EXHIBIT 10.6
WATCHGUARD TECHNOLOGIES, INC.
MANAGED SECURITY SERVICES PROVIDER AGREEMENT
This WatchGuard Technologies, Inc. Managed Security Services Provider Agreement
(the "Agreement") is made and entered into by and between WatchGuard
Technologies, Inc., a Delaware corporation, with its principal place of business
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("WGT"), and You Tools
Corporation/Fastnet, a Pennsylvanian corporation, with its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("MSS
Provider"). WGT and MSS Provider are sometimes referred to herein collectively
as the "Parties" and individually as a "Party".
The Parties, therefore, agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement with initial letters capitalized, these
terms shall have the following definitions:
1.1 "COMPENSATION AGREEMENT" MEANS THE DOCUMENT ATTACHED HERETO AS EXHIBIT A.
1.2 "DISTRIBUTED PRODUCTS" means all Products, other than the MSS Product,
identified in the most current version of the WGT Manufacturer's Suggested
Retail Price ("MSRP") list in effect from time to time.
1.3 "DOCUMENTATION" shall mean any manuals, user guides, product descriptions
and specifications, brochures, technical manuals, license agreements, limited
hardware warranty, supporting materials and other printed information generally
made available and delivered by WGT with a Product, whether provided in print,
electronic, or video format.
1.4 "EFFECTIVE DATE" means the date on which this Agreement is signed and dated
by a duly authorized representative of WGT.
1.5 "END-USER" means a Product End-User and/or a Service End-User, as the
context requires.
1.6 "GROSS PURCHASES" means the gross purchase price paid by MSS Provider to WGT
for the Product, excluding any taxes or pass through charges and net of any
credits or returns.
1.7 "GUARANTEED MINIMUM PURCHASES" means the guaranteed minimum purchase amounts
set forth in the Compensation Agreement.
1.8 "HARDWARE PRODUCT" means any "Firebox" hardware product identified in the
Compensation Agreement, and in the most current WGT MSRP list in effect from
time to time.
1.9 "LIMITED HARDWARE WARRANTY" means the standard warranty of WGT in effect
form time to time that is applicable to each Hardware Product purchased by MSS
Provider. The Limited Hardware Warranty in effect on the date of this Agreement
is attached hereto as Exhibit B.
1.10 "MANAGED SECURITY SERVICES" means the Internet security and support
services offered and furnished to Service End-Users by MSS Provider using the
MSS Product.
1.11 "MSS PRODUCT" means WGT's "NOC Security Suite" software product, and any
Updates thereto, identified in the Compensation Agreement. The NOC Security
Suite consists of both the "Global Policy Manager" and "WatchGuard Event
Processor" components.
1.12 "IVOC SECURITY SUITE RENEWAL FEE" means the telephone support and security
update services fees to be paid by MSS Provider in accordance with Section 5.3
of this Agreement.
1.13 "PRODUCT" means any product identified in the Compensation Agreement, and
in the most current version of WGT's MSRP list in effect from time to time,
including any Hardware Product, Software, or Documentation, and any Updates
thereto.
1.14 "PRODUCT END-USER" means any end-user purchaser of a Distributed Product
from MSS Provider under the terms of this Agreement.
1.15 "SECURITY SUBSCRIPTION FEE" means the telephone support and software update
fees to be paid by MSS Provider in accordance with Section 5.4.
1.16 "SERVICE END-USER" means any end-user purchaser of Managed Security
Services from MSS Provider pursuant to a written service agreement that conforms
to the requirements of this Agreement.
1.17 "SOFTWARE" means any software product identified in the Compensation
Agreement, and in the most current version of WGT's MSRP list in effect from
time to time, including any Updates thereto.
1.18 "TERM" means the period described in Section 6.1.
1.19 "TERRITORY" means the geographic area of North America as identified in the
Compensation Agreement.
1.20 "TRADEMARKS" means the following WGT trademarks and trade names:
WatchGuard-Registered Trademark-; WatchGuard-Registered Trademark- Technologies;
WatchGuard-Registered Trademark- SchoolMate; Firebox-TM-; Firebox-TM- II;
LiveSecurity-TM- and any other trademarks and trade names designated in writing
by WGT for use by MSS Provider under this Agreement.
1.21 "UPDATE" means any minor modification, upgrade or enhancement of a Product
(excluding any new version of a Product) that WGT elects to make generally
commercially available to its MSS Providers via FTP site or other reasonable
means.
SECTION 2. LICENSE GRANT AND LIMITATIONS
2.1 LICENSE GRANT. Subject to the terms and conditions of this Agreement,
including any Exhibits attached hereto, WGT hereby grants to MSS Provider, for
the Term of this Agreement, a non-exclusive, non-transferable license to do the
following in the Territory: (i) install and use the Global Policy Manager
software component of the MSS Product at one (1) single primary
location for the sole purpose of furnishing Managed Security Services to
Service End-Users through use of the Hardware Product purchased from WGT; (ii)
install and use the Global Policy Manager software component of the MSS Product
at one (1) single secondary location for the sole purpose of furnishing Managed
Security Services to Service End-Users through use of the Hardware Product
purchased from WGT, solely for the duration of any operation failure at the
primary location, (iii) install and use the WatchGuard Event Processor software
component of the MSS Product at multiple locations solely for the purpose of
furnishing Managed Security Services to Service End-Users through use of the
Hardware Product purchased from WGT; (iv) market and demonstrate the Distributed
Products to potential Product End-Users; (v) resell the Distributed Products to
Product End-Users in the same condition as received from WGT; (vi) support the
Distributed Products sold to Product End-Users; and (vii) use and display the
Trademarks solely for purposes of identifying the Products in connection with
the rights granted under (i), (ii), (iii), (iv), (v) and (vi) above. MSS
Provider's use of any Product will also be subject to the terms and conditions
of the applicable WGT end-user license agreement furnished with the Product;
provided, however, that in the event of any conflict or inconsistency between
the terms of this Agreement and the terms of any such end-user license
agreement, the terms of this Agreement shall control.
2.2 LIMITATIONS OF USE. The MSS Product is licensed, not sold, to MSS Provider.
Section 2.1 above sets forth the entirety of MSS Provider's rights to, as
applicable, use, market, demonstrate, distribute, lease, manage and support the
Products. All rights in and to the Products not expressly granted to MSS
Provider under this Agreement are hereby expressly reserved to WGT without
restriction. Without limiting the foregoing MSS Provider will not, directly or
through others (i) install and/or use the WatchGuard Event Processor software
component of the MSS Product other than in connection with the licensed use of
the Global Policy Manager component of the MSS Product granted in Section 2.1(i)
and (ii) above; (ii) market, manage, lease, demonstrate, distribute, or support,
as applicable, any Product outside the Territory, or supply any Distributed
Product to any Product End-User that MSS Provider knows or has reason to know
intends to use or install the Distributed Product outside the Territory, unless
otherwise agreed to in writing by WGT; (iii) distribute any Distributed Product
in any form other than its original packaging and condition as received from WGT
under the terms of the end-user license agreement and Limited Hardware Warranty;
(iv) modify any Product or translate or port the Software into any other
computer or human language; (v) disassemble, reverse engineer, decompile or
repackage all or any component of any Product or otherwise attempt to discover
any portion of the source code or trade secrets related to any Product; (vi)
sell, lend, rent, give, assign or otherwise transfer or dispose of any Product
other than in accordance with Section 2.1; (vii) remove, alter, distort, cover
or modify any notice of proprietary rights present in or on any Product or its
packaging as delivered to MSS Provider; or (viii) register, attempt to register
or assist anyone else to register, directly or indirectly, the Trademarks or any
copyright or other proprietary rights associated with the Products in the
Territory or elsewhere other than in the name of WGT, without WGT's prior
written consent.
2.3 PROTECTION AGAINST UNAUTHORIZED USE. MSS Provider will promptly notify WGT
of any known or suspected unauthorized use of the Products or the Trademarks. In
the event of any such unauthorized use by MSS Provider's employees, agents or
representatives, MSS Provider will use its best efforts to terminate such
unauthorized use and to retrieve any copy of the Products in the possession or
control of the person or entity engaging in such unauthorized use. MSS Provider
will immediately notify WGT of any legal proceeding initiated by MSS Provider in
connection with such unauthorized use. WGT may, at its option and expense,
participate in any proceeding and, in such event, MSS Provider will provide such
authority, information and assistance related to such proceeding as WGT may
reasonably request to protect WGT's interests.
SECTION 3. PRODUCT PROCUREMENT, PRICING, AND PAYMENT
3.1 PRODUCT PROCUREMENT. During the Term, WGT will deliver to MSS Provider, and
MSS Provider will pay for, all Products ordered by MSS Provider in accordance
with the terms and conditions of this Agreement.
3.2 ORDERS. MSS Provider will place orders for the Products that it desires to
obtain from WGT by completing, signing, and submitting to WGT a written order
for the same, in a form acceptable to WGT, via facsimile, mail or other means.
MSS Provider will submit such orders at lease thirty (30) days in advance of the
requested delivery date set forth in the orders. All orders will be subject to
acceptance by WGT through written acceptance or shipment of the Products subject
to the order. WGT will use commercially reasonable efforts to deliver the
Products to MSS Provider in accordance with Section 3.4 within ten (10) days of
WGT's acceptance of any order placed by MSS Provider.
3.3 STOCK ROTATION/EXCESS INVENTORY. Credit for stock rotation/excess inventory
returns by MSS Provider to WGT shall not exceed fifteen percent (15%) of MSS
Provider's previous quarter's net purchases of the Products, which percentage
amount shall include returns by MSS Provider of any discontinued Product. Such
returns may be executed by MSS Provider monthly, cumulative to fifteen percent
(15%) during the current quarter. MSS Provider shall be responsible for return
freight shipping costs, F.O.B. the location designated by WGT. WGT will not
require an order by MSS Provider to offset the above returns.
3.4 DELIVERY. All Products will be delivered F.O.B. carrier at WGT's shipping
location as determined by WGT from time to time. MSS Provider will pay or
reimburse WGT for all reasonable shipping charges, premiums for freight
insurance, inspection fees, duties, import and export fees, assessments,
transportation and other costs incurred by WGT to transport the Product to the
shipping destination.
3.5 PRICE. MSS Provider will pay WGT according to the pricing terms specified in
the Compensation Agreement for each MSS Product ordered by MSS Provider, and
according to WGT's then current MSRP list for the Distributed Products ordered
by MSS Provider for resale to Product End-Users.
3.6 INVOICES. MSS Provider will pay WGT the full amount invoiced within thirty
(30) days
after the date of WGT's invoice, unless provided otherwise on the applicable
invoice. All orders from outside the United States must be prepaid in advance
unless otherwise agreed to in writing by the WGT credit department. All payments
to WGT shall be in the lawful money of the United States of America to WGT.
International payments shall be made via wire transfer to WGT's bank account
number 3300108287, at the Silicon Valley Bank, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇; ABA routing number ▇▇▇▇▇▇▇▇▇.
3.7 RESALE OF DISTRIBUTED PRODUCTS. Except for any Hardware Products used by MSS
Provider in connection with its Managed Security Services, and except for the
copies of the Software licensed to MSS Provider for its internal use under the
terms of the applicable Software end-user license agreement, MSS Provider
represents and warrants that all Distributed Products acquired under this
Agreement are acquired solely for demonstration, licensing or sale (as
applicable) to Product End-Users in the Territory without intervening use by MSS
Provider. Upon WGT's request, MSS Provider will furnish WGT evidence of such
resale (including but not limited to satisfactory evidence of exemption from
retail sales, use or similar taxes that may otherwise apply to transactions
under this Agreement).
SECTION 4. OBLIGATIONS OF THE PARTIES
4.1 OBLIGATIONS OF MSS PROVIDER. MSS Provider will use good faith efforts to
aggressively market and promote the Distributed Products and its Managed
Security Services in the Territory. In furtherance thereof, MSS Provider will:
(a) keep on hand a reasonable inventory of the MSS Product for Managed
Security Services, and of the Distributed Products sufficient to allow for
prompt delivery to Product End-User customers;
(b) establish a program to market the Distributed Products and its Managed
Security Services and conduct regular local promotional and other marketing
efforts for the Distributed Products and its Managed Security Services. In
furtherance hereof, MSS Provider may create, develop and use any and all of
its own advertising, demonstration and promotional literature, data,
information and items as may be appropriate or desirable in the discretion
of MSS Provider in order to promote, market and sell the Products. The
promotional items and materials developed by MSS Provider will be used in
conjunction with the items provided by WGT, and in accordance with the
Trademark guidelines established by WGT from time to time;
(c) promptly respond to sales leads or referrals furnished by WGT or other
Product vendors;
(d) maintain and furnish to WGT, on a monthly basis, complete and accurate
records of each Product distributed, leased or managed, as applicable
(e.g., showing the date of the transaction, Zip Code of the customer, the
Product serial number and the applicable Product license key(s) under this
Agreement);
(e) provide quality Product support and promptly advise WGT of each
complaint that MSS Provider may receive or otherwise become aware of
concerning the Product or any portion thereof (including, but not limited
to, warranty claims). MSS Provider will promptly investigate all such
complaints, and will give immediate attention to and use its best efforts
to promptly, courteously and equitably respond to, adjust and settle
(without incurring any obligation or liability on behalf of WGT) all
complaints received by MSS Provider from any customer, potential customer
or anyone else arising out of or in connection with MSS Provider's
distribution of any Distributed Product or the performance of any services.
In handling any complaints, MSS Provider will use its best efforts to
maintain and promote good public relations for WGT;
(f) secure and maintain, in the name of WGT, any and all registrations,
permits, licenses, approvals and other governmental actions required to
import, handle, market, sell, manage, demonstrate, and use, as applicable,
the Products in the Territory, provide to WGT quarterly progress reports on
such action, and provide WGT copies of all registrations, permits,
licenses, approvals, certificates, correspondence and other documentation
related to such action;
(g) avoid deceptive, misleading or unethical conduct which is or might be
detrimental to WGT or its Products, and refrain from making any
representation, warranty or guarantee to any End-User, customer, or other
third party with respect to specifications, features or capabilities of the
Products that is inconsistent with the literature distributed by WGT or
this Agreement;
(h) conduct its business in a manner under its own control, provided that
MSS Provider will at all times comply with all applicable laws and
regulations and will not engage in, or permit its employees or agents to
engage in, any activities or practices which could reflect negatively upon
the reputation or prospects of WGT or its Products or expose WGT to any
liability of any nature whatsoever; and
(i) comply with the Trademark usage guidelines established by WGT from time
to time, including, but not limited to, the prominent display by MSS
Provider of WGT's LiveSecurity trademark and logo design on all product
packaging, brochures, Web sites, and any other marketing materials and
advertisements used by MSS Provider in connection with the Managed Security
Services hereunder.
(j) participate with WGT in a joint press release, within thirty (30) days
of the effective date of this Agreement, announcing MSS Provider's intent
to offer Managed Security Services.
(k) participate with WGT in a joint press release announcing MSS Provider's
offering of Managed Security Services, within thirty (30) days of such
offering
4.2 OBLIGATIONS OF WGT. WGT will:
(a) provide MSS Provider with sixty (60) days' advance notice in the event
of the discontinuation of any Product;
(b) furnish MSS Provider with such demonstration Products, promotional
literature, data, information and other items as WGT deems appropriate for
MSS Provider's promotion, marketing, managing, leasing, distribution, and
support, as applicable, of the Products. MSS Provider will use such items
only for the purpose of performing its obligations under this Agreement;
(c) provide MSS Provider with quality sales training in the operation and
management of all Products purchased by MSS Provider;
(d) provide MSS Provider with telephone and/or electronic mail access to
WGT's Technical Support Representatives and with on-line technical support
documentation during the Term of this Agreement. Telephone access to WGT
Technical Support is offered between the hours of 6:00 AM and 5:00 PM
(Pacific Standard Time), Monday through Friday. On-line technical support
documentation and electronic mail access is available to MSS Provider at
any time; and
(e) provide MSS Provider with Updates during the Term of this Agreement.
SECTION 5. COMPENSATION
5.1 GENERAL. MSS Provider will pay WGT all applicable Product prices, license
fees, renewal fees, and any other fees in the amounts and at the times specified
in the Compensation Agreement for Managed Security Services, and in the most
current version of WGT's MSRP list in effect from time to time for purchase and
resale of the Distributed Products.
5.2 GUARANTEED MINIMUM PURCHASES. During the Term, MSS Provider will make Gross
Purchases in an amount at least equal to the Guaranteed Minimum Purchase amounts
specified in the Compensation Agreement, through committed orders placed
pursuant to Section 3.2 and calling for shipment on or before the dates set
forth in the Compensation Agreement.
5.3 NOC SECURITY SUITE RENEWAL FEE. During the second year of the Term, and
during each subsequent year Term thereafter, MSS Provider will pay to WGT the
NOC Security Suite Renewal Fee identified in the Compensation Agreement for each
and every Hardware Product under management by MSS Provider. At the end of each
quarter of any such year, WGT will invoice MSS Provider for the NOC Security
Suite Renewal Fee associated with each and every Hardware Product delivered to
and managed by MSS Provider during the same quarter in the immediately preceding
year of the Term. Any failure by MSS Provider to pay to WGT any and all invoiced
NOC Security Suite Renewal Fee amounts during and such year of the Term shall
result in termination of this Agreement in accordance with Section 6 below.
5.4 SECURITY SUBSCRIPTION FEE. MSS Provider will pay to WGT the Security
Subscription Fee, at the discount identified in the Compensation Agreement, for
each and every Distributed Product distributed by MSS Provider to Product
End-Users. At the end of each quarter during the second year of the Term, and
during each subsequent year Term thereafter, WGT will invoice MSS Provider for
the Security Subscription Fee associated with each and every Distributed Product
delivered to and distributed by MSS Provider to Product End-Users during
the same quarter in the immediately preceding year of the Term. Any failure by
MSS Provider to pay to WGT any and all Invoiced Security Subscription Fee
amounts during any such year of the Term shall result in termination of this
Agreement in accordance with Section 6 below.
SECTION 6. TERM AND TERMINATION
6.1 TERM. The Term will commence on the Effective Date of this Agreement and,
unless sooner terminated under Sections 6.2 or 6.3, will end on the second
anniversary of the date of this Agreement; provided that the Term will
automatically renew for successive additional periods of one (1) year each if
(a) MSS Provider has met or exceeded all Guaranteed Minimum Purchase amounts and
has complied with the marketing requirements under Section 4.1; (b) the Parties
have agreed in writing upon the Guaranteed Minimum Purchase amounts, Product
price discounts, and the NOC Security Suite Renewal Fee amounts for the next
subsequent one (1) year renewal period; and (c) neither Party has given the
other Party notice of such Party's intention not to renew the Term at least
thirty (30) days prior to the end of the then-current Term. WGT agrees that in
order for MSS Provider to continue to provide Managed Security Services to its
Service End-Users upon any termination or expiration of the Term, MSS Provider
will require a service migration period ("Service Migration Period") to migrate
to another platform. The Service Migration Period will commence on the date of
termination or expiration of the Term and will end on the date which is the
earlier of either one (1) year from its date of commencement or when MSS
Provider provides written notice to WGT of its completion.
6.2 TERMINATION BY WGT. WGT may terminate the Term by giving MSS Provider
written notice of such termination upon the occurrence of any of the following:
(a) any solicitation by MSS Provider for the sale of the Distributed
Products to Product End-Users or potential Product End-Users located
outside the Territory unless otherwise agreed to in writing by WGT;
(b) any offer by MSS Provider to furnish customers outside the Territory
with Managed Security services using the MSS Product unless otherwise
agreed to in writing by WGT;
(c) the insolvency of MSS Provider, the filing of a petition in bankruptcy
by or against MSS Provider, the appointment of a receiver for MSS Provider
or MSS Provider's property, the execution of an assignment by MSS Provider
of all or substantially all of its assets for the benefit of its creditors,
or the conviction of MSS Provider or any principal or manager of MSS
Provider for any crime tending to adversely affect the ownership or
operation of MSS Provider's business;
(d) any failure by MSS Provider to perform any of its other obligations
under this Agreement where such failure continues for thirty (30) days
after written notice thereof by WGT to MSS Provider;
(e) WGT giving MSS Provider ninety (90) days' advance written notice of
termination at any time and for any reason after the expiration of the
initial two (2) year Term;
(f) any failure by MSS Provider to pay to WGT the applicable NOC Security
Suite Renewal Fee in accordance with Section 5.3 of this Agreement, subject
to a thirty (30) day cure period after receipt by MSS Provider of written
notice from WGT of such non-payment; or
(g) any failure by MSS Provider to pay to WGT the applicable Security
Subscription Fee in accordance with Section 5.4 of this Agreement, subject
to a thirty (30) day cure period after receipt by MSS Provider of written
notice from WGT of such non-payment; or
(h) any failure by MSS Provider to make Gross Purchases in sufficient
amounts to meet or exceed the applicable cumulative Guaranteed Minimum
Purchases.
6.3 TERMINATION BY MSS PROVIDER. Upon the occurrence of any of the following,
MSS Provider may terminate the Term by giving WGT written notice of such
termination;
(a) the insolvency of WGT, the filing of a petition by or against WGT, the
appointment of a receiver for WGT or WGT's property, or the execution of an
assignment by WGT of all or substantially all of its assets for the benefit
of its creditors; or
(b) any failure by WGT to perform any of its obligations under this
Agreement where such failure continues for thirty (30) days after written
notice thereof by MSS Provider to WGT.
6.4 EFFECT OF TERMINATION. Any termination pursuant to Sections 6.2 or 6.3 will
be without prejudice to any other right or remedy afforded to either party under
this Agreement or any applicable law (e.g., in the case of any breach or default
by the other party), and will not affect any rights or obligations which have
arisen prior to the date of such termination. In the event of any expiration or
termination of the Term, MSS Provider will:
(a) cease to use, demonstrate, market, sublicense, distribute, lease,
manage and support, as applicable, the Products immediately upon the
expiration or completion of the Service Migration Period;
(b) cease use of all Trademarks immediately upon the expiration or
completion of the Service Migration Period;
(c) return to WGT, within twenty (20) days of termination of this
Agreement, any and all demonstration Products, promotional literature,
data, information, and all other items provided to MSS Provider under this
Agreement that WGT may specifically request for return from MSS Provider,
other than those items required by MSS Provider during the Service
Migration Period;
(d) pay to WGT in full any and all outstanding invoice amounts;
(e) immediately inform any and all then current End-Users of the
termination of this Agreement and provide the same with the information
necessary for obtaining security updates and technical support directly
from WGT; and
(f) furnish WGT with such information relating to the marketing, managing,
distribution, and support of the Products in the Territory as WGT may
reasonably request (including, but not limited to, information as to calls
or the status of any negotiations for the distribution of any Distributed
Product, or any sales or service records).
6.5 TERMINATION OF LICENSE GRANT. Upon the expiration or termination of the
Term, the license granted to MSS Provider under Section 2 of this Agreement will
terminate immediately upon the expiration or completion of the Service Migration
Period. Upon any termination or expiration of the Term, the NOC Security Suite
Renewal Fees will only be payable by MSS Provider on a pro rata, quarterly basis
until the expiration or completion of the Service Migration Period. Any end-user
licenses of the Software accompanying the Distributed Products and granted under
the terms of this Agreement will survive the end of the Term in accordance with
the terms of the end-user license agreement included with the Distributed
Products.
SECTION 7. GENERAL TERMS AND CONDITIONS
7.1 CONFIDENTIAL INFORMATION. In the performance of or otherwise in connection
with this Agreement, either Party ("Disclosing Party") may disclose to the other
Party ("Receiving Party") certain Confidential Information (as defined below) of
the Disclosing Party. The Receiving Party will treat such Confidential
Information as confidential and proprietary of the Disclosing Party and will use
such Confidential Information solely for the purposes for which it is provided
by the Disclosing Party. Without limiting the generality of the foregoing, the
Receiving Party will take reasonable precautions to prevent any unauthorized use
or disclosure of such Confidential Information. The obligations under this
paragraph will not apply to any:
(a) use or disclosure of any information pursuant to the exercise of the
Disclosing Party's rights under this Agreement;
(b) information that is now or later becomes part of the public domain
through no fault of the Receiving Party;
(c) information that is obtained by the Receiving Party from a Third Party
(other than in connection with this Agreement) who was not under any
obligation of secrecy or confidentiality with respect to such information;
(d) information that is independently developed by the Receiving Party
(e.g., without reference to any Confidential Information);
(e) any disclosure required by applicable law (e.g., pursuant to applicable
securities laws or legal process), provided that the Receiving Party will
use reasonable efforts to give advance notice to and cooperate with the
Disclosing Party in connection with any such disclosure; and
(f) any disclosure with the consent of the Disclosing Party.
For purposes of the foregoing, the term "Confidential Information" means any
confidential or proprietary information of a Party, whether of a technical,
business or other nature (including, but not necessarily limited to: trade
secrets, know how and information relating to the technology, customers,
business plans, promotional and marketing activities, finances and other
business affairs of such Party); provided that the same is marked or otherwise
identified in writing as confidential or proprietary information prior to, upon
or promptly after receipt by the other Party.
7.2 USE OF TRADEMARKS. WGT reserves all rights in and to the Trademarks and all
other trademarks and trade names used by WGT in connection with the Products,
but WGT grants to MSS Provider the non-exclusive, non-transferable right to use
and display the Trademarks during the Term to promote and identify the Products
in the Territory in connection with this Agreement MSS Provider will comply with
the trademark guidelines and procedures established by WGT from time to time in
MSS Provider's use of the Trademarks, including, without limitation, use of the
trademark and copyright symbols as specified by WGT from time to time. When
using the Trademarks, MSS Provider will include a statement acknowledging that
the Trademarks are owned by WGT. MSS Provider hereby acknowledges that the
goodwill associated with its use of the Trademarks inures solely and exclusively
to WGT and that MSS Provider does not acquire any rights in the Trademarks as a
result of such use. MSS Provider will not use the Trademarks or any confusingly
similar name, marks, logos, designs or artwork as part of MSS Provider's name,
trade name, trademark, top-level domain name, or artwork without WGT's prior
written consent.
7.3 DOMAIN NAME REGISTRATION. Use of any WGT Trademarks in a top-level domain
name established by MSS Provider is strictly prohibited without the prior
written approval of any such top-level domain name by WGT.
7.4 INDEPENDENT CONTRACTOR. MSS Provider is an independent contractor, not an
employee, agent or franchisee of WGT MSS Provider will not represent or hold
itself out as an employee, agent or franchisee of WGT. MSS Provider does not
have any authority to, and will not, create or assume any license, warranty or
other obligation, express or implied, on behalf of WGT. This
Agreement will not be interpreted or construed as creating or evidencing any
association, joint venture or partnership between the Parties or as imposing any
partnership or franchiser obligation or liability on either Party.
7.5 RECORDS; AUDIT. During the Term, and for twelve (12) months after any
expiration or termination of the Term, MSS Provider will keep and maintain
accurate accounts and records regarding each MSS Product managed and all
Distributed Products distributed by MSS Provider, as well as the Product license
keys delivered to End-Users under this Agreement. Upon WGT's request, MSS
Provider will provide access to such records for examination, reproduction, and
audit by WGT, or its representatives. Any such audit will be conducted at such
times and in such a manner so as not to unreasonably interfere with MSS
Provider's normal operations. If any such audit discloses that MSS Provider is
deficient in its compliance with the terms and conditions of this Agreement, MSS
Provider will immediately pay to WGT any deficiency, plus interest at the rate
of one and one-half percent (1.5%) per annum, compounded on an annual basis.
Acceptance of any payment by WGT will be without prejudice to WGT's rights to an
audit under this Section 7.5 or any other rights or remedies afforded to WGT
under any other provision of this Agreement or applicable law.
7.6 TAXES. The Guaranteed Minimum Purchases and all other amounts payable to WGT
under this Agreement do not include sales, use or value added taxes, customs
fees, duties or other governmental taxes or charges. MSS Provider will pay all
such taxes and charges. In the event MSS Provider is required under any
applicable law to withhold any taxes or duties from the amounts specified under
this Agreement, payment of the amounts specified under this Agreement will be
net of such withholding taxes or duties. MSS Provider will pay the amount of all
such withholding taxes and duties and supply WGT with information concerning the
amount and type of tax withheld and any certificates concerning payments of such
withholding tax.
7.7 INTEREST. Any amount not paid when due will be subject to finance charges at
the rate of one and one-half percent (1.5%) per annum, compounded on an annual
basis. Payment of such finance charges will not excuse or cure MSS Provider's
breach or default for late payment. If WGT retains a collection agency, attorney
or other person or entity to collect overdue payments, all collection costs,
including but not limited to reasonable attorney's fees, will be payable by MSS
Provider.
7.8 OWNERSHIP. The Products involve valuable patent, copyright, trade secret,
trade name, trademark and other proprietary rights of WGT. No title to or
ownership of such proprietary rights is transferred to MSS Provider under this
Agreement or by MSS Provider's use of any Trademarks, copyright or other
proprietary right. WGT reserves all of its copyright, trade secret and other
proprietary rights in the Products. MSS Provider will not infringe, violate or
contest and will take appropriate steps and precautions for the protection of,
such proprietary rights.
7.9 IMPLEMENTATION. MSS Provider will take all action during or after the Term
that is reasonably requested by WGT, and at WGT's expense, for the
implementation of the ownership provisions of this Agreement, or to evidence,
perfect, or protect WGT's ownership of the Products and the proprietary rights
associated with ownership of the Products (including, without limitation, the
execution, acknowledgement, and delivery of instruments of conveyance, patent,
copyright, trademark or other proprietary rights, registration applications, or
other documents).
7.10 WARRANTY; RETURNS. WGT will permit MSS Provider and any Product End-Users
purchasing the Distributed Products to return any defective Product in
accordance with the limited warranty contained in the applicable WGT end-user
license agreement or Limited Hardware Warranty, provided that MSS Provider or
the Product End-User has complied with all of the warranty terms and conditions.
In order to receive the remedy provided for hereunder, MSS Provider or the
Product End-User must deliver to WGT a sample of the Product which MSS Provider
or the Product End-User finds to be defective in workmanship or materials, or
damaged in shipment prior to MSS Provider or the Product End-User assuming the
risk of loss or damage, along with a written explanation of the alleged defect
within thirty (30) days from the delivery of such Product to MSS Provider or the
Product End-User. In the event WGT verifies a defect reported by MSS Provider or
the Product End-User and such defect affects more than one (1) Product, then, at
WGT's option, MSS Provider or the Product End-User shall either certify
destruction of or return all allegedly defective Products to WGT. WGT will be
responsible for transportation charges for such Product units sent to WGT's
facilities for service during the one (1) year Limited Hardware Warranty period.
Provided that WGT is able to verify the presence of the reported defect in such
units, transportation charges, via a mode of transportation chosen by WGT, shall
be borne by WGT to return the Product units from WGT's location to MSS Provider
or the Product End-User's location. Upon verification of a defect in one (1) or
more Product returned in accordance with the foregoing, or upon MSS Provider's
or the Product End-User's certification that it has destroyed any defective
Product in compliance with WGT's instructions, WGT will, at its option, either
issue a credit to MSS Provider or the Product End-User in the amount of the
purchase price paid or payable for such Product, ore replace the defective
Product with an identical (non-defective) Product. Such remedy will be exclusive
and in full satisfaction of MSS Provider's and the Product End-User's claims
hereunder. WGT does not warrant the Product free from all bugs, errors, defects,
design flaws or omissions. The warranties in this Agreement apply only to the
latest version of each Product made available by WGT. Such warranties will not
apply to any Product which WGT determines has been subject to misuse, neglect,
improper installation, repair, alteration or damage by MSS Provider or the
Product End-User. WGT's obligations under this paragraph will not apply to the
extent arising out of any use or combination of the Product with any other
products, goods, services or other items furnished by anyone other than WGT, or
to any modification or change of the Product not made by WGT. The foregoing
warranties and rights may be asserted by MSS Provider only. Notwithstanding the
above, WGT shall defend and indemnify MSS Provider with regard to any claims,
liabilities, costs, expenses or losses asserted by any End-User relating to any
defect, deficiency or nonconformity in any Product furnished by or on behalf of
WGT, subject to the terms of the Limited Hardware Warranty and applicable
end-user license agreements accompanying the Products.
7.11 INFRINGEMENT. WGT represents that it is free to enter into this Agreement
as the legal owner of full title and rights to, as applicable, all patents,
trademarks and copyrights with regard to the Products, and has not received any
notice or notification of any other individual or entity claiming any
infringement of the same. As such, WGT will defend and indemnify MSS Provider
against any judicial proceeding based upon infringement of any U.S. patent or
U.S. copyright by the Products to the extent that such proceeding arises from or
in connection with a component of the Product manufactured or developed by WGT
and not any third party, provided that MSS Provider notifies WGT of such
proceeding promptly after MSS Provider receives notice thereof, WGT has control
over the defense and settlement of the proceeding, MSS Provider provides
such assistance in the defense and settlement of the proceeding as WGT may
reasonably request, and MSS Provider complies with any settlement or court order
made in connection with such proceeding (e.g., as to the future use of any
infringing Product). WGT's obligations under this paragraph will not apply to
any infringement to the extent arising out of any use or combination of the
Product with any other products, goods, services or other items furnished by MSS
Provider or anyone other than WGT or to any modification or change of the
Product not made by WGT.
7.12 DISCLAIMER AND RELEASE. THE WARRANTIES OF WGT AND THE REMEDIES OF MSS
PROVIDER SET FORTH IN SECTIONS 7.10 AND 7.11 ARE EXCLUSIVE AND IN SUBSTITUTION
FOR, AND MSS PROVIDER HEREBY WAIVES, RELEASES AND DISCLAIMS, ALL OTHER
WARRANTIES, OBLIGATIONS AND LIABILITIES OF WGT AND ALL OTHER RIGHTS, REMEDIES
AND CLAIMS OF MSS PROVIDER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE,
WITH RESPECT TO ANY DEFECT, DEFICIENCY OR NONCONFORMITY IN ANY PRODUCT OR OTHER
ITEM FURNISHED BY OR ON BEHALF OF WGT UNDER THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE; IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING
OR USAGE OF TRADE; ANY OBLIGATION, LIABILITY, RIGHT, REMEDY OR CLAIM IN TORT
(INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY,
STRICT LIABILITY OR OTHER THEORY; AND CLAIM OF INFRINGEMENT.
7.13 REPRESENTATIONS. MSS Provider will be solely responsible for any
representations or warranties MSS Provider may make to any End-User or other
third party with respect to the Product or any products, goods, services or
other items provided by MSS Provider. Except to the extent inconsistent with
Section 7.11, MSS Provider releases and will defend, indemnify and hold harmless
WGT and its officers, directors, employees, agents and representatives from any
and all claims, losses, damages, liens, liabilities, costs and expenses
(including, but not limited to, reasonable attorneys' fees) incurred or asserted
by any End-User or other third party otherwise arising out of or in connection
with (a) any misrepresentation, negligent or tortious act or omission, or breach
of or default under this Agreement by MSS Provider or by anyone else acting for
or on behalf of MSS Provider in connection with the promotion, managing,
distribution, or other dealings, as applicable, with respect to the Products;
(b) any End-User or other third party use of the Product or any products or
services of MSS Provider; or (c) any representations and warranties regarding
the Products made by MSS Provider that are inconsistent with or in addition to
the warranties made in WGT's end-user license agreement or Limited Hardware
Warranty, as applicable, accompanying each Product.
7.14 LIMITATIONS OF LIABILITY. EXCEPT AS PROVIDED IN SECTION 7.11, WGT'S
LIABILITY (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE WHETHER
ACTIVE, PASSIVE, IMPUTED), PRODUCT LIABILITY STRICT LIABILITY OR OTHER THEORY)
UNDER THIS AGREEMENT OR WITH REGARD TO ANY PRODUCT OR OTHER ITEMS FURNISHED
UNDER THIS AGREEMENT WILL IN NO EVENT EXCEED THE COMPENSATION PAID TO WGT
CONCERNING SUCH PRODUCT UNDER THIS AGREEMENT.
7.15 CONSEQUENTIAL DAMAGES. IN NO EVENT WILL WGT BE LIABLE, WHETHER IN CONTRACT,
WARRANTY, TORT (INCLUDING NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED),
PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY), TO MSS PROVIDER, ANY
END-USER OR ANY OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION
DAMAGES FOR LOSS OF PROFIT, BUSINESS OR DATA) ARISING OUT OF ITS PERFORMANCE OR
NONPERFORMANCE OF THIS AGREEMENT OR THE USE OF, INABILITY TO USE OR RESULTS OF
USE OF THE PRODUCT.
7.16 COMPLIANCE WITH LAWS. In performing this Agreement, both Parties will
comply with all applicable laws, regulations and other requirements, now or
hereafter in effect, of government authorities having jurisdiction.
7.17 EXPORT. Without limiting anything else herein, MSS Provider will not export
or re-export, directly or indirectly, any Product to any country to which export
or re-export of such items is prohibited by the U.S. Export Administration Act,
regulations of the U.S. Department of Commerce and other export controls of the
U.S., as they may be amended, without first obtaining an appropriate written
authorization from the U.S. Office of Export Licensing or its successor. At the
time of execution of this Agreement, MSS Provider is prohibited from exporting
or re-exporting, directly or indirectly, the Products to the following
countries: Cuba, Libya, North Korea, Iran, Iraq, Rwanda, Sudan, Syria and the
Federal Republic of Yugoslavia (Serbia and Montenegro). Notwithstanding the
foregoing list, MSS Provider is not relieved from its obligations to comply with
the foregoing export control laws, as such laws may be amended from time to
time. MSS Provider shall also comply with all other foreign or local
governmental export and import control laws, regulations and rules.
7.18 GOVERNMENT APPROVALS. MSS Provider will obtain at its expense all licenses,
permits and other governmental approvals; will provide all notices; and will pay
all duties, taxes and other charges required for the license, export, re-export
and import of the Products managed and/or distributed, as applicable, by MSS
Provider; the license of the Software managed and/or distributed, as applicable,
by MSS Provider; and the implementation of this Agreement.
7.19 NO IMPLIED WAIVER. If either Party fails to require performance of any duty
hereunder by the other Party, such failure shall not affect its right to require
performance of that duty or any other duty thereafter. The waiver by either
Party of a breach of any provision of this Agreement shall not be a waiver of
the provision itself or a waiver of any breach thereafter, or waiver of any
other provision herein.
7.20 ASSIGNMENT. Neither party will assign or transfer all or any part of this
Agreement of any or its rights under this Agreement without the prior written
consent of the other Party, such consent not to be unreasonably withheld.
Subject to the foregoing, this Agreement will be fully binding upon, inure to
the benefit of and be enforceable by the Parties and their respective successors
and assigns.
7.21 SURVIVAL. Sections 6.5, 7.1, 7.4 through 7.9 and 7.11 through 7.27 and all
accrued obligations to pay, together with all other provisions of this Agreement
which may reasonably be
interpreted or construed as surviving the expiration or termination of the
Term, will survive the expiration or termination of the Term.
7.22 NOTICES. Any notice or other communications under this Agreement given by
either Party to the other will be in writing and delivered to an officer of the
Party either (a) in person or by first-class, registered or certified mail or a
recognized overnight delivery service, return receipt requested, postage prepaid
or (b) by facsimile and then acknowledged as received by return facsimile by the
intended recipient. Notices will be deemed received only upon actual receipt.
Notices will be directed to the intended recipient at the address specified
below the signature on the signature page of this Agreement. Either Party may
change its address by giving the other Party notice of such change in accordance
with this paragraph.
7.23 NO CONFLICT. Both Parties represent and warrant that they are free to enter
into and perform this Agreement without thereby being in breach of or default
under the terms of any other contract, commitment or understanding.
7.24 INTERPRETATION. The English language of this Agreement will govern any
interpretation of or dispute regarding the terms of this Agreement. Paragraph
captions are for convenience of reference and do not alter or limit the terms of
this Agreement. The Parties hereto have expressly required that the present
Agreement and its Exhibits be drawn up in the English language. Les parties aux
presentes ont expressement exige que la presente conventions et se Annexes
solent redigees en la langue anglaise.
7.25 GOVERNING LAW; VENUE. This Agreement will be governed by and interpreted in
accordance with the local laws of the State of Washington, U.S.A., without
regard to its conflicts of law provisions and not including the provisions of
the 1980 U.N. Convention in Contracts for the International Sale of Goods. Both
Parties consent and submit to the jurisdiction of the Federal and State courts
located in a neutral State to be mutually agreed upon in good faith between the
Parties. Except as provided elsewhere herein, any remedy of the Parties set
forth in this Agreement is in addition to any other remedy afforded to each
Party under this Agreement, any other contract, by law or otherwise.
7.26 EXCUSED PERFORMANCE. Neither Party will be liable for, or be considered to
be in breach of or default under this Agreement on account of any delay or
failure to perform as required by this Agreement (other than any delay or
failure in the payment of money) as a result of any cause or condition beyond
such Party's reasonable control.
7.27 ENTIRE AGREEMENT. This Agreement is the exclusive Agreement between the
Parties with respect to its subject matter and, as of the Effective Date,
supersedes all prior and contemporaneous agreements, negotiations,
representations and proposals, written or oral, related to its subject matter.
Its terms cannot be modified, supplemented or rescinded, except by an agreement
in writing signed by an authorized representative of each Party. Neither Party
shall be bound by or be liable to the other Party for any representations,
promise or inducement made by an agent or person in the other's employ, which is
not embodied in this Agreement. No additional conflicting terms submitted on any
order acceptance, or similar form shall become a part of this Agreement. In the
event of any discrepancy or inconsistency between this Agreement and any other
form used by either Party in connection herewith, the terms of this
Agreement shall govern. The Parties acknowledge that they have read this
Agreement and agree to be bound by its terms and conditions.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the Effective
Date.
MSS PROVIDER: WGT:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇ By: /s/
------------------------------- ---------------------------------
Title: CEO Title: EVP, Sales
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., S.,
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 200 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------- ------------------------------------
Date: 12/30/98 Date: 12/30/98
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EXHIBIT A
COMPENSATION AGREEMENT
The fees and other amounts payable by MSS Provider to WGT under this
Compensation Agreement shall be in U.S. Dollars as follows:
A. ANNUAL COMMITMENT LEVEL*: 100, 250 or 750 Firebox Units
*Excludes Distributed Products purchases
Firebox II units: 60*
B. MSS PRICING SCHEDULE:
Firebox II/unit (1) [*]
NOC Security Suite $N/A (Included in Firebox (2) [*]
Of $20,000.00, or the difference between
$50,000.00 and the number of boxes purchased
x $500.00] in the event that 100 Firebox II units
Are not purchased by 11/30/99.]
NOC Security Suite Renewal Fee(3) [*]
(3)payable per section 5.3 of the agreement
Firebox Monitors [*]
MSS Technical Certification Class [*]
C. MSS GUARANTEED MINIMUM PURCHASES(4)
(4)Quarters indicated are based on the Effective Date of the Agreement
Q1 - Initial Order [ * ] Delivery Date: 12/31/98
Q2 - Minimum Purchase [ * ] Delivery Date: 03/31/99
Q3 - Minimum Purchase [ * ] Delivery Date: 06/30/99
Q4 - Minimum Purchase [ * ](5) Delivery Date: 9/30/99
5 [ * ]
Total Year One (1) Minimum Purchases *
D. DISTRIBUTED PRODUCTS PRICING SCHEDULE:
DISTRIBUTED PRODUCTS DISCOUNT:(6) [*]
(6) [*]
E. TERRITORY: North America
F. POINT OF SALE REPORTS: Provide to WGT monthly per Section 4.1(d) of
the Agreement.
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the Securities
and Exchange Commission.
Note: Some MSS Products are available for purchase only in multiples of five
(5). Year two (2) Guaranteed Minimum Purchases shall be mutually agreed upon
between the parties in Q4 of year one (1).
