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The following agreement describes the relationship between two technology companies developing an interface for their products, and working together to market that product. In practice, this relationship tends to vary between the least complicated (co-marketing activities only) to the more complicated (where the parties act as sales representatives or resellers for each other). This agreement contains a provision for referral fees, which is in the middle of the spectrum. The agreement is typical of Silicon Valley practice, in that it is short and not terribly aggressive. It contains mostly reciprocal terms, so on its face, it is not favorable to one side or the other — though it’s important to assess this in light of the context to determine who will actually benefit most from the “middle-of-the-road” approach. In this form the parties are called “Your Client” and “Company.” JOINT DEVELOPMENT AND MARKETING AGREEMENT This Joint Development and Marketing Agreement (” Agreement“) is made and entered as of __________, 2000 (” Effective Date“), by and between ___________, a ___________ corporation with offices at ________________ (” Your Client“), and ___________, a ___________ corporation, with offices at _______________ (” Company“). In consideration of the mutual promises contained herein and for other good and valuable consideration, the parties hereto agree as follows: 1. DEFINITIONS 1.1 ” API” means an application program interface, which may include library routines, protocols or tools for building software applications. 1.2 ” Intellectual Property Rights” means all current and future worldwide patents, patent applications, trade secrets, copyrights, copyright registrations and applications therefor, and all other intellectual property rights and proprietary rights (except trademarks, trade dress, service marks and related rights), whether arising under the laws of the United States of America, or any other state, country or jurisdiction. 1.3 ” Interface” means the product developed by Your Client and Company hereunder, to allow interaction between the Your Client Product and the Company Product, as described in Exhibit B. 1.4 ” Joint Invention” means any code, idea, design, concept, technique, method, discovery or improvement, whether or not patentable, that is conceived or reduced to practice by one or more of the inventing party’s employees with one or more of the other party’s employees, during the term and in the performance of this Agreement. 1.5 ” Your Client Product” means the software product of Your Client, as described in Exhibit A. 1.6 ” Company Product” means the software product of Company, as described in Exhibit A. 1.7 ” Milestone” means a progress point to be completed in the development of the Interface, as identified in the Statement of Work. 1.8 ” Net Sales” means any and all royalties, fees, or other amounts invoiced by a party and recorded according to generally accepted accounting practices in connection with the sale, distribution, or sublicensing of a product to third parties, less, to the extent included therein: (i) credits for actual returns or amounts attributable to bad debt; (ii) amounts for shipping and handling, insurance, sales tax, or other applicable taxes; and (iii) trade discounts. In bundled transactions involving more than one product, Net Sales will be calculated by prorating Net Sales as described above, according to the wholesale list prices of the applicable products. In no event will Net Sales of the Interface be less than % of Net Sales for any bundled transaction. Net Sales will not include any fees for support, maintenance, or updates unless received within 90 days after the date of invoice for the initial license fee. 1.9 ” Product Release Date” means the date the Interface is first made generally commercially available. 1.10 ” Source Materials” means documented (determined in accordance with prevailing industry standards), human-readable and machine-readable source code in printed form and on appropriate media, including without limitation header files, make files, specialized include files, and anything else reasonably necessary to compile, build and run a software product. “ Source Materials” also include applicable architectural and functional specifications and block diagrams explaining the operation of the software. 1.11 ” Statement of Work” means the statement of work attached as Exhibit B. 2. DEVELOPMENT AND DELIVERY OBLIGATIONS 2.1 Statement of Work.Each party shall complete its respective obligations described in the Statement of Work, as follows: the party listed in the “Responsible Party” column shall perform the associated Milestone, or deliver any specified deliverable (“Deliverable”) to the other party, by the date listed in the “Due Date” column for that Deliverable. 2.2 Deliverables of Company.Any Milestone for which a party (“Delivering Party”) is identified as “Responsible Party” in the Statement of Work will be deemed complete upon acceptance by other party (“Receiving Party”), as follows: Receiving Party shall review the Milestone or Deliverable promptly upon (a) delivery of the Deliverable by Delivering Party; or (b) notice by the Delivering Party that the Milestone is complete. Receiving Party’s refusal to accept a Milestone or Deliverable must be reasonable, must be in writing and must be accompanied by reasons given in sufficient detail that deficiencies can be rectified. Any Milestone or Deliverable will be deemed accepted if Delivering Party has not received from Receiving Party notification of rejection of the Milestone or Deliverable within 10 days after delivery. 2.3 Costs.Unless otherwise agreed in writing, the parties will each be responsible for development costs incurred by such party in its activities under this Section 2, and each party shall obtain or secure the use of any equipment and resources as may be necessary for the performance of such party’s activities under this Section 2. 2.4 Remedies.In the event the Product Release Date has not occurred by ________, either party may terminate this Agreement; provided however, that such termination may not take place once the Product Release Date occurs. Such termination will be each party’s sole remedy and sole liability for failure to complete the development of the Interface under this Section 2. 3. MARKETING AND FEES 3.1 Marketing and Promotion.Each party shall cooperate with other party in marketing and promoting the Interface to customers, including, but not limited t making joint sales calls, cooperating at trade shows, and collaborating in joint press releases, [as described in Exhibit C]. 3.2 Royalties.No later than 30 days after the end of each calendar quarter, each party shall pay to the other party a royalty of 5% of Net Sales of the Interface received by such party during such quarter. 3.3 Commissions.No later than 30 days after the end of each calendar quarter, each party shall pay to the other party a royalty of 5% of Net Sales received by such party during such quarter as a result of referrals by the other party for sales of all products other than the Interface. 3.4 Payment Terms.All payments hereunder exclude all sales, use, and other taxes that may be imposed upon such payments. In the event of a late payment, the party to whom the payment was due may, in addition to any other remedies it may have, charge a late fee of 1% per month, or the maximum rate allowed under law, whichever is less, for any unpaid balance. 3.5 Audit.Each party shall maintain complete and accurate books and records with respect to copies and distribution of the Interface, or otherwise pertaining to the payment of fees hereunder, until at least 3 years after the applicable report and payment under this Section 3. The other party or its agent (a certified public accountant) may at any time, on at least 10 business days prior notice, audit the books and records of such party pertaining to the payment of fees hereunder. Any such audit must be performed at the requesting party’s expense during normal business hours and subject to such agent’s agreement to comply with confidentiality obligations substantially equivalent to those in Section 8 below. If, however, such audit reveals an underpayment of 5% or more of the amount that should have been paid for the period audited, then the underpaying party shall pay, in addition to all amounts due, the reasonable costs of such audit. 4. OWNERSHIP RIGHTS 4.1 Your Client Product.As between the parties, Your Client will retain all right, title and interest, including all Intellectual Property Rights, in and to the Your Client Product. 4.2 Storage Device and Company Product.As between the parties, Company will retain all right, title and interest, including all Intellectual Property Rights, in and to the Storage Device and Company Product. 4.3 Interface.The Interface will be jointly owned by the parties. Each party hereby assigns and shall assign to other party an undivided one-half interest in the Interface and all Intellectual Property Rights therein. Each party may exploit the Interface without reporting to or paying royalties to the other party, except as required by this Agreement. 4.4 Further Assurances.Each party shall, and shall cause its employees and agents to, sign, execute and acknowledge or cause to be signed, executed and acknowledged without costs at the expense of the other party, any and all documents and perform such acts as may be reasonably requested by the other party for the purposes of perfecting the foregoing assignments and obtaining, enforcing and defending the Intellectual Property Rights related thereto. 5. LICENSE GRANTS 5.1 Development Licenses. (a) Your Client hereby grants to Company a worldwide, non-exclusive, non-transferable, royalty-free license, during the term of this Agreement prior to the Product Release Date, to use and to prepare derivative works of the Source Materials for the Your Client Product, solely to perform Company’s development obligations under Section 2. (b) Company hereby grants to Your Client a worldwide, non-exclusive, non-transferable, royalty-free license, during the term of this Agreement prior to the Product Release Date, to use and to prepare derivative works of the Source Materials for the Company Product, solely to perform Your Client’s development obligations under Section 2. 5.2 Reservation of Rights.Each party shall not cause or permit reverse engineering, disassembly or decompilation of other party’s materials to the extent such materials are provided in object code format. Each party hereby reserves all rights not expressly granted herein. 6. TRADEMARKS 6.1 Trademark License.Each party hereby (“Licensor”) grants to the other party (“Licensee”) during the term of this Agreement the right to use the trademarks, trade names and logos of the other party (“Trademarks”), solely to exercise its rights or to perform its obligations under this Agreement. 6.2 Restrictions.Except as set forth in this Section 6, nothing contained in this Agreement will be deemed to grant to Licensee any right, title or interest in or to Licensor’s Trademarks. Licensee shall not, at any time during or after the term of this Agreement, challenge or assist others to challenge Licensor’s Trademarks, or the registration thereof, or attempt to register any trademarks, marks or trade names confusingly similar to those of the other party. 7. TERM AND TERMINATION 7.1 Term.This Agreement will commence on the Effective Date and will continue for 3 years after the Product Release Date, unless earlier terminated under this Section 7. 7.2 Automatic Termination.Either party may terminate this Agreement upon written notice to other if and when the other party admits in writing to its inability to pay its debts in ordinary course of business as due, or makes assignment for benefit of creditors, or ceases business in ordinary course. 7.3 Termination for Cause.Either party may terminate this Agreement upon written notice to other upon occurrence of any material breach hereof by the other party, if the breaching party has not cured such breach for a period of 30 days after receipt of written notice from the non-breaching party. 7.4 Survival.The obligations in the following Sections will survive any expiration or termination of this Agreement: 1, 3.5, 4, 5.2, 6.2, 7.4, 7.5, 8, 9, 10, and 11. Sections 3.1 through 3.4 will survive as to any payment obligations accruing before: (a) the date 3 years after the Effective Date, if this Agreement is terminated after the Product Release Date; or (b) the effective date of termination, if this Agreement is terminated before the Product Release Date. All other obligations will terminate upon the effective date of termination. 7.5 LIMITATION OF LIABILITY.EXCEPT FOR LIABILITY FOR THIRD PARTY CLAIMS ARISING OUT OF SECTION 10, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUE, DATA, OR USE, INCURRED BY EITHER PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR IN TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 8. CONFIDENTIALITY 8.1 ” Confidential Information” means any proprietary information of a party to this Agreement, disclosed by one party to other, prior to date of this Agreement but related to subject matter hereof, or during the term of this Agreement. Confidential Information of each party will include without limitation any Source Materials or APIs provided by such party hereunder. [Note: This means disclosure of the Source Materials for the Interface will be restricted for both parties.] 8.2 Exceptions.Confidential Information will not include any information which: (i) was publicly known and made generally available prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by disclosing party to receiving party; (iii) is already in the possession of receiving party at the time of disclosure; (iv) is obtained by receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently developed by receiving party without use of or reference to disclosing party’s Confidential Information; or (vi) is required by law to be disclosed by receiving party, provided that receiving party gives disclosing party advance notice thereof to enable disclosing party to seek a protective order or otherwise prevent such disclosure. 8.3 Non-Disclosure and Non-Use.Each party: (a) shall not use any Confidential Information of the other party except for the purpose of exercising its rights and performing its obligations under this Agreement; and (b) shall not disclose such Confidential Information to any third party, except on a “need to know” basis to persons or entities that have signed a non-disclosure agreement containing substantially the terms of Sections 8.1, 8.2 and 8.3. 8.4 Additional Responsibilities.Each party shall either confirm the existence of, or obtain the execution of, confidentiality agreements (at least as protective as this Agreement) with its employees and contractors having access to Confidential Information of the other party. 8.5 Confidentiality and Press Release.Each party shall not disclose any terms of this Agreement to any third party without the consent of the other party, except as required by securities or other applicable laws, or as disclosed to prospective investors or such party’s accountants, attorneys and other professional advisors, provided such parties are acting under a duty of confidentiality. Notwithstanding the above, the parties shall issue a mutually acceptable press release regarding the development of the Interface no later than __ days after the Effective Date. 9. REPRESENTATIONS AND WARRANTIES 9.1 Authority.Each party hereby represents and warrants to the other that: (a) such party has the right, power and authority to enter into this Agreement and to fully perform all of its obligations hereunder; and (b) entering into this Agreement does not and will not violate any agreement or obligation existing between such party and any third party. 9.2 Intellectual Property Warranties.Each party hereby represents and warrants to the other party that the information, Intellectual Property Rights, and materials it provides hereunder do not and will not, to the best of such party’s knowledge, infringe any third party’s Intellectual Property Rights. 9.3 Disclaimer.EXCEPT FOR THE WARRANTIES IN THIS SECTION 9, EACH PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 10. INDEMNIFICATION 10.1 Mutual Indemnity.Each party (“Indemnifying Party”) shall, at its own expense, defend or at its option settle any claim brought against the other party (the “Indemnified Party”) or its employees, directors, distributors, agents, customers, licensees, successors and assigns, and pay any associated third-party damages, expenses or settlements arising out of any breach of any warranty made by the Indemnifying Party under Section 9; or the alleged infringement or misappropriation of any third-party Intellectual Property Right by the materials provided by such party hereunder (which, in the case of Your Client, means the Your Client Product, and in the case of Company, means the Company Product and Storage Device) (“Indemnified Materials”). THE FOREGOING PROVISIONS OF THIS SECTION 10.1 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF EACH PARTY, AND THE EXCLUSIVE REMEDY OF EACH PARTY, WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT. 10.1 Limitation.The Indemnifying Party will have no obligation with respect to any claim under Section 10.1 unless: (a) such Indemnifying Party is promptly notified of such claim; (b) the Indemnified Party allows the Indemnifying Party sole control of the defense and settlement of such claim; and (c) the Indemnified Party provides the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the Indemnifying Party’s defense and settlement of such claim. 10.2 Additional Intellectual Property Remedy.If the Indemnified Materials infringe or misappropriate, or in the reasonable determination of the Indemnifying Party, are likely to infringe or misappropriate, any third party’s Intellectual Property Rights, then the Indemnifying Party may, at its sole option and expense: (a) obtain from such third party the right to continue to use the Indemnified Materials consistent with the rights granted hereunder; or (b) modify the Indemnified Materials to avoid and eliminate such infringement or misappropriation. 11. GENERAL PROVISIONS 11.1 Independent Contractors.The relationship of Your Client and Company established by the Agreement is that of independent contractors, and nothing contained in this Agreement will be construed t (a) give either party the power to direct and control the day-to-day activities of the other; (b) constitute the parties as partners, joint ventures, co-owners or otherwise as participants in a joint or common undertaking; or (c) allow either party to create or assume any obligation on behalf of the other party. 11.2 Arbitration and Governing Law.This Agreement will be construed under the laws of the State of California, excluding its conflict of laws principles. In the event a dispute arises between the parties hereto arising out of this Agreement or any breach thereof, such dispute must be determined and settled by binding arbitration in [San Francisco, California], in accordance with the rules of the American Arbitration Association. 11.3 Notices.Any notice or other communication required or permitted hereunder must be in writing and must be sent by reasonable means to the address of the recipient party first written above. Such notice will be deemed to have been given when delivered, or, if delivery is not accomplished by some fault of the addressee, when tendered. 11.4 Nonassignability and Binding Effect.Neither party may assign or delegate this Agreement or any of its licenses, rights or duties under this Agreement without prior written consent of the other party. Notwithstanding the foregoing, either party may assign this Agreement without consent of the other party: (a) to an entity into which it has merged or which has otherwise succeeded to all or substantially all of its business, stock, or assets, and which has assumed in writing its obligations under this Agreement; and (b) provided that if such an assignment occurs before the Product Release Date, the other party may terminate this Agreement by written notice at any time prior to the Product Release Date. Any attempted assignment in violation of this Section 11.4 will be void. 11.5 Severability.If any provision of this Agreement is held to be invalid, unlawful or unenforceable, such provision or part will be severed from this Agreement, and the remainder of the provisions, terms and conditions of this Agreement will continue to be valid and enforceable. The parties shall make reasonable, good faith efforts to amend any severed provision or part of this Agreement so as to preserve the intentions of the Agreement as much as possible. 11.6 Integration.This Agreement, including the Statement of Work and any other Exhibits hereto, constitutes the entire agreement between Your Client and Company and supersedes all prior or contemporaneous agreements or representations, written or oral, concerning the subject matter of this Agreement. This Agreement may not be modified or amended except in writing and signed by a duly authorized representative of each party to this Agreement. 11.7 Waiver.No waiver of any term or condition of this Agreement will be valid or binding on either party unless the same is mutually assented to in writing by an officer of both parties. The failure of either party to enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other party of any of the provisions of this Agreement, will in no way be construed to be a present of future waiver of such provisions, nor in any way affect the validity of either party to enforce each and every such provision thereafter. 11.8 Force Majeure.Neither party will be liable to the other party for any loss or damage resulting from any delay or failure to perform all or any part of this if such delay or failure is caused, in whole or in party, by circumstances, beyond the control and without negligence of the party. Such circumstances include without limitation, acts of God, strikes, lockouts, riots, acts of war, acts of deadly violence, earthquakes, floods, fire and explosions. The parties have signed below to indicate their acceptance of the terms of this Agreement. “YOUR CLIENT” By: Name: Title: “COMPANY” By: Name: Title: EXHIBIT A PRODUCTS [Describe Company Product] [Describe Your Client Product] EXHIBIT B STATEMENT OF WORK Heather Meeker is an attorney in the Technology Transactions Group at Wilson, Sonsini, Goodrich & Rosatiin Palo Alto, Calif. She teaches a seminar in Intellectual Property Licensing at Hastings College of the Law in San Francisco. This agreement was developed as part of her seminar, and incorporates the work of her students. This sample agreement is intended to serve solely as an exemplar and may need to be modified to conform to the legal requirements of your jurisdiction. It in no way constitutes legal advice.

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