospective profits or anticipated sales or on account of expenditures,
inventory, investments, leases or commitments in connection with the business or
goodwill of the Reseller. Termination shall not, however, relieve either party
of obligations incurred prior to the termination.
h. Return of Materials. Pursuant to Section 9(a) above, all
-------------------
trademarks, trade names, patents, copyrights, designs, drawings, formulas,
algorithms, golden masters, translations, artwork or other data, photographs,
samples, literature, and sales aids of every kind relating to the LA Software
shall be and remain the property of LA. Within thirty (30) days after the
expiration or termination of this Agreement, Reseller shall prepare all such
items in its possession for shipment, as LA may direct, at LA's expense.
Reseller shall not make or retain any copies of any confidential items or
information which may have been entrusted to it. Upon expiration of this
Agreement (but not upon any earlier termination hereof), Reseller shall have
limited sell-off rights in a manner consistent with this Agreement for a period
of forty-five (45) days with respect to inventory on hand in an amount not
greater than the immediately preceding quarter's total unit sales amount.
Effective upon the termination of this Agreement, Reseller shall cease to use
all trademarks, marks, and trade names of LA.
i. Survival of Certain Terms. The provisions of Sections 4(c),
-------------------------
6(d), 6(e), 6(f), 7, 8, 9, 10, 11, 12, along with all End-User License
Agreements for Software Copies previously distributed, shall survive the
expiration or termination of this Agreement for any reason. All other rights and
obligations of the parties shall cease upon termination of this Agreement.
11. MISCELLANEOUS PROVISIONS.
------------------------
a. Arbitration of Disputes. Except as otherwise provided in this
-----------------------
Agreement, any dispute, controversy or claim arising out of or relating to this
Agreement or to a breach hereof, including the interpretation, performance or
termination, shall be exclusively and finally resolved by binding arbitration.
Arbitration shall be conducted by the International Chamber of Commerce (the
"ICC") which shall administer the arbitration under its commercial rules (the
"Rules"). Arbitration under this Section 11(a) shall be initiated by a written
demand for arbitration specifying the controversy or claim on which arbitration
is sought, as well as the relief requested. Service of the arbitration demand
shall be effective if made pursuant to the notification provisions contained in
Section 11(e) below. The arbitration shall be conducted by a panel of three (3)
arbitrators chosen in accordance with said Rules within thirty (30) days after
receipt by the respondent of the demand to arbitrate. The arbitration, including
the rendering of the award, shall take place in Palo Alto, California, if
initiated by Reseller, or in Tokyo, Japan, if initiated by LA, as the case may
be, and shall be the exclusive forum for resolving such dispute, controversy or
claim. The arbitration proceedings and all pleadings and rulings shall be
conducted and written in the English language. For the purpose of any
arbitration proceeding, this Agreement shall be governed by the governing law
described in Section 11(c) below. This arbitration agreement is intended by the
parties to be self-executing. The panel shall have sole jurisdiction to
determine whether (i) a claim is subject to arbitration, (ii) the arbitration
may proceed even if one of the parties refuses to attend or participate and
(iii) an award against that party may be ordered pursuant to default or
otherwise by the panel. The parties agree that they will arbitrate all claims
agreed to be arbitrated herein regardless of the existence of any related
dispute, action or special proceeding between any or all of the parties hereto
and/or any third party. The arbitration panel shall render a written arbitration
decision with its
-16-
award, and the decision of the arbitration panel shall be final and binding upon
the parties hereto, and the parties hereby waive any right of appeal under
applicable law. Judgment upon the award rendered by the arbitration panel may be
entered in any court of competent jurisdiction. The prevailing party shall be
entitled to recover its reasonable attorneys' fees and its share of the costs
including any auditing costs or expenses of expert witnesses.
b. Injunctive Relief. In the event of actual or threatened breach
-----------------
of the provisions of Section 2 or 9 above, the nonbreaching party will have no
adequate remedy at law and will be entitled to immediate and injunctive or other
equitable relief, without bond and without the necessity of showing actual money
damages, and notwithstanding Section 11(a) above, each party shall have the
right to institute judicial proceedings against the other party or anyone acting
by, through or under such other party in order to seek such injunctive or other
equitable relief. The prevailing party in any such legal action for injunctive
or equitable relief shall be entitled, in addition to any other rights and
remedies it may have, to reimbursement for its expenses, including court costs
and reasonable attorneys' fees. With respect to any such legal action for
injunctive or equitable relief, the State courts sitting in Santa Xxxxx County,
California, and the Federal courts for the Northern District of California shall
have nonexclusive jurisdiction, and the parties hereby irrevocably consent to
personal jurisdiction of and venue in such courts in any such matter and waive
any objection thereto.
c. Governing Laws. The validity, construction and enforceability
--------------
of this Agreement shall be governed in all respects by the laws of the State of
California (and applicable United States federal law) applicable to agreements
negotiated, executed and performed in the State of California by California
parties, without reference to conflict of law principles. For the avoidance of
doubt, the rights and obligations of the parties under this Agreement shall not
be governed by the 1980 United Nations Convention on Contracts for the
International Sale of Goods.
d. Disclosure; Publicity. Except as specifically provided herein,
---------------------
nothing in this Agreement shall be deemed to give either party any rights to use
the other party's trademarks or trade names without the other party's specific,
written consent. LA and the Reseller shall consult with each other before
issuing any press releases or otherwise making any public statements with
respect to this Agreement and the transactions contemplated hereby. Neither LA
nor the Reseller shall issue any such press release or make any public statement
without the agreement of the other party, except as may be required by law.
e. Notices. All notices required hereunder shall be in writing
-------
and shall be made by personal delivery, or by legible facsimile or by first
class, registered or certified mail, postage prepaid, or by express courier, to
LA and to the Reseller at the address and telecopier numbers indicated below:
(1) For the Reseller:
Sunfelista Meguro Building
9/th/ Floor, 00-0, Xxxx-Xxxxx 0-Xxxxx
Xxxxxxxxx-xx, Xxxxx 000-0000, Xxxxx
Attention: Masahiro Kuroki
Telecopy: (0)0000-0000
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With a mandatory copy to:
Nishimura & Partners
Ark Xxxx Xxxxxxxx, 00/xx/ Xxxxx
00-00, Xxxxxxx 1-Chome
Xxxxxx-Xx, Xxxxx, 000-0000, Xxxxx
Attention: Xxxxxxxx Xxxxxxxx, Esq.
Telecopy: (00)0000-0000
(2) For LA:
Liquid Audio, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: 650.549.2099
With a mandatory copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxx, Esq.
Telecopy: 000.000.0000
or such other address or addresses as may have been furnished in writing to LA
by the Reseller or to the Reseller by LA. Any notice or other communication
required to be given hereunder shall have been duly given five (5) business days
after posting when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited postage prepaid, or if by
legible facsimile, when received or, if by express courier or in person, when
received.
f. Severability. Whenever possible, each provision of this
------------
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision or portion of any provision of this Agreement should be
invalid under applicable law, such provision or portion of such provision shall
be ineffective to the extent of such invalidity, without invalidating the
remainder of such provision or remaining provisions of this Agreement.
g. Waiver. A provision of this Agreement may be waived only by a
------
written instrument executed by the party entitled to the benefit of such
provision. The failure of any party at any time to require performance of any
provision of this Agreement shall in no manner affect such party's right at a
later time to enforce the same. A waiver of any breach of any provision of this
Agreement shall not be construed as a continuing waiver of other breaches of the
same or other provisions of this Agreement.
-18-
h. Further Assurances. The parties shall each perform such acts,
------------------
execute and deliver such instruments and documents, and do all such other things
as may be reasonably necessary to accomplish the transactions contemplated by
this Agreement. In the event that the Reseller fails to promptly execute any
documents reasonably necessary to confirm or set of record LA's rights to the LA
Software, Updates, Localized Versions or any other Work Product owned by LA
hereunder, the Reseller hereby appoints LA as its attorney-in-fact for the
purpose of executing such documents, which appointment shall be deemed a power
coupled with an interest and shall be irrevocable.
i. Subject Headings; Counterparts. The subject headings of the
------------------------------
sections of this Agreement are included for the purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions. This Agreement may be executed in counterparts. Each executed
counterpart may be delivered to the other party by facsimile and copies bearing
the facsimile signature of a party will constitute a valid and binding execution
and delivery of this Agreement.
j. Entire Agreement. This Agreement, including the Exhibits
----------------
attached hereto, constitutes the entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior agreements, communications
and understandings between them with respect thereto. No modification of this
Agreement shall be effective without the mutual written agreement of both
parties. No terms or conditions of any purchase order, acknowledgment or other
business form that the Reseller may use in connection with the acquisition or
licensing of the LA Software will have any effect on the rights and obligations
of the parties hereunder, or otherwise modify this Agreement, regardless of any
failure by LA to object to such terms or conditions.
k. Independent Contractors. The relationship of LA and the Reseller
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give either party the
power to direct and control the day-to-day activities of the other, (ii)
constitute the parties as partners, co-owners or otherwise as participants in a
joint or common undertaking, or (iii) allow the Reseller to create or assume any
obligation on behalf of LA for any purpose whatsoever. All financial obligations
associated with the Reseller's business are the sole responsibility of the
Reseller. All sales and other agreements between the Reseller and its customers
are the Reseller's exclusive responsibility and shall have no effect on the
Reseller's obligations under this Agreement. The Reseller shall be solely
responsible for, and shall indemnify and hold LA free and harmless from, any and
all claims, damages or lawsuits (including LA's reasonable attorneys' fees)
arising out of the negligence or other tortious conduct of the Reseller, its
employees or its agents in performing Reseller's obligations or exercising
Reseller's rights under this Agreement. LA shall indemnify and hold Reseller
free and harmless from any and all claims, damages or lawsuits (including
Reseller's reasonable attorneys' fees) arising out of the negligence or other
tortious conduct of LA's employees or agents in performing LA's obligations
under this Agreement.
l. Nonassignability and Binding Effect. A mutually agreed
-----------------------------------
consideration for LA's entering into this Agreement is the reputation, business
standing, and goodwill honored and enjoyed by the Reseller under its present
ownership, and, accordingly, the Reseller agrees that its license and other
rights and obligations under this Agreement may not be transferred or assigned
-19-
directly or indirectly, whether by operation of law or otherwise, without the
prior written consent of LA, and any purported transfer or assignment without
such consent shall be void ab initio. Subject to the foregoing sentence, this
-- ------
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their successors and assigns.
m. Force Majeure. Except for payment obligations hereunder, neither
-------------
party shall incur liability to the other party due to any delay or failure in
performance hereunder caused by reason of any occurrence or contingency beyond
its reasonable control, including but not limited to failure of suppliers,
strikes, lockouts or other labor disputes, riots, acts of war or civil unrest,
earthquake, fire, the elements or acts of God, novelty of product manufacture,
unanticipated product development problems, or governmental restrictions or
other legal requirements; provided, that such party notifies the other party in
writing immediately upon commencement of such event and makes diligent efforts
to resume performance immediately upon cessation of such event. In the event
such events continue for a period of one hundred eighty (180) days in the
aggregate, the other party shall have the right to terminate this Agreement upon
written notice to such party.
n. Language. This Agreement is in the English language only, which
--------
language shall be controlling in all respects, and all versions hereof in any
other language shall not be binding on the parties hereto. All communications
and notices to be made or given pursuant to this Agreement shall be in the
English language.
o. Compliance with Laws. The Reseller shall, at its own expense,
--------------------
pay all import licenses and permits, pay customs charges and duty fees, and take
all other actions required to accomplish the import and use of the LA Software
in the Licensed Territory. The Reseller shall ensure compliance with any
applicable laws relating to its activities under the terms of this Agreement,
and Reseller hereby represents and warrants that no consent, approval or
authorization, or designation, declaration or filing with any governmental
authority in the Licensed Territory is required in connection with the valid
execution, delivery and performance of this Agreement.
p. Government Regulations. The Reseller acknowledges that LA may be
----------------------
subject to regulation by various government agencies having jurisdiction, which
may prohibit use, export, re-export or diversion of certain products and
technology in or to the Licensed Territory. Any and all obligations of LA to
provide the LA Software, Documentation, or any media in which any of the
foregoing is contained, as well as any other technical assistance shall be
subject in all respects to such applicable laws and regulations as shall from
time to time govern the license and delivery of technology and products. The
Reseller agrees to cooperate with LA, including, without limitation, providing
required documentation, in order to obtain any necessary export licenses or
exemptions therefrom. The Reseller warrants that it will use its reasonable
efforts to comply with all such applicable laws and regulations governing use,
exportation and reexportation in effect from time to time.
12. LIMITATION OF LIABILITY. EXCEPT FOR INDEMNIFICATION OBLIGATIONS UNDER
-----------------------
SECTION 8 ABOVE, IN NO EVENT SHALL LA'S AGGREGATE LIABILITY HEREUNDER EXCEED THE
TOTAL AMOUNTS PAID BY THE RESELLER HEREUNDER DURING THE ANNUAL PERIOD(S) IN
WHICH SUCH CLAIM(S) AROSE. IN NO EVENT SHALL LA BE LIABLE TO THE RESELLER OR ANY
OTHER ENTITY FOR ANY
-20-
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR RELIANCE DAMAGES, HOWEVER
CAUSED, WHETHER FOR BREACH OF CONTRACT, NEGLIGENCE OR UNDER ANY OTHER LEGAL
THEORY, WHETHER FORESEEABLE OR NOT AND WHETHER OR NOT LA HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY. IN NO EVENT SHALL LA BE LIABLE FOR LOST DATA,
LOST PROFITS, BUSINESS INTERRUPTION, FAILURE OF THE SOFTWARE, OR COSTS OF
PROCUREMENT OF SUBSTITUTE GOODS BY ANYONE. THE RESELLER AGREES THAT THESE
LIMITATIONS OF LIABILITY ARE AGREED ALLOCATIONS OF RISK AND ARE REFLECTED IN THE
ROYALTIES AND FEES AGREED UPON BY THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized.
LIQUID AUDIO, INC. LIQUID AUDIO JAPAN, INC.
By: /s/ XXXXXX XXXXX By:____________________________
--------------------------------- (Signature)
(Signature)
Name: /s/ XXXXXX XXXXX Name: ___________________________
------------------------------- (Print or Type)
(Print or Type)
Title: VP BUSINESS DEVELOPMENT Title: __________________________
------------------------------
List of Exhibits:
-----------------
Exhibit A: LA Software and Discount Schedule
----------------------------------------------
Exhibit B: Minimum Annual Payment Obligations
-----------------------------------------------
Exhibit C: Authorized Dealer-Resellers
----------------------------------------
Exhibit D: Scope of Initial Localized Version
-----------------------------------------------
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EXHIBIT A
---------
LA SOFTWARE AND DISCOUNT SCHEDULE
---------------------------------
LA Software
-----------
All current LA client, server and content creation software which LA itself has
the right to license in Japan, including both US versions and Localized Versions
Discount
--------
[*]
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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EXHIBIT B
---------
MINIMUM ANNUAL PAYMENT OBLIGATIONS
----------------------------------
Annual Period (commencing) Minimum Annual Payment Obligation
-----------------------------------------------------------------------------
1998 [*]
1999 [*]
2000 [*]
2001 [*]
2002 [*]
2003 [*]
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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EXHIBIT C
---------
AUTHORIZED DEALER-RESELLERS
---------------------------
None
-24-
EXHIBIT D
---------
SCOPE OF INITIAL LOCALIZED VERSION
----------------------------------
Development of Localized Version of the interface to the Liquid Music Player
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