Exhibit 10.34
DISTRIBUTION AGREEMENT
FOR PLAYER PRODUCTS
This Distribution Agreement (the "Agreement") is made as of February 2,
2000 (the "Effective Date") by and between Liquid Audio, Inc. (Liquid Audio"),
and United Internet Technologies ("United Internet Technologies") a Delaware
corporation doing business at 0000 Xxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000
("Distributor").
The parties agree as follows:
1. DEFINITIONS.
(a) "Bundle" means the combination of the Liquid Audio Products and the
Distributor Products as packaged together or otherwise combined by Distributor
for distribution where such Liquid Audio Products are included on a tangible
medium.
(b) "Distributor Products" means the Distributor products, as amended
from time to time specified in the Distributor Products Attachment attached as
Exhibit B hereto subject to amendment.
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(c) "End User Agreement" means Liquid Audio's standard end user agreement
for the Liquid Audio Products, in such form as Liquid Audio may determine from
time to time in its sole discretion. The End User Agreement is incorporated by
Liquid Audio into the Liquid Audio Products and is displayed to an end user
when such end user downloads or installs the Liquid Audio Products.
(d) "Liquid Audio Products" means object code versions of those Liquid
Audio products listed in the Liquid Audio Products Attachment attached as
Exhibit A hereto and those additional Liquid Audio products, if any, that may
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from time to time be added by mutual written agreement of the parties, and all
associated Liquid Audio end-user documentation and manuals. Any modifications,
additions, or adaptations to the Liquid Audio Products that are made available
to Distributor by Liquid Audio, if any, in order to customize the Liquid Audio
Products for use with the Distributor Products or for any other reason will be
considered part of the "Liquid Audio Products."
2. DISTRIBUTION.
(a) Subject to the terms of this Agreement, Liquid Audio grants to
Distributor a limited, non-exclusive, worldwide, royalty-free, non-transferable
license to reproduce, market and distribute the Liquid Audio Products solely as
part of the Bundle.
(b) Distributor will reproduce, market and distribute all Bundles
accurately and in a manner that is consistent with the "Summary of Requirements
for Use of Dolby Marks" attached as Exhibit C hereto (the "Summary
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Requirements"), and to the extent not in conflict with the Summary Requirements,
consistent with the quality standards Distributor uses for its own products.
Distributor will provide Liquid Audio with five (5) units of each version of the
Bundle.
(c) Except as specified in subsection (a) above, Distributor will have no
right to make, distribute or promote any copies of the Liquid Audio Products or
any portion of them, nor, except as required by law, any right to modify,
decompile, recompile, disassemble, reverse engineer, or make or distribute any
other form of, or derivative work from, the Liquid Audio Products, or authorize
or assist any third party to do any of the foregoing. Distributor will not use
the Liquid Audio Products to provide service bureau, time sharing or other
computer services to third parties. All rights not expressly granted to
Distributor in this Agreement are retained by Liquid Audio and its licensors.
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(d) Distributor will submit quarterly reports to Liquid Audio
fully documenting the sales and distribution of all Bundles. Distributor shall
refer to Liquid Audio all inquiries and requests for additional information
regarding Liquid Audio products.
(e) All licenses of the Liquid Audio Products to Distributor's
customers shall be subject to an End User Agreement and shall run directly from
Liquid Audio to such customers.
(f) Distributor may appoint sub-distributors upon providing reasonable
advance written notice to Liquid Audio. Each sub-distributor (a
"Sub-Distributor") shall execute an agreement with Distributor that includes
terms and conditions at least as protective of Liquid Audio's, and its
licensors', rights in the Liquid Audio Products and in all related intellectual
property, as the terms and conditions of this Agreement.
(g) Distributor shall provide Liquid Audio with samples of all
advertising and promotional materials and documentation to the extent that they
relate to the Liquid Audio Products, and prior to any use, Distributor must
request Liquid Audio's written approval of all such materials and documentation
and Liquid Audio must provide such approval or denial within 48 hours. If
Liquid Audio does not provide such written approval or denial within 48 hours
from the time request is received by Liquid Audio, approval shall be deemed made
by Liquid Audio.
3. INTERNET MARKETING. All marketing of the Liquid Audio Products by
Distributor over the Internet shall be accomplished by means of Distributor
providing its customers with access to a World Wide Web page containing a
hypertext link pointing to a URL address specified by Liquid Audio. The address
will specify a web page which will allow such customers to download the Liquid
Audio Products in accordance with Liquid Audio's then-current terms and
procedures.
4. DELIVERY OF LIQUID AUDIO PRODUCTS. Liquid Audio will deliver to
Distributor a master copy of the Liquid Audio Products within ten (10) days of
the Effective Date of this Agreement.
5. WARRANTIES; SUPPORT AND SERVICES.
(a) Liquid Audio will warrant the Liquid Audio Products directly to
Distributor's end user customers in accordance with the terms and conditions of
the End User Agreement.
(b) THE WARRANTIES OF LIQUID AUDIO IN THIS AGREEMENT ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS AND IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.
(c) Subject to payment by Distributor's end user customers of Liquid
Audio's then-current maintenance and support fees, Liquid Audio will provide
Distriubutor's end user customers of the Bundle with the same level and extent
of service and support that Liquid Audio generally provides to its other end
user customers of the Liquid Audio Products.
6. COPYRIGHT NOTICES/TRADEMARKS. Subject to the terms of this Agreement,
Liquid Audio grants to Distributor a non-exclusive, non-transferable, worldwide
license to use the Liquid Audio trademarks set forth on the Liquid Audio
Products Attachment (the "Trademarks") and to use the Dolby Marks, as defined in
the Summary Requirements attached hereto, solely in connection with marketing
and distribution of the Bundle and the marketing of Liquid Audio products on the
Internet. Distributor agrees to prominently incorporate the Trademarks on the
packaging and on all promotional materials and documentation for the Liquid
Audio Products. Distributor's use of the Trademarks under this Agreement will be
subject to Liquid Audio's then current trademark usage guidelines. Distributor
will not seek to register the Trademarks in any jurisdiction. Distributor will
at all times comply with the terms of the Summary Requirements.
7. TERM. This Agreement will commence on the Effective Date and will
continue in effect unless earlier terminated by the parties as provided herein.
8. PROPRIETARY RIGHTS AND CONFIDENTIALITY.
(a) Distributor will at all times respect, protect, and not infringe
upon Liquid Audio's or its licensor's patents, copyrights, trade secrets,
trademarks, or other proprietary rights. Distributor will not obscure, and will
accurately reproduce any serial numbers or patent, trademark or copyright
notices, on and in the Liquid Audio Products. Distributor will not include
trade names or trademarks of Liquid Audio in any trade name under which such
party does business.
(b) Distributor acknowledges that the Liquid Audio Products contain
proprietary trade secrets and confidential information (collectively,
"Confidential Information"). Distributor agrees that: (i) it will not disclose
to any third party or use any Confidential Information except as expressly
permitted in this Agreement, and (ii) it will take all reasonable measures to
maintain the confidentiality of all Confidential Information in its possession
or control, which will in no event be less than the measures it uses to maintain
the confidentiality of its own information of similar importance. Confidential
Information will not include information that (i): is in or enters the public
domain without breach of this Agreement; (ii) the Distributor lawfully receives
from a third party without restriction on disclosure and without breach of a
nondisclosure obligation; or (iii) the Distributor develops independently based
on its written records. Distributor acknowledges that any breach of this Section
8(b) would cause irreparable harm to Liquid Audio, and that without limiting
Liquid Audio's remedies hereunder, in such event Liquid Audio shall be entitled
to injunctive and other appropriate equitable relief.
9. RELATIONSHIP OF THE PARTIES. The relationship between Distributor and
Liquid Audio will be that of licensor and licensee, as independent contractors.
Nothing contained in this Agreement will constitute Distributor the partner,
broker, employee or agent of or for Liquid Audio. Neither party hereto will
have any right to make any warranties or to incur any liabilities or obligations
on behalf of or binding upon the other party, or the other party's licensors.
10. REPRESENTATIONS AND WARRANTIES.
(a) Liquid Audio represents and warrants that (i) it has all necessary
corporate right, power and authority to enter into this Agreement and perform
its obligations hereunder; (ii) this Agreement is valid, binding and enforceable
against Liquid Audio; and (iii) the Liquid Audio Products do not infringe or
violate any copyright or trade secret of any third party.
11. INTELLECTUAL PROPERTY INDEMNIFICATION.
(a) Liquid Audio will defend, hold harmless and indemnify Distributor
from and against all third party claims, damages, costs, or expenses (including
reasonable attorneys' fees) suffered or incurred by Distributor in connection
with a breach of Liquid Audio's representations and warranties set forth in
Section 10(a) above ("Warranty Claims"), provided that Distributor will promptly
notify Liquid Audio of any Warranty Claims, will cooperate with Liquid Audio in
good faith in the defense of such claims, and will permit Liquid Audio to have
sole control of the defense of any Warranty Claims.
(b) If Distributor's use of any of the Liquid Audio Products under the
terms of this Agreement is, or in Liquid Audio's option, is likely to be,
enjoined in connection with a Warranty Claim, then Liquid Audio may, at its sole
option and expense, either: (1) procure for Distributor the right to continue
using such products under the terms of this Agreement; or (ii) replace or modify
such products so that they are noninfringing and
substantially equivalent in function to the enjoined products; or (iii) if
options (i) and (ii) above cannot be accomplished despite the reasonable efforts
of Liquid Audio, then Liquid Audio may terminate Distributor's rights, and
Liquid Audio's obligations, under this Agreement with respect to such products.
(c) Liquid Audio will have no obligations under this Section with
respect to infringement or misappropriation arising from: (i) modifications to
products that were not authorized by Liquid Audio (ii) product specifications
requested by Distributor, or (iii) the use of products in combination with
products not provided by Liquid Audio.
(d) THE FOREGOING ARE LIQUID AUDIO'S SOLE AND EXCLUSIVE OBLIGATIONS AND
DISTRIBUTOR'S SOLE AND EXCLUSIVE REMEDIES WITH RESPECT TO INFRINGEMENT OR
MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS.
12. LIMITATIONS OF LIABILITY AND REMEDIES. IN NO EVENT WILL EITHER PARTY BE
LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOST
PROFITS OR LOST SAVINGS SUFFERED BY THE OTHER PARTY, ITS CUSTOMERS, AFFILIATES,
OR CONTRACTORS, OR ANY OTHER PERSON OR ENTITY, EVEN IF SUCH PARTY OR ITS AGENTS
ARE MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.
13. INDEMNIFICATION. With the exception of claims indemnified by Liquid
Audio in accordance with Section 11 above, Distributor shall defend, indemnify
and hold harmless Liquid Audio from and against all claims, damages, costs or
expenses (including reasonable attorney's fees) suffered or incurred by Liquid
Audio as a result of Distributor's, or its Sub-Distributor's, acts or
omissions when performing under this Agreement. Distributor may not enter
into any settlement agreement on behalf of Liquid Audio without Liquid Audio's
prior written consent.
14. ASSIGNMENT AND SUBLICENSE. This Agreement will bind each party and its
successors and permitted assigns but will not be assignable or delegable by such
party except with the other party's prior written consent. Any such purported
assignment or delegation in contravention of the foregoing will be void. Any
merger, sale of all or substantially all assets or business, or transfer of
control of either party will not constitute an assignment requiring the consent
of the other party.
15. DEFAULT AND TERMINATION. Either party may terminate this Agreement for
any reason upon providing thirty (30) days written notice to the other party.
This Agreement may be terminated by a party if the other party materially fails
to perform or comply with this Agreement or any provision hereof. Termination
will be effective thirty (30) days after notice of termination to the defaulting
party if the applicable event(s) of default has not been cured within such
thirty (30) day period.
16. OBLIGATION UPON TERMINATION
(a) Within thirty (30) days of the termination or expiration of this
Agreement, Distributor will return to Liquid Audio or destroy, and remove from
its computer systems, all copies of Liquid Audio Products, and all materials
containing trade secrets or Confidential Information of Liquid Audio (as
specified in Section 8(c)), except pursuant to subsection (b) below.
(b) From and after termination or expiration, Distributor will not use
internally nor employ any Liquid Audio Product as part or portion of any product
that Distributor may use, sell, assign, lease, license, or transfer to third
parties, except that for a period of one hundred twenty (120) days after the
Effective Date of any such termination or expiration, Distributor shall retain
the right to dispose of Liquid Audio Products as part of the Bundles remaining
in its inventory prior to the date of such termination or expiration in
accordance with the terms of this Agreement. Except for such limited disposal
right all licenses granted hereunder shall immediately terminate upon any
termination or expiration of this Agreement. Distributor shall have no such
disposal right in the event that this Agreement is terminated by Liquid Audio as
a result of a breach by Distributor.
(c) No termination or expiration hereof for any reason will lessen or
affect the obligations of each party under provisions hereof which by their
terms continue after the termination or expiration of this Agreement (including
Sections 8 through 17), and all such provisions and obligations will fully
survive and continue thereafter.
17. MISCELLANEOUS
Distributor shall ensure that the export of all Liquid Audio Products is
in compliance with the export control laws of the United States and all other
nations and territories. All notices, authorizations, and requests in connection
with this Agreement will be deemed given on the earlier of: (i) actual receipt;
(ii) the third day following deposit in the U.S. mails, postage prepaid,
certified or registered, return receipt requested; or (iii) the business day
after they are sent by overnight courier or national express mail, charges
prepaid, with a confirming fax, to the address first specified above. This
Agreement will be governed by and construed in accordance with the laws of the
State of California, except for its conflict of laws rules. If any provision of
this Agreement is determined to be invalid or unenforceable to any extent when
applied to any person or circumstance, the remainder of this Agreement and the
application of such provision to other persons or circumstances or to another
extent will not be affected and will remain in full force. If either party
employs attorneys to litigate any rights arising out of or relating to this
Agreement, the prevailing party will be entitled to recover its reasonable
attorneys' fees, costs and other expenses. No waiver of any breach of any
provision of this Agreement will constitute a waiver of any prior, concurrent or
subsequent breach of the same or any other provisions hereof, and no waiver will
be effective unless made in writing and signed by an authorized representative
of the waiving party. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous agreements or communications regarding such subject matter.
This Agreement may not be modified except by a written agreement signed on
behalf of the parties. This Agreement may be signed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
United Internet Technologies, Inc. LIQUID AUDIO, INC.
By: /s/ Xxxxxxxxxxx Xxxxx By:
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Name: Xxxxxxxxxxx Xxxxx Name:
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Title: CFO Title:
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EXHIBIT B
Distributor Products Attachment
Project 1:
TITLE: BP.-ROM SPRING 2000
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DESCRIPTION:
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Interactive CD-Rom for Nordstrom Stores and Teen People Magazine. This CD-ROM
release is a "magalog" (magazine-catalog) of Nordstrom junior department fashion
from its BP department (formerly known as Brass Plum). Teen People Magazine is
a co-branded sponsor supplying editorial content and promotional content from
music labels, television networks and movie studios.
BP.ROM is targeted to Nordstrom cardholder customers who shop at BP, and Teen
People subscribers in the Nordstrom markets. 600,000 CDs are being direct
mailed to this list the week of March 6, 2000, with an additional 15,000 disks
sent to all 72 Nordstrom stores for distribution in the BP department. The
promotion also receives in-store video promotion.
BP.ROM also contains a bundled subscriber offer for America Online service.
