General Terms & Conditions
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General
Terms &
Conditions
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Effective
Date: August 18, 2005
Company: Sonic
Solutions, 000 Xxxxxxx Xxx, Xxxxxx, XX 00000
These
General Terms & Conditions are made and entered into on the Effective Date set forth
above, by and between Digital
River, Inc., a Delaware corporation with offices located at 0000 Xxxx
00xx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx, XX 00000 (“DR”) and the entity or
organization named above (the “Company”) (each, a “Party”, and together, the
“Parties”). The
Parties agree as follows:
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1.
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Intent. The
purpose and intent of these General Terms & Conditions is to establish
terms and conditions that shall be incorporated by reference into any
subsequent agreement specifically referencing these General Terms &
Conditions that may be entered into between DR and Company (each, an
“Agreement”). These
General Terms & Conditions shall be interpreted solely in the context
of such an Agreement. These General Terms & Conditions
shall not bind either Party unless and until an Agreement is executed by
the Parties in accordance with these General Terms & Conditions, at
which time they will be automatically incorporated by reference into, and
made a part of, that Agreement. In no event, however, shall
these General Terms & Conditions be construed as obligating DR or
Company to enter into any particular Agreement with the
other. Appendix 1 to these General Terms & Conditions is
hereby incorporated by reference.
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2.
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Ownership of Materials.
DR acknowledges that any materials provided to it by or on behalf of
Company pursuant to this Agreement are the property of Company or its
licensors, and that DR has no rights in such materials. Company
acknowledges that any materials (other than those materials developed
specifically for Company and for which Company makes payment to DR
pursuant to a separate written agreement between DR and Company) provided
by DR in the performance of its obligations under an Agreement (including
without limitation DR
Materials and Work Product) are the
property of DR or its licensors, and that Company has no rights in such
materials. Neither Party shall disassemble, decompile, or
otherwise reverse engineer (as applicable) any Software, DR Materials
or Work
Product, or otherwise attempt to learn the source code or
algorithms underlying them. Company grants to DR the right to
use those of its Trademarks supplied by Company to DR solely for the
purpose of DR’s performance of its obligations under Agreements and as
otherwise permitted by written agreement between DR and Company (which, in
the case of Company, must be executed by an officer of
Company). Each Party acknowledges that any of the other Party’s
Trademarks are
owned and licensed solely and exclusively by that Party, and agrees to use
such Trademarks
only in the form and with appropriate legends as prescribed by such other
Party. Neither Party will remove, cover, or modify any
proprietary rights notice or legend placed by the other Party on materials
used in connection with an
Agreement.
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3.
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Term &
Termination.
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3.1.
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Term. The
initial term of each Agreement will commence on the Effective Date
specified in the Agreement and will continue for a period of one (1) year
from the Effective
Date, and will automatically renew thereafter for successive one
(1) year renewal terms, except that an
Agreement may be terminated by either Party (a) as of the end of the
initial term or any renewal term by giving the other Party written notice
of termination at least one hundred and twenty (120) calendar days prior
to the end of such term; or (b) as otherwise provided in these General
Terms & Conditions or an
Agreement.
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3.2.
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Rights of
Termination. Either Party may terminate an Agreement
(and/or any other Agreements then in effect at that Party’s discretion)
upon written notice to the other Party in the event of (i) the other
Party’s breach of a representation or warranty made hereunder or failure
to substantially perform its obligations under these General Terms &
Conditions or an Agreement, or (ii) the assertion against the other Party
of a claim that all or part of any materials, items, products or
information developed or used in connection with an Agreement infringes or
otherwise violates the Rights of any other
person, entity or organization, but in all such cases, only where written
notice of such breach or failure is provided by the non-breaching Party,
and such breach or failure to perform is not cured within thirty (30)
calendar days of the breaching Party’s receipt of that
notice.
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Further, either Party may
immediately terminate an Agreement (and/or any other Agreements then in effect
at that Party’s discretion), without opportunity to cure, upon written notice to
the other Party in the event of (a) the assertion against either Party of claims
relating to product liability; or (b) the material violation of the privacy
policy of either Party; or (c) the commission of a fraudulent or criminal act by
either Party; or (d) either party substantially ceases to do business in the
manner in which it was conducted as of the Effective Date of these
General Terms & Conditions (for the avoidance of doubt, a sale of Company’s
business, transfer of stock or assets, or other like transaction between Company
and a third party shall not trigger either Party’s right to terminate under this
clause (d)); or (e) either Party initiates or has initiated against it,
voluntarily or involuntarily, any act, process or proceeding under the
provisions of any bankruptcy statute or law, or under any other insolvency law
or other statute or law providing for the modification or adjustment of the
rights of creditors.
Further,
in the event any claims in connection with any Product sold, resold or
distributed by DR or a Related
Party pursuant to an Agreement are asserted against DR, a Related Party or Company (or
against the publisher of Products distributed but not
published by Company), DR will have the right to suspend or terminate
distribution of such Product, and may take such
other actions as it deems to be reasonably necessary to comply with or as
permitted under applicable law (including without limitation the “safe harbor”
provisions of the Digital Millennium Copyright Act). Such actions may
include, but are not limited to, the suspension of DR’s performance hereunder
and/or termination of its Agreements with Company upon notice to
Company.
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3.3.
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Events upon
Termination. Upon the later of (a) the date of
termination of an Agreement or (b) the end of the Winding-Down Period for
that Agreement if such a period is specified in that Agreement, each Party
will cease performance of its obligations under that Agreement, and each
Party will promptly return or destroy any of the other Party’s Confidential
Information or other materials in its possession or
control. Termination will not affect each Party’s payment
obligations to the other Party in connection with activities prior to
termination of the Agreement.
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3.4.
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Contract
Review. After the initial term, DR and Company agree
that between the first and third months of every year of the renewal
term(s), the parties shall review and (to the extent deemed necessary by
both parties) renegotiate in good faith the current pricing for all
services being provided to Company by DR, as well as any appropriate
changes to risk allocation warranted by pricing
changes.
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3.5
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Survival. The
provisions of these General Terms & Conditions and any Agreement
which, by their terms, require performance after the termination of these
General Terms & Conditions or that Agreement, or have application to
events that may occur after such termination, shall survive the
termination of these General Terms & Conditions and that
Agreement.
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4.
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Confidentiality. All
Confidential
Information provided by a Party will be maintained in confidence by
the other Party, and neither Party will, during the term of the Agreement
pursuant to which such information was disclosed and or for a period of
three (3) years following the termination of that Agreement, divulge to
any person or organization, or use in any manner whatsoever, directly or
indirectly, for any reason whatsoever, any of the Confidential
Information of the other Party without receiving the prior written
consent of the other Party. The terms of these General Terms
& Conditions and any Agreements (including pricing) shall be
considered Confidential
Information. Each Party will take such actions as may be
reasonably necessary to ensure that its employees and agents are bound by
the provisions of this Section, which actions will, as may be reasonably
requested by either Party, including the execution of written
confidentiality agreements with the employees and agents of the other
Party. The provisions of this Section will not have application
to any information that (i) becomes lawfully available to the public; (ii)
is received without restriction from another person or organization
lawfully in possession of such information; (iii) was rightfully in the
possession of a Party without restriction prior to its disclosure; or (iv)
is independently developed by a Party or its employees or agents without
access to the other Party’s similar
information.
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5.
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Publicity. Neither
Party may publicly disclose any of the specific terms of these General
Terms & Conditions or an Agreement, or issue any press release
regarding the subject matter of these General Terms & Conditions or
any Agreement, without the prior written consent of the other Party, which
consent will not be unreasonably withheld (except consent will not be
required for disclosures required by law or to comply with any state or
federal reporting requirement, e.g., those of the Securities and Exchange
Commission, or any Board of Exchange on which a Party’s stock is
traded). Company gives its approval and consent for DR
(a) to include Company’s name and/or logo in its client list (provided
that DR follows any reasonable trademark usage guidelines provided to it
from time to time by Company in connection therewith) and refer to Company
in marketing materials and business conversations as a client of DR, and
(b) to disclose general information about the Parties’ relationship
created by these General Terms & Conditions and any Agreements, and
the general nature of the activities to be conducted under an
Agreement.
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6.
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Warranties. Each
Party represents and warrants to the other that: (i) it has full right,
power and authority to enter into and fully perform its obligations under
these General Terms & Conditions and any Agreements; (ii) the
execution, delivery and performance of these General Terms &
Conditions and any Agreements by that Party does not conflict with any
other agreement to which it is a Party or by which it is bound; (iii) to
its actual knowledge, any products, materials, or information provided by
it will not, when used in accordance with the associated instructions and
when standing alone (i.e., not combined with
any items not provided by such Party), infringe or otherwise violate the
Rights of any
other person or organization; and (iv) it shall substantially comply with
all material laws and regulations (including without limitation Export Control Laws)
applicable to its activities in connection with these General Terms &
Conditions and any Agreements. Each party’s sole remedy for
claims arising out of clause (iii) above shall be indemnification pursuant
to Section 7.1 below. Company further represents and warrants
to DR that (a) Company is the owner or fully authorized licensee of all
Rights to the
Products provided
to DR, and (b) any Software provided to
DR, or other software used by Company in connection with an Agreement,
shall not, as delivered by Company, contain any viruses, trojan horses,
malware, spyware, adware or other disruptive software, or any software
code which is designed to disrupt, damage, or perform unauthorized actions
on a computer system, or which transmits data from a user’s computer
without notice to and the express prior consent of the
user. Each party’s sole remedy for claims arising out of the
immediately preceding sentence shall be indemnification pursuant to
Section 7.1 below. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH
PARTY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES WITH REGARDS TO THE
MATERIALS AND SERVICES PROVIDED BY THAT PARTY, INCLUDING WITHOUT
LIMITATION MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT AND TITLE.
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7.
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Risk
Allocation. THE TERMS WITHIN THIS SECTION 7 REFLECT AN
AGREED-UPON ALLOCATION OF RISK BETWEEN THE PARTIES SUPPORTED BY (AMONG
OTHER THINGS) THE PRICING AGREED TO BETWEEN THE PARTIES, AND THIS
ALLOCATION IS A FUNDAMENTAL PART OF THE BASIS OF THE BARGAIN BETWEEN
THEM.
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7.1.
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Indemnification. Each
Party and its successors and assigns will indemnify, defend, and hold
harmless the other Party and its successors and assigns (and in the case
of Company as the indemnifying Party, any Related Party) from and
against any and all claims, demands, losses, costs, expenses (including,
but not limited to, the reasonable cost of obtaining an opinion of counsel
in response to a notice of potential infringement of the Rights of any other
person or organization, unless the indemnifying Party has already obtained
an applicable non-infringement opinion from counsel, and agrees to share
that opinion with the indemnified Party), obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties,
reasonable attorneys’ fees and costs (collectively, “Losses”) brought by a
third party other than an Affiliate, that the
indemnified Party may incur or suffer, which arise, result from, or relate
to (i) the breach by the indemnifying Party of any of its representations
and warranties set forth in these General Terms & Conditions or any
Agreement or a breach of Section 8.4 of these General Terms &
Conditions, or (ii) the failure of the indemnifying Party to perform any
of its obligations under these General Terms & Conditions or any
Agreement, or (iii) the assertion of any infringement or other claims
alleging that any of the materials provided by the indemnifying Party
violate the Rights of any other
person or organization, or (iv) damages to property or personal injury
caused by the negligence or willful acts of the indemnifying Party or any
of its employees or agents, or (v) the violation by the indemnifying Party
of its privacy policy. Further, Company and its successors and
assigns will indemnify, defend, and hold harmless DR, DR Xxxxxxxxxx, Related Parties and
their successors and assigns from and against and in respect of any and
all third party Losses that any such
indemnified party may incur or suffer, which arise, result from, or relate
to (a) the distribution of Company’s Products by or through
any such indemnified party, except to the extent caused by the negligence
or willful misconduct of the indemnified party; or (b) the honoring of any
warranty by DR, a DR Xxxxxxxxx, or a Related Party as a
seller based on the failure of a Product to function as
advertised or any other reason beyond the control of the indemnified
party, or (c) any tax liability on the sale of Products to End Users imposed on DR
by a locality or jurisdiction resulting from Company’s (but not DR’s)
nexus or contacts with that locality or
jurisdiction.
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7.2.
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Indemnification
Procedure. A Party seeking indemnification must promptly
provide to the other written notice of the claim and tender the defense of
that claim. Upon receipt of such notice, the Party receiving
notice will respond in writing to the tender of defense within twenty (20)
business days of receipt notifying the indemnifying Party of any claim,
demand, suit or proceeding for which the indemnifying Party has agreed to
indemnify and hold the indemnified Party harmless, and the indemnifying
Party, upon written request by the indemnified Party, will promptly defend
and continue the defense of such claim, demand, suit or proceeding at the
indemnifying Party’s expense. A failure by the indemnifying
Party to respond in writing to the tender of defense within the time
specified in this paragraph will be deemed a waiver of any objection to
its obligation to defend the indemnified Party, but a reservation of the
indemnifying Party’s rights to object to any subsequent obligation to
indemnify or to hold harmless the indemnified Party. In the
event the indemnifying Party accepts the tender of defense with a
reservation of rights, rejects the tender of defense or fails to respond
to a tender of defense, the indemnified Party shall thereafter have the
right to control of the defense of such claim, including the right to
select which firm defends the claim. In the event the
indemnifying Party rejects the tender of defense, the indemnifying Party
will be liable for any legal fees and expenses incurred by the indemnified
Party to compel the indemnifying Party to honor its obligations under this
Section, and the indemnifying Party expressly waives any right it may have
under statutory or common law which might operate to make the recovery of
fees under this provision a mutual
right.
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The
indemnifying Party will obtain the indemnified Party’s express prior written
approval (such approval not to be unreasonably withheld, delayed or conditioned)
to settle any claim if such settlement (i) arises from or is part of any
criminal action, suit or proceeding, or (ii) contains a stipulation to or
admission or acknowledgment of any liability or wrongdoing on the part of the
indemnified Party, or (iii) requires any specific performance or non-pecuniary
remedy by the indemnified Party.
If the
indemnifying Party fails to undertake and continue such defense or fails (in the
indemnified Party’s sole and reasonable opinion) to adequately pursue or conduct
such defense, the indemnified Party will have the right (but not the obligation)
to make and continue such defense as it considers appropriate, and the expenses
and costs thereof (including without limitation the amounts of any judgment
rendered against the indemnified Party) will be paid by the indemnifying
Party.
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7.3.
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Limitation on
Liability. Except for each Party’s indemnification
obligations relating to intellectual property infringement pursuant to
Section 7.1(iii), the total liability of a Party under an Agreement for
any cause will not exceed the net amount paid by Company to DR under that
Agreement.
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7.4.
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No Consequential
Damages. Except for damages resulting from a breach of
confidentiality or privacy obligations hereunder, NEITHER DR NOR COMPANY
WILL HAVE ANY LIABILITY TO EACH OTHER OR TO ANY OTHER PERSON OR
ORGANIZATION FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY,
PUNITIVE OR SPECIAL DAMAGES OF ANY DESCRIPTION (INCLUDING WITHOUT
LIMITATION LOST PROFITS OR LOSS OR INTERRUPTION OF BUSINESS), WHETHER
BASED ON CONTRACT, NEGLIGENCE, TORT, OR ANY OTHER LEGAL THEORY, REGARDLESS
OF WHETHER ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND IRRESPECTIVE OF
THE NUMBER OR NATURE OF CLAIMS. THE LIMITATIONS UPON DAMAGES
AND CLAIMS SET FORTH IN THIS SECTION 8 IS INTENDED TO APPLY
WITHOUT REGARD TO WHETHER OTHER PROVISIONS OF THIS AGREEMENT HAVE BEEN
BREACHED OR HAVE BEEN HELD TO BE INVALID OR INEFFECTIVE AND
NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY
PROVIDED HEREIN.
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8.
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Miscellaneous.
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8.1.
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Integration;
Amendments. These General Terms & Conditions and any
Agreement(s) between the Parties set forth the entire understanding
between the Parties with respect to the subject matter thereof, and
supersedes any and all prior or contemporaneous proposals, communications,
agreements, negotiations, and representations, whether written or oral,
related thereto. No amendment to these General Terms &
Conditions or any Agreement will be valid unless made in writing and
physically signed by the Parties. In the event of any conflict
or inconsistency between a term in these General Terms & Conditions
and a corresponding term in any Agreement, the term in the Agreement will
control. In the event of a conflict between a term in these
General Terms & Conditions and a corresponding term in any other
instrument or understanding between the Parties, the term in these General
Terms & Conditions will
control.
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8.2.
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Inurement;
Assignment. Each Agreement will be binding upon and
inure to the benefit of the Parties and their permitted successors and
assigns. Neither Party may assign its rights or delegate its
duties under these General Terms & Conditions or any Agreement
(whether directly or indirectly, by operation of law or otherwise) without
the prior written consent of the other Party, which consent will not be
unreasonably withheld or delayed. In the event of a merger,
acquisition, joint venture, or sale of substantially all of its assets or
business of a Party (or any substantially similar transaction), and so
long as the entity to which the contract is assigned is not a direct
competitor of the other Party, that Party will be entitled (upon written
notice to, but without the prior written consent of, the other Party) to
assign this agreement to an affiliate, subsidiary or otherwise in
connection with such transaction, so long as the assigning Party, at the
option of the other Party, guarantees in writing the performance of the
assignee.
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In order
to effectuate (a) the processing of payment for Transactions between DR and
End Users located
outside the United States (“Non-US Transactions”) and (b)
the payment of amounts to Company related to such Non-US Transactions ((a) and
(b) collectively, the “Non-US
Transaction Obligations”), DR may partially assign this Agreement to a
wholly-owned subsidiary of DR, and any such subsidiary to which this Agreement
is so assigned shall be considered an additional party to this Agreement with
respect to that subsidiary's performance of Non-US Transaction
Obligations. For the avoidance of doubt, any such assignment
shall be effective upon written notice from DR to Company as required by these
General Terms & Conditions. Nothing in the foregoing shall
relieve DR of its obligations under this Agreement, and DR shall remain the
guarantor of any such subsidiary's performance under this
Agreement.
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8.3.
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Governing
Law. Each Agreement will be governed by the laws of the
State of Delaware in the United States without reference to or use of any
conflicts of laws provisions therein. The Parties agree
that: (a) Hennepin County, Minnesota is the venue for any
proceedings regarding an Agreement brought by Company and that any legal
proceedings brought by Company arising out of or relating to an Agreement,
including the negotiations or performance hereof, will be brought in the
courts of Hennepin County, Minnesota, or the applicable United States
District Court sitting in Hennepin County, Minnesota; and (b) Marin
County, California is the venue for any proceedings regarding this
Agreement brought by DR and that any legal proceedings brought by DR
xxxxxxx out of or relating to an Agreement, including the negotiations or
performance hereof, will be brought in the courts of Marin County,
California, or the United States District Court for the Northern District
of California. Notwithstanding the foregoing, either Party may,
without the necessity of first posting a bond or other security or
demonstrating any actual damages, seek and, if granted, obtain immediate
equitable or injunctive relief under Section 8.7 from any court of
competent jurisdiction. The Parties specifically disclaim
application of the United Nations Convention on the International Sale of
Goods, 1980.
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8.4.
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Export
Compliance. DR and Company shall comply with all
relevant export control laws and regulations of any nation (collectively,
“Export Control
Laws”) that may apply to DR, Company, the Products or any End Users, as may be
the case, including, without limitation, U.S. embargo laws administered by
the Office of Foreign Assets Control and the U.S. Export Administration
Regulations. DR and Company shall not export or re-export any
Products except
as permitted by such applicable Export Control
Laws. If required by any applicable Export Control Laws,
Company (and not DR) shall apply for and obtain any export license
required from the relevant governmental authority as to any specific Product, End User or shipment
destination and shall furnish a copy of such license to
DR. DR may suspend or stop delivery of any Products where DR
reasonably believes any such delivery will violate any applicable Export Control Laws or
where Company has failed to apply for and obtain any required export
license(s).
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Company
shall advise DR of the specific codes and classifications under any Export Control Laws
applicable to any Products (including without
limitation provision of appropriate Export Control Classification Numbers
(“ECCNs”) and Schedule B
codes). Company shall promptly notify DR of any changes to such codes
or classifications, or any modifications to the Products that may affect such
codes or classifications. Any information provided pursuant to this
paragraph shall be provided to DR via email at xxx@xxxxxxxxxxxx.xxx.
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8.5.
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Notices. Notification
of any event required pursuant to these General Terms & Conditions or
an Agreement will be deemed provided if such notice references these
General Terms & Conditions and this Section, is in writing, and is
personally delivered or sent by nationally or internationally recognized
express courier to the other Party at the address specified at the
beginning of these General Terms & Conditions, ATTN: General
Counsel. Notice will be deemed effective upon
delivery.
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8.6.
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Force
Majeure. Neither Party will be in breach of these
General Terms & Conditions or an Agreement in the event it is unable
to perform its obligations as a result of natural disaster, war, emergency
conditions, labor strike, acts of terrorism, the substantial inoperability
of the Internet, the inability to obtain supplies, or any other reason or
condition beyond its reasonable control; provided, however, if such
reasons or conditions remain in effect for a period of more than sixty
(60) calendar days, either Party may terminate these General Terms &
Conditions and all Agreements without cause upon written notice to the
other Party.
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8.7.
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Irreparable
Harm. Each Party acknowledges that its breach of these
General Terms & Conditions or an Agreement would cause irreparable
injury to the other for which monetary damages are not an adequate
remedy. Accordingly, a Party will be entitled to injunctive
relief and other equitable remedies in the event of a breach of the terms
of these General Terms & Conditions or an Agreement. The
availability of injunctive relief will be a cumulative, and not an
exclusive, remedy available to the
Parties.
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8.8.
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Non-Solicitation. Each
Party (for the purposes of this Section, the “Hiring Party”) shall
include as part of its interview process for employees and contractors an
inquiry as to whether or not an applicant is or was an employee of the
other Party (for the purposes of this Section, the “Non-Hiring
Party”). In the event a Hiring Party determines that an
applicant is a current employee of the Non-Hiring Party (or has left the
Non-Hiring Party’s employ within three (3) months of the date of inquiry),
the Hiring Party will notify the candidate of its obligations to the
Non-Hiring Party under this Section and provide the applicant with an
option to withdraw her or his application. For applications not withdrawn,
the executive of the appropriate division of the Hiring Party will notify
the CFO and General Counsel of the Non-Hiring Party of the application
pursuant to Section 8.5. The notice will not identify the
applicant by name, but will contain a description of the applicant's
current (or, as applicable, final) functional position at the Non-Hiring
Party. Within three (3) business days of his/her receipt of
notice, the Non-Hiring Party will provide to the Hiring Party either (i) a
written waiver allowing the application process to continue, in which case
the Hiring Party may continue the application process, or (ii) a request
that the Hiring Party cease and desist in the hiring or employment of the
applicant, in which case the Hiring Party shall immediately honor the
request. A failure to respond shall be construed as a waiver
pursuant to clause (i) above. Further, each Party will use
commercially reasonable efforts to ask any applicant that is or was an
employee of the other Party to obtain a waiver from the other Party
pursuant to any non-compete agreement or other restriction on employment
in effect with the other Party.
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8.9.
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Other. No
waiver or breach of any provision of these General Terms & Conditions
or an Agreement (a) will be effective unless made in writing, or (b) will
operate as or be construed to be a continuing waiver of such provision or
breach. In the event any portion of these General Terms &
Conditions or an Agreement is held to be invalid, the same will not affect
in any respect whatsoever the remainder of these General Terms &
Conditions or the Agreement, as appropriate. Each Party is an
independent contractor of, and is not an employee, agent or authorized
representative of, the other Party. The provisions of these
General Terms & Conditions and any Agreements will not in any respect
whatsoever be deemed to create a partnership, joint venture, or other
business combination between DR and the Company. Except as may
be expressly provided in an Agreement, neither Party shall have the right,
power or authority to act or create any obligation, express or implied, on
behalf of each other. Notwithstanding any applicable statute of
limitations, the Parties agree that any claims for breach of these General
Terms & Conditions or an Agreement will be brought by a Party within
two (2) years of the date that Party first has notice of the existence of
such breach. No provisions in either Party’s purchase orders or
other business forms will modify, supersede or otherwise alter the terms
of these General Terms & Conditions or an Agreement. The
Parties acknowledge and agree that these General Terms & Conditions
and any Agreements have been negotiated by the Parties and their
respective counsel, and will be interpreted fairly in accordance with its
terms and without any strict construction in favor of or against either
Party based on draftsmanship of the General Terms & Conditions or an
Agreement or otherwise. Headings are for reference purposes only and shall
not affect the meaning or interpretation of these General Terms &
Conditions or any Agreement. DR may engage the services of
subcontractors or agents to assist DR in the performance of its
obligations and will be responsible for the acts and omissions of such
subcontractors and agents. Any reference to a section will
refer to all subsections of that section. These General Terms
& Conditions and each Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all of
which will be one and the same document. A copy (including PDF)
or facsimile of a signature will be binding upon the signatory as if it
were an original signature. These General Terms &
Conditions and each Agreement will not become binding on either Party
until each Party has received a counterpart executed by the other
Party.
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IN
WITNESS WHEREOF, the duly authorized representatives of the Parties have
executed these General Terms & Conditions as of the dates set forth below,
to be effective as of the Effective Date.
|
DR:
Digital River, Inc.
|
Company: Sonic
Solutions
|
|||
|
By:
|
/s/ Xxxxx Xxxxxxx |
By:
|
/s/ Xxxx Xxxxxx | |
|
Name:
|
Xxxxx Xxxxxxx |
Name:
|
Xxxx Xxxxxx | |
|
Title:
|
Vice President and General Counsel |
Title:
|
Senior Vice President and General Counsel | |
|
Dated:
|
February 28, 2006 |
|
Dated:
|
February 21, 2006 |
|
v1.0a
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Confidential
— Subject to NDA
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7 of 8
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General
Terms &
Conditions
|
Appendix
1 to General Terms & Conditions
Definitions
The
following definitions will be applicable to the General Terms & Conditions
and any Agreement(s). As a general rule, terms are defined in bold where used in the General
Terms & Conditions and Agreement(s) and appear within the text of the
General Terms & Conditions and any Agreement(s) in Initial Caps
Italics. Any italicized terms not defined herein shall have
the meanings afforded to them in the Agreement in which such terms are
defined.
Affiliate: Any
entity which directly or indirectly owns or controls, is owned or controlled by,
or is under common ownership or common control with the Party in question, as
the case may be.
Confidential
Information: The inventions, trade secrets, computer software
in both object and source code, algorithms, documentation, know how, technology,
ideas, and all other business, customer, technical, and financial information
owned by DR or Company, which is designated as confidential, or communicated in
such a manner or under such circumstances as would reasonably enable a person or
organization to ascertain its confidential nature.
Documentation: All
computer readable and/or printed instructions, manuals and other materials
normally provided from time to time by Company to End Users for use of the
Products, and all
subsequent versions thereof provided to DR pursuant to these General Terms &
Conditions.
DR
Materials: Computer readable materials and/or encryption
software provided by DR for inclusion in an electronic package containing the
Software, Documentation, and XXXX, all of which materials,
including all Rights,
will be exclusively owned by DR.
End
Users: Person(s) or organization(s) that acquire a Product for use rather than
resale or distribution.
End User License Agreement
(XXXX): The computer readable and/or printed license agreement
provided by Company to End
Users that governs the use of the Products by End Users, and which is to be
included with each copy of the Product sold by DR
xxxxxxxxx.
Non-Software
Product: Any Product provided by Company
for distribution by DR which is not Software.
Product(s): A copy
of the Software and/or
Non-Software Product, Documentation, and XXXX, if any, packaged in
computer readable form together for electronic delivery on xxx.xxxxxxxxxxxx.xxx
(or equivalent) and/or in tangible packaged form for delivery in accordance with
these General Terms & Conditions, as identified in an Exhibit which may from
time to time be modified in accordance with the provisions of these General
Terms & Conditions.
Related Party: Any
person, organization or entity distributing Company’s Products through an agreement
between that person, organization or entity and DR.
Rights: Any and all
rights of copyright, patent rights, trademark and service mark rights, trade
secret rights, trade dress rights, character rights, artistic and moral rights,
and any and all other proprietary rights of any kind whatsoever, together with
associated registration rights and rights to sue for and collect damages for any
infringement or violation of any of the foregoing.
Software: The
executable object code for Products, including all
subsequent versions thereof provided to DR pursuant to these General Terms &
Conditions.
Trademarks: The
trademarks, service marks, trade dress, trade names, and logos used by DR and/or
Company, as applicable, in connection with DR’s performance under these General
Terms & Conditions, Company’s website, or the Products.
Transaction: The sale of one or more Product(s) and/or other products or services
offered by DR under an Agreement to an End
User through a single
order.
Work Product: All
HTML files, Java files, graphics files, animation files, data files, technology
scripts and programs, both in object code and source code form, all technology,
methods, processes, documentation, and any and all other materials or
information prepared by, provided by, or used by DR in the course of performing
its obligations under these General Terms & Conditions or any Agreement or
Exhibit, including any modifications to any materials, and any other development
tools customarily used by DR in connection with its performance of its
obligations for its other customers and clients; together with any modifications
or improvements to any of the foregoing, any of which may be made at any time by
DR in its sole discretion; and all of which, including all Rights will be
exclusively owned by DR. Nothing in the foregoing provision is
intended to convert into Work
Product Company’s XXXX, Products, Documentation or other
materials prepared or provided by Company (or Rights therein).
|
v1.0a
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— Subject to NDA
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Reseller
Agreement
|
|
Effective Date:
|
August
18, 2005
|
|
Company:
|
Sonic
Solutions (a California corporation), 000 Xxxxxxx Xxx, Xxxxxx, XX
00000
|
|
Site:
|
xxxx://xxx.xxxxxxxxxxxxxx.xxx,
xxxx://xxx.xxxxx.xxx, xxxx://xxx.xxxxx.xxx
|
|
Store:
|
xxxx://xxx.xxxxxxxxxxxx.xxx
|
As of the
Effective Date, DR will
resell Company’s products as the merchant of record through a Store created, owned, hosted
and maintained by DR in accordance with the terms of this Agreement and all
Appendices attached hereto, and the General Terms & Conditions between the
Parties dated effective as of August 18, 2005 which are incorporated by
reference into this Agreement. This Agreement shall be void and of no
force or effect if the Parties have not executed the General Terms &
Conditions as of the date of execution of this Agreement. The Parties
may enter into one or more Exhibit(s) to this Agreement setting forth additional
obligations between the Parties, provided such Exhibit(s) specifically reference
this Agreement. The Parties agree as follows:
Product and Pricing
Information
|
Product
|
Suggested
Retail Price
|
Margin
Percentage
|
Responsible for
Delivery:
DR or Company
(C)
|
Method of Delivery:
Digital (D),
Physical (P), or Both (B)
|
||||
|
[As
previously provided]
|
[As
previously provided] |
[***]
|
[As
previously provided]
|
[As
previously
provided] |
DR's
Margin Percentage will
apply for all products sold via digital delivery and will not be less than [***]
Dollars USD ($[***]) for physical delivery, as long as Company maintains an
Average Order Value
greater than [***] Dollars USD ($[***]) on the Store(s) for the month. In
the event that Company's Average Order Value for a
given calendar month drops below [***] Dollars USD ($[***]), then (a) DR will
notify Company of such decrease within five (5) days after the end of such
month, and (b) in the event that, for the immediately following month, Company’s
Average Order Value
remains below [***] Dollars USD ($[***]), then the DR Discount will be no less
than [***] Dollars ($[***]) per Product sold via digital
delivery or physical delivery during that second month, and the Margin Percentage on such
Products shall
automatically be adjusted accordingly. For the avoidance of doubt, “Average Order Value” will
calculated as aggregate Sales
Price for Products purchased by End Users during a given
calendar month through all of Company’s Store(s) divided by total
Transactions through
Company’s Store(s) for
that calendar month.
Notwithstanding
the Margin Percentage
set forth above, DR agrees that the purchase price of a Product by DR from Company
shall (subject to any additional discounts or amounts set forth in the any
Exhibit to this agreement and other amounts earned by DR as set forth in this
Agreement) in all circumstances be the greater of: (i) the Net Purchase Price for that
Product; and (ii) the
Base Price for that
Product.
|
Set-Up Costs
|
||
|
·
Set Up Cost (Original Stores):
|
$[***]
(the “Original
Stores” consist of the following seven (7) Stores, with the
language to be enabled on each such Store listed in
(parenthesis): (1) North America (English); (2) England
(English); (3) France (French); (4) Italy (Italian); (5) Germany (German);
(6) Spain (Spanish); (7) Taiwan (Chinese – either Mandarin or
Cantonese))
|
|
|
·
Set-Up Cost (each additional Stores):
|
$[***] (estimated; to be
approved by DR and Company in writing prior to inception of
work)
|
|
|
Costs of Services
|
||
|
·
Monthly Hosting Cost:
|
[***]
|
|
|
·
Free Order Processing Cost:
|
$[***]
per digital order/$[***] per physical order
|
|
v1.0b
(050808)
|
DR
Confidential — Subject to NDA
|
Page
1 of 7
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[***]
Omitted pursuant to a confidential treatment request. The
confidential portion has been filed separately with the SEC.
|
|
Reseller
Agreement
|
|
·
Domestic Customer Service:
|
$[***]
per minute utilization; $[***] per email
|
|
|
·
International Customer Service:
|
$[***]
per minute utilization; $[***] per email
|
Optional Services
(Initial on Line to Accept)
|
Money
Order/Check/Wire Transfer Acceptance Cost – Included
|
|
|
Electronic
Payment – ACH/Wire Transfer - $25.00 per U.S. payment/$50.00 per
International payment
(attach
banking info)
|
Reseller
Agreement Additional Terms & Conditions
DR’s Rights and
Obligations
|
·
|
Notwithstanding
anything to the contrary, DR will be the seller and merchant of record for
all Product sales
to End Users
through the Store
maintained by DR for Company. DR may, in its sole discretion,
set the price or license fee at which Products will be
offered to End
Users for sale. Title to all Products will remain
with Company until DR processes a Transaction by an End User, at which time
DR purchases the applicable Product(s) from
Company, and title to those Products will pass to
DR for immediate subsequent passage to the End User. Transactions will be
processed, and payments will be made in accordance with the provisions of
Appendix 2 to this Reseller
Agreement.
|
|
·
|
DR
will establish and maintain Store and the Cart to Company’s
reasonable specifications. Those portions of the Store other than the
Cart will include
agreed-upon DR marketing and promotional literature but will not include
DR’s name, logo or other identifying mark without Company’s prior
consent. In connection with checkout pages of the Store and the Cart, DR shall place
links to its (a) privacy policy, (b) terms and conditions of sale, (c)
disclosure of DR as the seller to End Users and (d) the
text of pages which are utilized in connection with the Cart, provided that,
and subject to DR’s right to make the final decision as to such matters,
DR xxxx collaborate with Company, seek Company’s input, and otherwise
involve Company in any decisions regarding such matters. Each
party agrees to act in good faith and to cooperate in order to reach
agreement regarding the privacy policy, terms and conditions of sale, and
disclosure of DR as the seller, as well as the text of any other required
disclosures to End Users
included on the pages which are utilized in connection with the
Cart. Notwithstanding
such good faith efforts, in the event that the parties are unable to agree
as to any such matters and DR includes disclosures in the Cart or on the checkout
pages of the Store that are
unacceptable to Company, Company may, as its sole remedy, terminate this
Agreement, provided that (a) Company shall ensure that any decision by
Company to terminate has been made by a Company executive at least at the
Senior Vice President level after an escalation procedure that includes
face-to-face executive level consultation between the parties, and (b) DR
shall have no less than ten (10) business days after such face-to-face
meeting within which to reverse any action that caused the Company to seek
to terminate under this provision or make any changes to the disclosures
in the Store or
Cart agreed upon
by the executives at that meeting. For the avoidance of doubt,
Company shall be permitted to include a link to its own privacy policy in
the Store,
notwithstanding any link to DR’s privacy policy that may be included
within the Store
as described above. Subject to Company’s ownership of all
content and other materials provided by or on behalf of Company and
included in the Store, DR will retain
ownership of the Store.
|
· DR will
post “opt-in” or “opt-out” language (at Company’s election) on the checkout page
of the Store, providing
each End User with an opportunity to elect to receive solicitations from
Company. DR will provide a copy of all customer information, except
DR will not provide any End
Users’ credit card-specific information to Company (such as credit card
number or expiration date, but not, for the avoidance of doubt, name or address)
(all such information provided, “End User
Data”). Company represents, warrants and covenants that it
shall not use any End User
Data to solicit any End
User who has not opted in to receive, or opted out of receiving (as
appropriate), such solicitations from Company. DR will not provide
any of End User Data to any person, or use
the End User Data for any purpose (other
than for DR’s legitimate internal business purposes in connection with this
Agreement at any time during the term or after the termination of this
Agreement, specifically including ongoing fraud control for all DR clients
generally, customer service, and optimizing marketing best practices for DR
clients by using information in an aggregate, anonymous form only, but
specifically excluding marketing to such End Users using the End User Data provided
through the Store)
without Company’s advance consent, except if Company’s Products are distributed by
Channel Partners
pursuant to another Agreement between the Parties, Channel Partners may have
rights of use of End
User Data
relating to Transactions through such
Channel
Partners.
|
v1.0b
(050808)
|
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Confidential — Subject to NDA
|
Page 2
of 7
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[***]
Omitted pursuant to a confidential treatment request. The
confidential portion has been filed separately with the SEC.
|
|
Reseller
Agreement
|
|
·
|
DR
will provide Company with the Digital River Command Console and associated
remote control tools; email marketing campaigns to Company’s user base as
mutually agreed upon by the Parties in writing; and online reporting via
the DR administrative interface. DR will screen all Transactions processed
through the Store using its fraud screening
system.
|
|
·
|
DR
will assign an Account Development Manager (“ADM”) to serve as
Company’s primary point of contact for the Store, accounting, marketing,
and other administrative issues related to this Agreement. DR
will provide account management services by ADMs to assist Company
in the normal maintenance of the Store at a rate of One
Hundred and Eighty-Five Dollars ($185.00) per hour. Any and all
expenses incurred by DR in connection with the provision of the
maintenance services specified in this Agreement will be deducted from the
Sales Price of
Products to
reflect an additional portion of the DR
Discount. The performance of the maintenance services
will be scheduled in such manner and at such times as may be mutually
agreed upon by DR and the Company.
|
|
·
|
DR's
policy is to provide End Users with a thirty (30) day right to return
Products for a
refund of the purchase price paid by the End User. DR
shall process returns and refunds initiated by Company’s support
team. This policy with respect to Company’s Stores is subject to
modification from time to time by the mutual agreement of DR and
Company. DR xxxx xxxxxxxxx and assist Company and End Users with respect
to Product
returns. DR and Company shall discuss in good faith additional
steps which may be taken to reduce
returns.
|
|
·
|
All
requested and mutually agreed upon web site programming, design, and
changes made after the initial Store setup, excluding
changes to make normal price changes, product additions, and version
updates, account maintenance services, and any services not specifically
set forth in this Agreement or any other Agreement between the Parties,
will be agreed upon in writing via DR’s Change Order Form available from
DR upon request, and will be charged to Company on a time and materials
basis at DR’s then-current rate.
|
|
·
|
In
the event of a conflict between any Product-specific
information in this Agreement and information subsequently provided by
Company via the DR administrative interface, the information provided via
the DR administrative interface will
control.
|
|
·
|
Through
August 18, 2006 (the “Exclusivity Period”), DR
will be the exclusive provider of online commerce services through which
Company sells its products directly to end-users. For the
avoidance of doubt, this exclusivity does not apply to other sales
channels (for example, OEM and other non-direct-to-consumer sales such as
VLP) or to brick & mortar sales or sales of non-Company
products. Furthermore, during the Exclusivity Period,
Company will make good faith efforts to involve DR in additional business
opportunities that may arise.
|
|
·
|
For
a period a three (3) months from the date of termination of this Agreement
(the “Winding-Down
Period”), DR and Company shall continue to perform their respective
obligations under this Agreement in order for Company to effectuate a
transition from DR to an alternative commerce service
provider. DR shall provide reasonable assistance to Company in
transitioning its business from DR to an alternative provider during the
Winding-Down
Period. Company may end the Winding-Down Period at
any time upon notice to DR. DR is under no obligation to extend
the Winding-Down
Period.
|
|
·
|
DR
shall provide to Company a SAS-70 Type II report produced on an annual
basis, to be delivered to Company in each year promptly following DR’s
receipt of the final report for that year, covering the internal controls
related to measurement/valuation, completeness, timeliness, and
occurrence/existence of sales through DR’s systems, as well as the
safeguarding of Company’s software/intellectual
property.
|
|
·
|
DR
shall provide the Store in connection with the terms set forth in the
Service Level Agreement attached hereto as Appendix
3.
|
Company’s Rights and
Obligations
|
·
|
Company
grants DR a right and license to: (i) package, reproduce and distribute
within the Territory, the Products to the End Users as specified
in this Agreement; and (ii) use the Company’s Trademarks solely in
connection with the reproduction, packaging, promotion, and distribution
of the Products,
in a manner reasonably specified by Company and as otherwise permitted by
written agreement between DR and Company (which, in the case of Company,
must be executed by an officer of
Company).
|
|
·
|
Company
will deliver the current versions of the Products to DR
immediately following execution of this Agreement. Accordingly,
Company will provide DR with (i) for Products delivered
electronically, copies of the Software on a gold
master and the XXXX for each such
Product in
computer readable form; (ii) for Products delivered
physically, an inventory of Product prepackaged and
ready for shipment, appropriately labeled for use in the Territory and with all
certifications, approvals and authorizations needed for use in the Territory, to be held
by DR to fulfill orders for such Product; (iii)
additional inventory as needed by DR from time to time; (iv) Product specification
information in a single file, self extracting archive format, or in
another mutually agreeable computer readable form that can be accurately
reproduced by DR; (v) Documentation in a
computer readable form mutually agreeable to the Parties that can be
accurately reproduced by DR; and (vi) any other information, items and
materials reasonably required by DR to enable it to distribute the Products. Company
will be responsible for the expense associated with, and will bear the
risk of loss for, all shipments of tangible Products to
DR.
|
|
v1.0b
(050808)
|
DR
Confidential — Subject to NDA
|
Page 3
of 7
|
|
|
Reseller
Agreement
|
|
·
|
Company
will provide to DR copies of all new releases, updates, or revisions to
Software and
Documentation
within a commercially reasonable period of time prior to general release
and on or before the date the improved versions are offered to any other
distributor or reseller. All shipments of tangible Products to DR will be
clearly labeled with DR’s purchase order number on the outside of the
box. DR will have no liability of any kind whatsoever as a
result of any delay in the delivery of Products by Company, or
the delivery of non-conforming tangible Product.
|
|
·
|
If
Company wishes to have DR distribute a new product, Company shall provide
an operational sample for evaluation. If Company wishes to have
DR distribute an existing product not currently
listed as a Product
in this Agreement, Company will provide DR with the requested
information via the “Digital River Online Company Services Page” at xxxx://xxx.xxxxxxxxxxxx.xxx
(or equivalent), at which time such products will be deemed to be added to
this Agreement and will be construed as a Product. Notwithstanding
the foregoing, DR may elect not to distribute any Product which DR
reasonably believes represents a business or legal risk to DR, or is not
consistent with DR’s criteria for products distributed by DR.
|
|
·
|
Company
will establish and maintain a privacy policy for the Site which advises
End Users that
their personal information (including credit card information) may be
provided to Company’s subcontractors and agents in connection with the
processing and fulfillment of orders through the Site, and will ensure
that it complies with any data privacy or other applicable laws or
regulations regarding the transfer of information relating to End Users to DR (and to
Channel Partners
if so allowed by Company in an separate
Agreement).
|
|
·
|
Company
will be solely responsible for providing all support relating to the
purchase and download of Products by End
Users. DR shall forward any support requests it may
receive by email to Company at an email address to be provided by Company,
and shall provide any End Users contacting DR
customer support via telephone with Company’s customer telephone support
contact information to be provided by Company. DR shall charge
Company for any calls and emails so handled by DR at the rates set forth
above, except as set forth below.
|
DR shall
not charge Company any fees for customer support for a certain period following
the execution of this Agreement, such period to end at such time as all Original Stores have been
fully transitioned and are made generally available for use to End Users exclusively via
DR’s Pacific platform (such period, the “Transition
Period”).
|
·
|
Company
will be solely responsible for (a) the terms and conditions of any and all
EULAs, their
compliance with applicable laws and regulations within the Territory, (b)
Company’s performance of its obligations under any and all EULAs, and (c) the
provision of support and responsibility for warranty obligations relating
to Products in
accordance with Company’s support policy but in no event inconsistent with
the terms and conditions of the applicable XXXX.
|
|
AGREED
TO AND ACCEPTED BY:
|
||
|
SONIC
SOLUTIONS
|
DIGITAL
RIVER, INC.
|
|
|
/s/ Xxxx Xxxxxx
|
/s/ Xxxxx Xxxxxxx
|
|
|
Signature
|
Signature
|
|
|
Xxxx Xxxxxx, Senior Vice President and General
Counsel
|
Xxxxx Xxxxxxx, Vice President and General
Counsel
|
|
|
Printed
Name & Title
|
Printed
Name & Title
|
|
|
February 21, 2006
|
February 28, 2006
|
|
|
Date
|
Date
|
|
v1.0b
(050808)
|
DR
Confidential — Subject to NDA
|
Page 4
of 7
|
|
|
Reseller
Agreement
|
Appendix 1 to Reseller
Agreement
Definitions
The
definitions in this Agreement and the General Terms & Conditions will be
applicable to this Agreement and any Exhibits to this Agreement entered into by
the Parties. As a general rule, terms are defined in bold in the Agreement and
General Terms & Conditions and appear within the text of the General Terms
& Conditions, the Agreement and any Exhibits in Initial Caps
Italics.
Base Price: For
each Product, the
amount equal to the Suggested
Retail Price for that Product less the applicable
Margin
Percentage.
Cart: Those
portions of the Store
forming the purchase process for Products, including without
limitation the “shopping cart” identifying the products to be purchased, the
Transaction, and the
confirmation of the Transaction. The Cart shall not include those
portions of the Store
providing information and pricing on Products which are not part
of the purchase process.
Channel
Partner: Any person, organization or entity engaged by DR to
facilitate or make sales of the Products, where Company has
agreed to allow for distribution of its Products through Channel Partners pursuant to
a separate Agreement.
DR Discount: The
total amount payable to DR associated with Product sales, and marketing,
customer support and other services provided to Company in relation to the Product sales, under DR’s
general obligations as set out in this Agreement, including without limitation
Account Management
Costs, Costs of
Services, Optional
Services, and the
Margin Percentage.
Margin
Percentage: The percentage of the Sales Price which is earned
by DR on Host Sales, as
determined on a monthly basis as set forth in Appendix 2.
Host Sales: Sales
of the Products
originating from the Site.
Net Purchase
Price: The purchase price of the Products as between Company
and DR being the Sales
Price less the DR
Discount and other associated costs or amounts earned by DR.
Sales Price: The
gross dollar amount received by DR for a Host Sale, less any amounts
received for shipping and handling, sales or use taxes, valued added or other
Transaction-based
taxes, import or export duties or fees, all of which will be retained by
DR.
Site: Company’s
world wide web site, as identified on the first page of this
Agreement.
Store: The DR owned
and constructed World Wide Web site from which Company’s Products may be purchased by
End Users from DR as
the merchant of record. The proposed URL for the Store is shown on
the first page of this Agreement.
Store Live
Date: The date on which Company’s Products are first made
available for sale to End
Users in the Store to be made available to
the public over the Internet under this Agreement.
Suggested Retail
Price: The amount Company publishes as the stated price for
End User purchases of
Products. If
Company specifies one or more promotional price(s) for a Product in connection with a
sales promotion of that Product, for the duration of
such sales promotion the Suggested Retail Price shall
be the promotional price(s).
Territory: All
countries in the world except (i) countries to which export or re-export of any
Product, or the direct
products of any Product, is prohibited by
applicable law without first obtaining the permission of the applicable export
authorities or their successor, and (ii) countries that may be hereafter
explicitly excluded pursuant to the terms of this Agreement.
|
v1.0b
(050808)
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Confidential — Subject to NDA
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Page 5
of 7
|
|
|
Reseller
Agreement
|
Appendix
2 to Reseller Agreement
Processing
and Payments
For each
copy of a Product sold
and delivered to an End
User, DR will be responsible for the processing of payments made by End Users. Amounts collected
by DR will be deposited in an account established, owned, and maintained by DR.
DR will be solely responsible for the payment of any and all credit or other
payment card interchange, discount, processing, transaction and similar
fees.
With
respect to Transactions, in states
within the United States where DR has nexus for sales or use tax purposes, DR
will be solely responsible for the preparation and filing of any and all sales
or use tax return, and the payment of any and all sales or use taxes, together
with any and all related interest and penalties. In any non-US
jurisdiction where DR is subject to value added tax, goods and services tax or
any similar taxes, DR will be solely responsible for the preparation and filing
of any and all tax returns related to such tax collected, and the payment of any
and all such VAT, GST or similar taxes, together with any and all related
interest and penalties. DR will not be liable for any sales, use,
VAT, GST or similar taxes in any state within the United States (or applicable
foreign jurisdiction) where DR does not have nexus, a fixed establishment, or is
otherwise not subject to tax.
Except as
set forth above, Company shall be responsible for any taxes imposed on DR’s
performance of its obligations hereunder (excluding taxes based on the gross or
net income of DR), and for any taxes imposed on the sale or licensing of Products from Company to DR
(or Company’s income derived therefrom). In no event shall DR be responsible for
any tax based on Company’s net income or similar basis, or the preparation of
any tax return related thereto. In the event DR is required to make
payment of any such taxes on Company’s behalf, DR will deduct the amount of such
taxes from any amounts due Company, or invoice Company for such taxes paid, at
its option.
Within
five (5) business days after the end of each calendar month, by electronic
and/or facsimile transmission, DR will notify Company about Transactions for which
payment by DR is processed during the previous calendar month (the “Processing Report”). With
respect to Host Sales,
the Processing
Report will
contain the names and delivery addresses of the End Users, and the names,
Product numbers, and quantity of
the Products sold by DR to particular
End Users. Within
thirty (30) days after the end of each calendar month, DR will pay to Company
the Net Purchase Price
for Products which DR sold during
such immediately preceding calendar month net of Products returned during such
immediately preceding calendar month. DR shall be entitled to include
as additional portion of the DR Discount, any out-of pocket fees
or costs incurred by DR necessary in order to permit or allow the delivery of
Company’s Products
(e.g., import fees). DR will also be permitted to deduct any and all
other fees, charges, or expense amounts due (or reimbursable to) DR as described
in this Agreement from the amount due to Company.
Under no
circumstances will DR be obligated to pay any amount to
Company in connection with (a) any chargebacks or (b) any activities that are
deemed to be fraudulent or criminal, provided however, DR agrees to pay to
Company the Net Purchase Price for fraudulent transactions in each calendar
month in excess of a [***] percent ([***]%) fraud rate, calculated as fraudulent
and other charge backs processed in that calendar month divided by the aggregate
Sales Price of Host Sales for that calendar
month. DR will use commercially reasonable efforts to screen for, detect,
prevent, and take such other actions as it deems reasonably necessary to prevent
any fraudulent activity. The existence of fraud, or the possibility of the
existence of fraud, will be determined in the sole discretion of DR, and DR may,
in its sole discretion, make such inquiries and investigations as it deems
appropriate under the circumstances. Pending such inquiries and investigations,
DR will have no obligation to make payment to Company of any amount associated
with such inquiries and investigations.
Any
amounts invoiced to Company by DR which are not subject to a bona fide dispute
shall be due and payable by Company thirty (30) calendar days from the date of
invoice, in a manner reasonably acceptable to DR. Undisputed late payments will
bear interest at the rate of one and one half percent (1.5%) per month, or the
maximum amount permitted by law, whichever is less. Company shall be
liable for all collection expenses incurred by DR, including reasonable
attorneys’ fees. Company’s dispute as to a portion of any invoice or
amount owed shall not give Company the right to withhold or delay payment of the
whole invoice or amount owed. Under no circumstances will the
provisions of this Agreement be deemed to require DR to distribute any Products that could, in the
reasonable discretion of DR, result in no, or an unacceptably small level of,
profitability for DR.
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Reseller
Agreement
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Appendix
3 to Reseller Agreement
Service
Level Agreement
DR shall
provide the Store with
at least [***] percent ([***]%) up time measured over each fiscal quarter
(“Uptime”).
For
purposes of calculating Uptime, “Downtime” shall be defined as
a lapse in availability that commences as of the time the service interruption
first occurs and ends when the service is fully restored or a workaround
identified and implemented. Downtime shall not include
any period of unavailability due to either (1) scheduled maintenance and/or
upgrades (provided that any scheduled maintenance or upgrade event that may
result in a loss of Uptime must meet the following requirements in order to be
excluded from Downtime: (a) DR must first have taken all
commercially reasonable efforts to avoid the interruption to Uptime (e.g., by
utilizing redundancy to maintain Uptime), and (b) DR must have provided
Company with as much advance notice of the time and date of the event as was
commercially feasible under the circumstances, or (2) any other event beyond the
control of DR which includes without limitation any external interruption of
major telecommunications (other than as a result of a failure to pay required
fees or other amounts by DR); the failure or substantial failure of the
Internet; or force majeure (including without limitation acts of God, terrorism,
natural disaster, war, riots, and labor strife). DR shall support the current
release of Internet Explorer (IE) for access to DR’s commerce
system.
DR agrees
to take reasonable industry standard precautions to mitigate the risk of Downtime, including but not
limited to using anti-virus and anti-trojan software; installing available
hardware and software patches; maintaining a firewall; backing up files
including off site backups, data and software regularly; implementing security
systems including intrusion protection systems and fire protection
systems; and maintaining redundant internet providers. DR will
maintain at minimum two (2) DS3 lines from separate vendors to handle traffic
from DR’s facility to the Internet.
Uptime for a fiscal quarter
is calculated in accordance with the following formula:
Uptime = (Total minutes per fiscal
quarter – Total minutes Downtime per fiscal
quarter)
(Total minutes per fiscal
quarter)
In the
event that DR’s Uptime
fails to meet the required percentage in any given quarter, DR will credit
Company the lost sales by calculating the average hourly sales rate during such
quarter and multiply this times the number of hours that are represented by the
Uptime shortfall. DR
will credit this amount to the Company’s account.
Exclusive
Remedy for Failure to Perform
Should DR
fail to meet its Uptime
commitment set forth herein in any two (2) fiscal quarters, Company’s sole and
exclusive remedy in addition to the credit set forth above shall be to terminate
this Agreement upon thirty (30) calendar days prior written notice to
DR. In the event Company fails to provide DR with notice of
such termination within forty-five (45) calendar days of the end of the fiscal
quarter giving rise to such termination right, Company shall be deemed to have
waived its right to terminate this Agreement for such failure (but shall have
the right to so terminate if the terms of this paragraph are met in any
subsequent fiscal quarter).
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confidential portion has been filed separately with the SEC.
Amendment
No. 2 To
Digital
River Reseller Agreement
THIS
AMENDMENT NO. 2 (the “Amendment”) is made this 1st day
of January, 2007 (the “Amendment Effective Date”), to that certain Digital River
Reseller Agreement dated August 18, 2005 (the “Agreement”), by and between Sonic
Solutions (“Company”) and Digital River, Inc. (“DR”). Unless
specified otherwise within this Amendment, all capitalized terms used in this
Amendment shall have the same meaning as they do in the Agreement.
Background
WHEREAS, pursuant to the terms
of the Agreement, DR operates certain Stores as a reseller of
Company’s Products (some
of which are electronically delivered to End Users and downloaded by
such End Users for their
use) and as merchant of record for Transactions; and
WHEREAS, the parties wish to
revise and add to the terms of the Agreement.
NOW,
THEREFORE, in consideration of the mutual promises, representations and
covenants set forth herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
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1.
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Backup CD
Exhibit. Company may (at its sole discretion) suspend
DR’s ability to offer DR’s Backup CD solution on a particular Store or Stores, upon fifteen
(15) business days written notice to DR. Following its receipt
of such notice, DR shall remove the offering of its Backup CD solution on
the affected Store(s) as soon as
commercially feasible. For those Stores for which
Company has suspended DR’s ability to offer DR’s Backup CD solution, Sonic
may provide backup CDs either directly or through a subcontractor of
Company, and may offer such backup CDs through such Store(s). Each
such Sonic-provided or Sonic subcontractor-provided backup CD offered for
a particular Company Product shall be
considered a separate Product for the
purposes of the Agreement.
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In the
event Sonic elects (in its sole discretion) to rescind its suspension for a
particular Store, Sonic
may provide DR with fifteen (15) business days notice of such election, in which
event (a) DR shall re-enable the offering of its Backup CD solution on the
affected Store(s) as
soon as commercially feasible following its receipt of such notice on the same
terms and conditions as such Backup CD solution is currently provided (all time
spent by DR personnel re-enabling the Backup CD solution shall be billed to
Company as maintenance services in accordance with the terms of the Agreement);
and (b) on or prior to the date DR recommences offering the Backup CD Solution
on the affected Store(s), Sonic shall cease
offering an alternative backup CD solution through the affected Store(s).
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2.
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SAS-70. The
second-to-last bullet under “DR’s Rights and Obligations (“• DR
shall provide to Company a SAS-70 Type II report….”) is hereby deleted in
its entirety and shall be of no further force and
effect.
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3.
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Development Partner
Credit. For the term of the Agreement, Company shall
serve as a DR Development Partner, which shall include the following
additional responsibilities: (a) the Parties shall meet regularly (but in
no event less than once per calendar quarter) to discuss mutual objectives
and initiatives, including without limitation review of test results,
Cart design, and
checkout process; and (b) Company shall allow DR to perform
champion/challenger testing of various Store and Cart designs suggested
by DR if both parties mutually agree via email that the test is warranted,
approvals shall not be unreasonably withheld, delayed or conditioned (DR
shall provide up to [***] ([***]) hours of engineering development time
per [***] at no additional cost to Company for new cart designs, layout,
and customer integration directly related to champion/challenger testing
performed pursuant to this clause (ii)). As consideration for
being a DR Development Partner, at the end of each calendar quarter DR
shall provide a credit to Company of One Hundred Thousand Dollars
($100,000) (the “Development Partner
Credit”), which shall be applied against amounts owed to DR for the
last month of that calendar quarter. For the avoidance of doubt, Company
is not entitled to direct payment or reimbursement for the Development Partner
Credit.
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CONFIDENTIAL
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[***]
Omitted pursuant to a confidential treatment request. The
confidential portion has been filed separately with the SEC.
In the
event Company fails to perform any of its obligations under this Section 3
during a calendar quarter and fails to cure such nonperformance within
twenty-one (21) calendar days of receipt of written notice from DR of such
failure, the Development
Partner Credit for such calendar quarter shall be waived.
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4.
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Construction.
Notwithstanding that this Amendment has been prepared by DR, Company and
DR confirm that this Amendment constitutes the understanding of the
parties and is intended to be construed in a manner that is consistent
with the subject matter and activities contemplated by the Agreement, and
the terms and conditions of the Agreement. No rule of strict
construction with respect to this Amendment shall be applied against
either DR or Company.
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5.
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Counterparts. This Amendment and
any subsequent amendment to the Agreement may be executed in several
counterparts and by each party on a separate counterpart, each of which,
when so executed and delivered shall be an original, but all of which
together shall constitute but one and the same instrument. A
fax signature or signature delivered as an imaged attachment to an e-mail
message shall be deemed equivalent to an original ink
signature. This Amendment (and any subsequent amendment) shall
not become binding on any party until all parties to the Agreement have
transmitted to the other party(ies) a counterpart executed by the
transmitting party.
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Other
than the changes set forth in the preceding paragraphs, all other terms and
conditions of the Agreement shall remain unchanged and in full force and
effect.
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the Amendment
Effective Date set forth above.
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COMPANY:
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DR:
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SONIC
SOLUTIONS
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DIGITAL
RIVER, INC.
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/s/ X. Xxxx Xxxxxxxx
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/s/ Xxx Xxxxxxxx
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Signature
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Signature
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X. Xxxx Xxxxxxxx, Executive Vice President and
Chief Financial Officer
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Xxx Xxxxxxxx, Chief Financial
Officer
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Printed
Name & Title
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Printed
Name & Title
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March 1, 2007
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March 13, 2007
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Date
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Date
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[The
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2
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CONFIDENTIAL
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