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EXHIBIT 10.16
XXXXXX.XXX CORP.
MASTER OEM DISTRIBUTOR AGREEMENT FOR JAPAN
This Master OEM Distributor Agreement (the "Agreement") is effective as
of January 1, 2000 (the "Effective Date") by and between XxXxxx.xxx, Corp., a
Delaware corporation, with its principal place of business at 0000 Xxxxxx
Xxxxxx, Xxxxx Xxxxx, XX 00000 ("XxXxxx.xxx"), and Network Associates K.K. a
Japanese corporation, with its principal place of business at Toranomon Xx. 00
Xxxx Xxxx., 0-0-00 Xxxxxxxxx, Xxxxxx-xx Xxxxx 000 Xxxxx ("Distributor").
RECITALS
WHEREAS, McAfee owns and/or markets certain computer software services
and products;
WHEREAS, Distributor licenses computer products to End Users and to its
authorized OEMs, system integrators and resellers and offers post-sales support
services and software evaluation libraries through its sales offices and/or
resale locations;
WHEREAS, Distributor desires to license the Products from XxXxxx.xxx in
order to sub-license the Products in Japan to OEMs for the sole purpose of
producing OEM Products for distribution to End Users and Resellers, and
XxXxxx.xxx desires to make the Products available to Distributor for these
purposes.
IN CONSIDERATION of the foregoing premises, the parties agree that the
terms and conditions attached and incorporated herein shall govern the
distribution of the Products by Distributor.
IN WITNESS WHEREOF, the parties have executed this Agreement.
NETWORK ASSOCIATES K.K.
Address for Notices:
Network Associates K.K. Signed: /s/ Xxxxxxxx Xxxx
Toranomon No. 33 Mori Bldg. --------------------------------
Toranomon, Minato-ku Name: Xxxxxxxx Xxxx
Xxxxx 000 Xxxxx Title: Representative Director
Fax: 00-0-0000-0000
Attention: Representative Director
XXXXXX.XXX CORP.
Address for Notices:
XxXxxx.xxx Corp. Signed: /s/ Xxxxxxx Xxxxxxx
0000 Xxxxxx Xxxxxx --------------------------------
Xxxxx Xxxxx, Xxxxxxxxxx X.X.X. 00000 Name: Xxxxxxx Xxxxxxx
Fax: Title: President, Chief Executive
Attention: Officer and Director
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TERMS AND CONDITIONS OF AGREEMENT
1. DEFINITIONS
(a) "Agreement" means this Agreement, fully executed by the parties,
which includes all Attachments.
(b) "Attachments" means addenda, including any exhibits or schedules
to this Agreement describing the License Fees, and any special
terms and conditions pertaining to this Agreement.
(c) "End User" means the entity to whom the End User License
Agreement applies, who uses the Products for internal use and
not for re-sale, marketing, leasing or renting, and who has
obtained the Products bundled or pre-installed by an OEM.
(d) "End User License Agreement" means the license to use the
Products, which shall be included with each Product and in the
form of Exhibit A (or a translation thereof or as specified by
XxXxxx.xxx
(e) "Error" means any reproducible failure of the Products to
perform its intended functions or any significant inaccuracies
in the End User Documentation.
(f) "License Fees" has the meaning set forth in Section 5(a).
(g) "Localization Services" has the meaning set forth in Section
4(j).
(h) "Marketing Materials" include all data sheets, reference
stories, product literature, CDs, and related items.
(i) "Master Distributor Agreement" means that certain Master
Distributor Agreement between Distributor and NAI dated January
1, 2000, as such agreement is renewed, amended, supplemented or
revised from time to time.
(j) "NAI" means Network Associates, Inc., a Delaware corporation.
(k) "OEM" means, and shall be limited to, an original computer
equipment manufacturer who preinstalls or bundles software with
its personal computer hardware.
(l) "OEM Product" means, and shall be limited to, an OEM's personal
computer hardware loaded or bundled with the Products or with
software which accesses PC Clinic.
(m) "PC Clinic" means the paid subscription service of XxXxxx.xxx
referred to as "PC Clinic" and all upgrades, new versions or
successor products thereof, generally made available by
XxXxxx.xxx in the Territory from time to time in its sole
discretion.
(n) "Products" means all current and future NAI software products
licensed to XxXxxx.xxx by NAI pursuant to that certain
Technology Cross License Agreement dated January 1, 1999, but
only to the extent that XxXxxx.xxx is authorized to license such
software products to Distributor within the Territory without
infringement of third party rights.
(o) "Resellers" means individuals and companies that distribute the
OEM Products to End Users or to other Resellers in the
Territory.
(p) "Single User" means and End User who acquires the right to use
the software product from an OEM or Reseller under an End User
License Agreement for single-node, individual-consumer home
office or single-node, individual-small office use only and not
for resale or multi-user usage.
(q) "Subscription" means a subscription for PC Clinic generated.
from end users of OEM Products.
(r) "Territory" is Japan, in which the Distributor agrees to confine
its sales and marketing activities.
2. APPOINTMENT. XxXxxx.xxx appoints Distributor as the exclusive (subject to the
provisos below) distributor of the Products to OEMs in the Territory for the
sole purpose of authorizing such OEMs to produce OEM Products for distribution
to Resellers or End Users, and Distributor accepts this appointment. To perform
its obligations as exclusive (subject to the provisos below) distributor,
XxXxxx.xxx grants to Distributor the non-transferable, fee-bearing right to
reproduce the Products, market and distribute them to OEMs in the Territory,
subject to the terms of the End User License Agreement that accompanies each
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Product. PROVIDED, HOWEVER, that (i) with respect to distribution of PC Clinic
to OEMs, Distributor's exclusive license shall apply only for the OEMs listed on
Exhibit C or their affiliates, and Distributor's PC Clinic distribution right
for other OEMs shall be non-exclusive, and (ii) the exclusive license granted by
XxXxxx.xxx to Distributor may be changed to a non-exclusive license by
XxXxxx.xxx (without obligation, penalty or other change in the terms and
conditions of this Agreement) upon 60 days prior written notice by XxXxxx.xxx at
any time during the Term (or any renewal term) subsequent to Distributor's
failure to meet or exceed the Minimum Performance Targets set forth in Exhibit
E.
3. DISTRIBUTION.
(a) Distributor's Distribution Right. Distributor, as an independent
distributor, at its own risk and expense and subject to any such prices,
contractual terms and conditions as Distributor may from time to time determine,
shall distribute the Products to OEMs solely for distribution, marketing and
sale to Resellers and End Users as a component of an OEM Product. The
distribution of Products by Distributor to OEMs shall be governed by an OEM
agreement in form and substance acceptable to XxXxxx.xxx, the terms of which
shall not grant to the OEM rights exceeding the rights granted to Distributor
under this Agreement and shall be no less favorable to and protective of
XxXxxx.xxx in all material respects than this Agreement, provided that each of
the Distributor's existing OEM license agreements as of the Effective Date which
are set forth in Exhibit C hereto are deemed acceptable to XxXxxx.xxx.
XxXxxx.xxx shall not unreasonably withhold or delay its consent to the form of
an OEM agreement proposed by Distributor, such consent to be deemed given if
XxXxxx.xxx fails to respond to Distributor's written request for approval within
five (5) business days after it receives such request. Distributor may submit
for approval to XxXxxx.xxx proposed OEM agreements in their original Japanese
language form, provided a summary of key business terms (royalty amount and
payment terms, term of contract, product, upgrade rights of end users, and term
of End User License Agreement) in also submitted in English. Distributor's
exclusive right of distribution is limited to OEMs with their principal place of
business located in the Territory.
(b) Limitation on Online Distribution. Distributor is not authorized to
sell, supply or distribute the Products via the Internet (i) to Single Users or
(ii) to OEMs, Resellers, or other Original Equipment Manufacturers, resellers or
sub-distributors for sale or distribution via the Internet to Single Users;
provided that such restriction shall not prevent Distributor from fulfilling its
obligations for the remaining term of any such sub-distribution agreements that
are in existence on the Effective Date, which are set forth in Exhibit D hereto.
Any such agreements shall be subject to the License Fees set forth below. After
the establishment of XxXxxx.xxx Japan, Distributor shall not renew any such
agreements, and to the extent any such agreements may be assigned upon their
terms, Distributor shall assign such agreements with the consent of the
sub-distributor to XxXxxx.xxx Japan forthwith. Distributor shall use its best
efforts to obtain the consent of the sub-distributors to assign such agreements
to XxXxxx.xxx Japan.
(c) PC Clinic Changes. XxXxxx.xxx reserves the right in its sole
discretion and without liability to Distributor to add additional Products
features to PC Clinic, change the price for PC Clinic, modify or rename PC
Clinic, change the level of XxXxxx.xxx's support for PC Clinic and/or
discontinue the availability of PC Clinic in the Territory. XxXxxx.xxx retains
the right to discontinue distribution of PC Clinic through Distributor upon
giving Distributor thirty (30) days prior written notice of such discontinuance.
XxXxxx.xxx will use reasonable efforts to provide Distributor with thirty (30)
days notice prior to any such change.
(d ) XxXxxx.xxx Distribution Rights. As between XxXxxx.xxx and
Distributor, XxXxxx.xxx shall have the right, but not the obligation, to
distribute updates or renewals of the Products or cross sales to other products
via the Internet (or an Internet link bundled with or into the Products) and
shall be entitled to retain 100% of any revenue therefrom except to the extent
provided in Exhibit B. For avoidance of doubt, XxXxxx.xxx agrees not (i) grant
any multi-user licenses to the Products for use within the Territory, or (ii)
distribute packaged versions of the Products (other than PC Clinic) within the
Territory.
(e) Term of End User License Agreement. The term to be proposed to each
OEM of the license granted in the End User License Agreement for PC Clinic shall
be set by XxXxxx.xxx in its sole discretion. Distributor may set the term to be
proposed to each OEM of the license granted in the End User License Agreements
for other Products supplied to OEMs, provided that, without the prior written
consent of XxXxxx.xxx (which shall not be unreasonably withheld or delayed),
such license term shall not exceed twelve months for such other Products
supplied to OEMs pursuant to any OEM agreement entered into or renewed after
August 1, 2000.
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4. MARKETING.
(a) Products. XxXxxx.xxx will make available, and Distributor is granted
the right to obtain, the Products via electronic means. Distributor is also
granted the right to obtain all Marketing Materials. The parties hereby
acknowledge that to the extent they use words such as "purchase", "sale",
"purchase price", "fees", and similar words with respect to the Products, they
do so for convenience and do not intend to imply that the Products are being
sold.
(b) General. Distributor will use commercially reasonable efforts to
market the Products to OEMs to the best of its ability, and to that end will (i)
provide a sufficient number of competent sales and support representatives
trained and knowledgeable about the Products, capable of answering OEM questions
regarding the Products, demonstrating the Products, informing OEMs about the
Product features, assisting OEMs in determining which Products will best meet
their needs and providing pre-and post-sale technical assistance, service and
support for the Products, (ii) conduct marketing activities to OEMs, (iii)
maintain a sufficient inventory of the Products to satisfy anticipated demand
from OEMs, (iv) make Products sales and promotional materials available to OEMs,
(v) provide training for the Products as part of Distributor's new hire
orientation, (vi) support special promotions to OEMs, and (viii) maintain a
sound financial condition. Distributor will conduct its business in a manner
that reflects favorably upon the Products and XxXxxx.xxx. Distributor will
ensure the media for each Product distributed by the Distributor contains a
label bearing a NAI or XxXxxx.xxx copyright, as the case may be, and the
particular Product trademark. Distributor shall cause the OEM to agree to bundle
each copy of such media for the Products with the applicable End User License
Agreement before shipment to Resellers and End Users. Distributor shall not in
any event remove from or obscure upon any Products any labels placed thereon by
XxXxxx.xxx containing statements of restrictions upon distribution, without the
prior written consent of XxXxxx.xxx. Distributor must provide all of the files
that XxXxxx.xxx includes with a particular Product to Distributor's OEMs as a
whole with all DOC, TXT, DLL and other files included with all COM and EXE
files.
(c) Advertising; Use of Trademarks. Solely within the Territory,
Distributor may advertise and promote the Products in a commercially reasonable
manner and, subject to the provisions of Section 15, may use trademarks and
service marks provided by XxXxxx.xxx or NAI in connection therewith, provided
that all such promotions and advertising will be consistent with XxXxxx.xxx's
general quality standards and the provisions of this Agreement.
(d) Trademarks Rights. XxXxxx.xxx and/or NAI owns any and all
trademarks, trade names, and service marks for the Products. Such trademarks,
trade names, and service marks shall include all product names, the names
"McAfee" and "XxXxxx.xxx", logos, designs, and other designations or brands used
by XxXxxx.xxx and NAI in connection with the Products. Distributor acknowledges
and agrees that XxXxxx.xxx is not granting to Distributor any rights in any
Product trademark, trade name, or service xxxx in or outside of the Territory.
Distributor shall not attempt to register any Product trademark, or any trade
name or service xxxx which is similar to the Products' trademark, trade name or
service xxxx in or outside of the Territory during or after the term of this
Agreement. Distributor agrees that only NAI and/or XxXxxx.xxx, as the case may
be, is entitled to register such trademarks, trade names, and service marks in
any class of products or services in the Territory. If Distributor has any
ownership or rights or claims to any XxXxxx.xxx trademarks, trade names, or
service marks, then Distributor agrees to so notify XxXxxx.xxx and agrees that
such ownership or rights or claims are transferred to XxXxxx.xxx on the
Effective Date of this Agreement. The compensation to Distributor for the
transfer of such ownership or rights or claims shall be $1.00.
(e) XxXxxx.xxx Marketing Support. XxXxxx.xxx will make available to
Distributor all Marketing Materials ordinarily, and without any compensation,
made available to its Resellers and OEMs regarding technical, sales, and
marketing information for the Products.
(f) Sales and Technical Training. XxXxxx.xxx will provide Distributor
with sales and technical training on existing and new Products at a level which
XxXxxx.xxx determines is commensurate with the revenues generated by
Distributor.
(g) PC Clinic; Joint Sales Calls. Distributor agrees to use its best
efforts to migrate OEMs from the VirusScan product to PC Clinic, provided that
(i) Distributor has received sufficient pre-sales support for PC Clinic to make
such migration commercially practicable, (ii) PC Clinic meets any applicable
product testing and quality standards of the relevant OEM and (iii) XxXxxx.xxx
is solely responsible for PC Clinic product quality. XxXxxx.xxx and Distributor
shall make joint sales calls to OEMs in order to promote such OEM's transition
to PC Clinic. Both parties agree to cooperate in promoting the Products in the
Territory.
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(h) Competing Products. During the term of this Agreement, Distributor
agrees not to market to OEMs any products that directly or indirectly compete
with the Products, and shall not engage in any competitive activities or make
any investments in or with any competitor offering competing products, except
with the prior written consent of XxXxxx.xxx. Notwithstanding the foregoing,
Distributor may market, distribute and sell any NAI products in accordance with
the Master Distributor Agreement (except to the extent the rights granted in the
Master Distributor Agreement may be deemed to alter the terms of this
Agreement), and this Agreement shall not be construed as to limit or reduce the
rights of Distributor under such agreement with NAI. For the avoidance of doubt
no rights are granted to Distributor under the Master Distributor Agreement with
respect to sales to OEMs, or for PC Clinic.
(i) No Modification. Except with the prior approval of XxXxxx.xxx,
Distributor agrees not to alter, remove, or modify any serial number,
identifying number, trademark, End User License Agreement, registration card,
copyright or other proprietary rights notices contained in or on the Products or
any materials supplied under this Agreement. Distributor will not apply any
other trademarks, logos or notices to the Products.
(j) Localization. Distributor agrees to provide reasonable assistance to
XxXxxx.xxx, at XxXxxx.xxx's expense, with localization, translation,
engineering, porting, printing, web-site localization and other work required to
create Japanese language OEM versions of the Products and Marketing Materials
(the "Localization Services"). XxXxxx.xxx shall own the copyrights to resulting
Japanese-language translations and other work product (the "Work Product") to
the extent that XxXxxx.xxx has borne the expense of the creation of such Work
Product. The agreed non-binding target date for completion of the localization
of the initial Japanese language version of PC Clinic is September 30, 2000.
(k) XxXxxx.xxx K.K. Distributor and XxXxxx.xxx agree to cooperate in the
establishment of XxXxxx.xxx K.K. ("XxXxxx.xxx Japan"), a wholly owned subsidiary
of XxXxxx.xxx to be established after the date hereof. Distributor shall
provide, at XxXxxx.xxx Japan's expense (equal to a reasonable allocation of
actual costs), office space for up to ten (10) employees of XxXxxx.xxx Japan.
(l) Quarterly Progress Meetings. Representatives of each party shall
meet on a quarterly basis to discuss the progress of product development,
localization and marketing.
5. LICENSE FEES, REPORTS, TAXES.
(a) License Fees. The license fees ("License Fees") to be paid to
XxXxxx.xxx by Distributor for any license or Marketing Materials provided by
Distributor to OEMs, and to Distributor by XxXxxx.xxx for any Subscriptions
generated through an OEM, are set forth in Exhibit B. Each party agrees to pay
License Fees quarterly regardless of the other party's invoice date. The License
Fees are denominated in Japanese Yen ((Y)), but if requested by XxXxxx.xxx,
payments to XxXxxx.xxx shall be payable by Distributor to XxXxxx.xxx in U.S.
Dollars converted from Japanese Yen at the exchange rate available to
Distributor on the date of payment. All payments will be made via wire transfer
to a bank account designated by XxXxxx.xxx.
(b) Distributor's Reports. Distributor will provide a customer and sales
report to XxXxxx.xxx in a detailed format acceptable to XxXxxx.xxx within
fifteen (15) business days after the end of each quarter during the term of this
Agreement, including listing (and if requested by XxXxxx.xxx, providing copies
of) licenses granted by Distributor to all OEMs for all Products for that
quarter. Such customer and sales reports will be the basis for XxXxxx.xxx's
invoice for such sales to Distributor for that quarter. Distributor will also
provide a forecast report and a customer opportunities report in a format
acceptable to XxXxxx.xxx within five (5) business days after each quarter during
the term of this Agreement. All such reports will be sent via e-mail to
XxXxxx.xxx.
(c) XxXxxx.xxx's Reports. XxXxxx.xxx will provide a customer and sales
report to Distributor in a detailed format acceptable to Distributor within
fifteen (15) business days after the end of each quarter during the term of this
Agreement, which lists the number of new Subscriptions for that quarter. Such
customer and sales reports will be the basis for Distributor's invoice for such
sales to XxXxxx.xxx for that quarter. XxXxxx.xxx will also provide a forecast
report and a customer opportunities report in a format acceptable to Distributor
within five (5) business days after each quarter during the term of this
Agreement. All such reports will be sent via e-mail to Distributor.
(d) Taxes. All amounts payable by any paying party to a receiving party
under this Agreement are exclusive of any tax, withholding tax, levy, or similar
governmental charge that may be assessed by any
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jurisdiction in the Territory or in the United States. Withholding for corporate
or personal income taxes, if any, required by the government of Japan or the
United States on the amounts payable pursuant to this Agreement shall be
withheld and paid by the paying party to the appropriate tax authorities, and
the amounts payable shall be subject to deductions of amounts equivalent to such
withholding taxes. The paying party shall cooperate with the receiving party and
provide any documentation necessary to reduce the withholding tax rate to the
lowest legal rate. Promptly after each such tax payment, the paying party shall
forward to the receiving party the official tax receipts or other evidence
issued by the tax authorities concerned. The paying party shall assist the
receiving party in preserving and exercising whatever right the receiving party
may have to contest by appropriate proceedings the validity or amount of any tax
thus withheld.
6. TERM AND TERMINATION.
(a) Term. The initial term of this Agreement is three (3) years from the
Effective Date. This Agreement shall automatically renew for up to one
additional two (2) year term, provided that (i) Distributor has used its best
efforts to promote the sale of Products to OEMs in the Territory and has met or
exceeded the Minimum Performance Targets set forth on Exhibit E, and (ii) the
Master Distributor Agreement between NAI and Distributor remains in effect.
(b) Termination for Breach. Unless otherwise specified, if either party
fails to comply with any of the terms and conditions of this Agreement, the
other party may terminate this Agreement upon thirty (30) days written notice to
the breaching party specifying any such breach, unless the breach specified
therein has been remedied within such thirty (30) day period.
(c) Termination by XxXxxx.xxx. XxXxxx.xxx may terminate this Agreement
upon fifteen (15) days written notice for the following breaches by Distributor
unless such breaches are cured within such fifteen (15) day period: (i)
Distributor fails to pay amounts due from sales reports within thirty (30) days
pursuant to Section 5(a) or any XxXxxx.xxx invoice within 30 days of issuance;
(ii) Distributor markets any competing products or otherwise violates Sections
3(b) or 4(h) without XxXxxx.xxx's written consent; or (iii) Distributor misuses
XxXxxx.xxx's trademarks in violation of Sections 4(c) or 4(d).
(d) Termination for change in business. XxXxxx.xxx may terminate this
agreement immediately if (i) there is any material change in the ownership or
management of Distributor, or Distributor's business or assets where such change
no longer meets the requirements of this Agreement or where ownership is
transferred to a competitor of XxXxxx.xxx or NAI; (ii) a receiver is appointed
for Distributor or its property; (iii) Distributor becomes insolvent or unable
to pay its debts as they mature; (iv) Distributor makes an assignment for the
benefit of creditors; or (v) Distributor becomes the subject of any proceeding
under any bankruptcy, insolvency, wagi, company reorganization, or debtor's
relief law.
(e) Effect of Termination. Upon termination, all outstanding License
Fees will be immediately due and payable. Distributor shall have no further
right to distribute the Products or any related materials.
(f) No Liability, Damages. Neither party will be liable for damages or
costs of any nature arising from the expiration or termination of this Agreement
in accordance with its terms.
(g) Survival beyond Termination. Those rights and obligations that by
their nature extend beyond the term of this Agreement shall survive any
termination or expiration of this Agreement.
7. TECHNICAL SUPPORT.
(a) XxXxxx.xxx Support. XxXxxx.xxx will provide technical support to
Distributor via telephone, email, and fax as needed to assist Distributor in
performing its duties described in 7(b). XxXxxx.xxx shall invoice Distributor
for such technical support at XxXxxx.xxx's customary rates charged to third
parties. XxXxxx.xxx will not provide support directly to any of Distributor's
OEMs or any Resellers or End Users unless as agreed between the parties.
(b) Distributor Support. Distributor shall be solely responsible for
providing technical support via telephone, email, and fax to the OEMs with
respect to the Products other than PC Clinic. At a minimum, Distributor shall
provide technical support with respect to such Products to the OEMs including
the following: (i) assisting with installation, operation, and use of the
Products; (ii) preparing all Error reports, forwarding these to XxXxxx.xxx, and
conducting necessary call backs; (iii) furnishing Error corrections to OEMs
provided to Distributor by XxXxxx.xxx. Upon termination of this Agreement,
Distributor expressly
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acknowledges its obligation to continue to support all of Distributor's OEMs and
their End Users who still have a valid subscription license for any Product or a
separate support agreement with Distributor for the remaining term of such
subscription or agreement. XxXxxx.xxx shall be solely responsible for providing
technical support with respect to PC Clinic.
(c) New Viruses. Distributor agrees to provide any new suspected virus
to XxXxxx.xxx technical personnel as soon as possible. Distributor will include
a brief description of how the virus functions with such samples if available.
8. INSPECTIONS, RECORDS AND REPORTING.
(a) Notification. Distributor will notify XxXxxx.xxx in writing of any
claim made or proceeding initiated against XxXxxx.xxx or Distributor involving
the Products within ten (10) days after Distributor learns of such claim or
proceeding. Distributor will also report promptly to XxXxxx.xxx all claimed or
suspected Product Errors or violations of the End User License Agreement.
Distributor will notify XxXxxx.xxx in writing not more than thirty (30) days
after any change in the management or control of Distributor or any transfer of
more than five percent of Distributor's voting control or a transfer of
substantially all its assets.
(b) Records. For two (2) years after each calendar quarter during the
term of this Agreement, Distributor will keep full and accurate books of account
and copies of all documents and other materials for such quarter relating to
this Agreement and Distributor's records, accounts and contracts relating to the
distribution of the Products at Distributor's office.
(c) Audit. Each party and its representatives, upon reasonable advance
notice to the other party and at the examining party's cost, shall have the
right at any time during the term of this Agreement, and for two (2) years
thereafter, to examine such books, records, correspondence, quotations, orders
and other documents as it may deem necessary and appropriate. Such audit shall
be conducted during regular business hours at the examined party's offices and
in such manner as not to interfere with the examined party's normal business
activities. All information from such inspections will be disclosed only to
those who need to know the contents in the discharge of their duties to the
examining party under this Agreement. If such inspections should disclose any
under reporting of License Fees, then the paying party shall promptly pay to the
receiving party such amount, together with interest thereon at the lesser of the
rate of 1 1/2% per month or the maximum allowable by applicable law from the
date on which such amount became due to the receiving party from the paying
party, plus any reasonable fees (including accounting or legal fees) incurred by
the paying party associated with the audit.
9. GOVERNMENT APPROVALS. Distributor shall, at its own expense, obtain and
arrange for the maintenance in full force and effect of all government
approvals, consents, licenses, authorizations, declarations, filings, and
registrations as may be necessary for the performance of the terms and
conditions of this Agreement, including without limitation, fair trade
approvals, under all laws, regulations, and other legal requirements within the
Territory that apply to this Agreement, including tax and foreign exchange
legislation.
10. EXPORT. Distributor acknowledges that the laws and regulations of the United
States may restrict the export and re-export of certain commodities and
technical data of United States origin, including the Products in any medium.
Distributor agrees that it will not export or re-export the Products in any form
without the appropriate United States and foreign government licenses.
11. WARRANTIES
(a) Limited Warranty. XxXxxx.xxx warrants that for a period of 30 days
from the date of delivery to Distributor that (i) any media on which the Product
is furnished will be free from defects in materials and workmanship under normal
use; (ii) the Products contain the features described in the appropriate data
sheet. Except for the foregoing, to the full extent allowed by applicable law,
the Products are provided "AS IS". Distributor's exclusive remedy and
XxXxxx.xxx's entire liability under this limited warranty will be at
XxXxxx.xxx's option to repair or replace the Product.
(b) No Other Warranties. OTHER THAN AS SET FORTH HEREIN, XXXXXX.XXX
DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES OR CONDITIONS WITH REGARD TO THE
PRODUCTS, INCLUDING WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND NON INFRINGEMENT OF THIRD PARTY RIGHTS. NO
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PERSON IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR REPRESENTATION CONCERNING THE
PRODUCTS OTHER THAN AS PROVIDED IN THE END-USER LICENSE AGREEMENT. Distributor
shall be solely responsible for any claims, warranties or representations made
by Distributor or Distributor's employees or representatives that differ from
the warranty provided by XxXxxx.xxx or its licensors. In addition, where
Distributor produces any materials and supplies them to OEMs or their End Users,
Distributor will be solely responsible for all remedies and warranties for any
defects or errors in any such materials so supplied.
12. INDEMNIFICATION.
(a) Indemnification of Distributor. XxXxxx.xxx agrees that, if notified
promptly in writing and given sole control of the defense and all related
settlement negotiations, it will defend Distributor against any claim based on
an allegation that a Product in the form supplied by XxXxxx.xxx to Distributor
directly infringes a Japan copyright or Japan trade secret right. Under no
circumstances will XxXxxx.xxx be directly or indirectly deemed to indemnify
Distributor for any Japan patent or trademark claim. To qualify for such defense
and payment, Distributor must: (i) give XxXxxx.xxx prompt written notice of such
claim; (ii) allow XxXxxx.xxx to control and fully cooperate with XxXxxx.xxx in
the defense and all related settlement negotiations; and (iii) diligently
pursue all indemnification and other remedies provided to it under its Master
Distributor Agreement with respect to any alleged infringement. XxXxxx.xxx will
pay any resulting costs, damages and attorneys' fees finally awarded by a court
with respect to any such claims but shall not be responsible for any compromise
made without its consent, or that are subject to indemnification by NAI under
the Master Distributor Agreement . Distributor agrees that, if the Products in
the inventory of Distributor or the operation thereof, become, or in
XxXxxx.xxx's opinion are likely to become, the subject of an infringement claim,
Distributor will permit XxXxxx.xxx, at XxXxxx.xxx's option and expense, to,
among other things: (x) procure the right for Distributor to continue marketing
and using such Products; (y) to replace or modify them so that they become
non-infringing; (z) if neither of the foregoing alternatives is available on
terms that XxXxxx.xxx deems reasonable, permit Distributor to return such
Products and XxXxxx.xxx will grant Distributor a credit equal to the price paid
by Distributor for such returned Products, as adjusted for discounts, returns
and credits actually given and this Agreement shall be deemed terminated with
respect to any such infringing Product. THE FOREGOING STATES DISTRIBUTOR'S SOLE
AND EXCLUSIVE REMEDY WITH RESPECT TO CLAIMS OF INFRINGEMENT OF THIRD PARTY
PROPRIETARY RIGHTS OF ANY KIND.
(b) No Combination Claims. Notwithstanding Section 12(a), XxXxxx.xxx
will not be liable to Distributor for any claim arising from or based upon the
combination, operation or use of any Product with equipment, data or programming
not supplied by XxXxxx.xxx, or arising from any unauthorized modification of the
Products.
(c) Indemnification of XxXxxx.xxx. Distributor will indemnify, hold
harmless and upon XxXxxx.xxx's request, defend XxXxxx.xxx against any claims,
liabilities and expenses (including court costs and reasonable attorneys' fees)
arising from the negligence, misrepresentations, or acts or omissions of
Distributor, its employees or representatives.
13. LIMITATION OF LIABILITY. NEITHER PARTY'S LIABILITY WITH REGARD TO THIS
AGREEMENT OR THE PRODUCTS, IF ANY, WILL INCLUDE CONSEQUENTIAL, INCIDENTAL,
SPECIAL OR OTHER INDIRECT DAMAGES, SUCH AS LOST PROFITS, EVEN IF THE OTHER PARTY
HAS KNOWLEDGE OF THE LIKELIHOOD OF SUCH DAMAGES; SAVE THAT NOTHING IN THIS
CLAUSE SHALL RESTRICT LIABILITY FOR DEATH, PERSONAL PROPERTY DAMAGE, DAMAGE OR
PERSONAL INJURY DIRECTLY CAUSED BY THE NEGLIGENCE OF EITHER PARTY.
Notwithstanding any other provisions of this Agreement, XxXxxx.xxx's aggregate
liability to Distributor under this Agreement shall be limited to a sum equal to
the total payments made by Distributor to XxXxxx.xxx for Products ordered
directly from XxXxxx.xxx in the most recent Term of the Agreement preceding
imposition of such liability.
14. CONFIDENTIALITY. Certain information disclosed by either party, including
any information relating to such party's research, development, proprietary
technology, product and marketing plans, finances, personnel and business
opportunities will be considered confidential information. Each party will not
use the other party's confidential information except as required to achieve the
objectives of this Agreement and will not disclose such confidential information
except to employees, representatives and contractors who have a need to know in
the discharge of their duties under this Agreement. Such restrictions will not
apply to information that (i) becomes public knowledge other than through the
disclosing party; (ii) is already known by the
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disclosing party prior to disclosure by the disclosing party; (iii) is received
from a third party without similar restriction and without breach of this
Agreement. Disclosure of information is not prohibited if prior notice is given
to XxXxxx.xxx and such disclosure is: (a) compelled pursuant to a legal
proceeding or (b) otherwise required by law. Distributor will make no disclosure
or statement regarding the terms of this Agreement without first obtaining
XxXxxx.xxx's prior written consent.
15. PROPRIETARY RIGHTS. XxXxxx.xxx and its licensors retain ownership of all
intellectual property rights in the Products and Work Product as provided in
Section 4(j) hereof. Distributor will report any violations of any OEM agreement
or of the End User License Agreement and any claims of Product Errors that comes
to its attention. Distributor will not reverse engineer, modify or otherwise
change any of the software contained in the Products or its form. Distributor
will not remove, alter or obscure any copyright or other proprietary rights
notices contained on the Products. Distributor will not apply any other
trademarks, logos or notices to the Products. Distributor may use trademarks and
logos as provided by XxXxxx.xxx and/or NAI's only in connection with the
marketing and resale of the Products. Distributor's use of trademarks and logos
must be in accordance with NAI's and/or XxXxxx.xxx's policies and must meet
XxXxxx.xxx's quality standards.
16. RELATIONSHIP OF THE PARTIES. The parties are independent contractors and
this Agreement does not create any partnership, joint venture, or relationship
of employer and employee between XxXxxx.xxx and Distributor. Both XxXxxx.xxx and
Distributor acknowledge that neither party may obligate the other to any
warranty, agreement, or other obligation.
17. FORCE MAJEURE. Neither party shall be liable hereunder by reason of failure
or delay in the performance of its obligations hereunder (except for the payment
of money) on account of strikes, shortages, riots, insurrection, fires, flood,
storm, explosions, acts of God, war, governmental action, labor conditions,
earthquakes, or any other cause which is beyond the reasonable control of such
party.
18. EQUITABLE RELIEF. Each party acknowledges that any breach of its obligations
under this Agreement with respect to the proprietary rights or confidential
information of the other party will cause the other party irreparable injury for
which there are inadequate remedies at law, and therefore such other party will
be entitled to equitable relief in addition to all other remedies provided by
this Agreement or available at law.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.
20. ASSIGNMENT. Neither party shall have the right to assign or otherwise
transfer this Agreement or any rights herein granted to any other person or
entity, except with the prior written consent of the other party, provided that
XxXxxx.xxx may assign all (but not less than all) of its rights and obligations
under this Agreement to XxXxxx.xxx Japan. Any attempted assignment in violation
of this Agreement shall be void.
20. GENERAL. This Agreement, including all Attachments hereto, constitutes the
entire agreement between the parties with respect to the subject matter hereof,
and supersedes and replaces all prior or contemporaneous understandings or
agreements, written or oral, regarding the subject matter. This Agreement may
not be changed, terminated or amended except in writing. The provisions of any
order for Products provided by Distributor will not apply unless expressly
included in XxXxxx.xxx's written acceptance of the order. XxXxxx.xxx's failure
or delay in exercising any of its rights will not constitute a waiver of such
rights unless expressly waived in writing. This Agreement will be governed and
interpreted according to the laws of California, excluding its conflict of laws
rules. Any suit hereunder may be brought in the federal or state courts in the
County of Santa Clara, California, and Distributor hereby submits to the
personal jurisdiction thereof. The parties acknowledge that the United Nations
Convention on Contracts for the International Sales of Goods (1980) is
specifically excluded from application to this Agreement. If a court of law
finds any provision of this Agreement unenforceable, the parties agree to
replace the offending provision with an enforceable provision that most nearly
achieves the intent and economic effect of the unenforceable provision. Any
notice provided hereunder must be in writing and will be deemed given upon the
earlier of actual receipt or ten (10) days after being sent by first class mail,
return receipt requested, to the appropriate address set forth above, as such
address may be changed by written notice to the other party.
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EXHIBIT B
B1. LICENSE FEES PAYABLE BY DISTRIBUTOR TO XXXXXX.XXX
(a) Distributor shall pay as License Fees to XxXxxx.xxx fifty percent
(50%) of Distributor's net invoice sales revenue (net of returns and rebates,
and excluding consumption or similar taxes) received in a given calendar quarter
from all sales made pursuant to this Agreement in any order, contract,
transaction or arrangement that includes the Products.
(b) During the calendar year 2000 only, in no event shall the License
Fees paid to XxXxxx.xxx by Distributor pursuant to this Agreement be less than
US$125,000 (or Yen equivalent) per calendar quarter.
B2. LICENSE FEES PAYABLE BY XXXXXX.XXX TO DISTRIBUTOR
XxXxxx.xxx shall pay to Distributor as License Fees ten percent (10%) of
net sales revenue received from PC Clinic Subscriptions directly generated from
end users of OEM Products (net of revenue sharing with OEMs, returns and
rebates, and excluding consumption or similar taxes). Such License Fees shall be
payable for the calendar quarter in which XxXxxx.xxx receives the Subscription
payment.
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EXHIBIT C
OEM AGREEMENTS OF DISTRIBUTOR
COMPANY AGREEMENT TITLE START DATE PRODUCT
------- --------------- ---------- -------
Toshiba Corporation Software License Agreement 01-May-99 VirusScan
EPSON HANBAI Co., Ltd. McAfee OEM License Agreement 01-Oct-99 VirusScan
Sharp Corporation OEM License Agreement 01-Feb-99 VirusScan
NEC Corporation OEM License Agreement 01-Oct-99 VirusScan
Hitachi, Ltd. OEM License Agreement 30-Mar-99 VirusScan
Fujitsu, Ltd License Agreement 07-Sep-99 VirusScan
Sony Corporation OEM Software License Agreement 13-May-99 VirusScan for
Win95/98(J,E,G,F)
Matsushita Electric
Industrial Co., Ltd. OEM License Agreement Target: by the VirusScan
end of May '00
By May 15, 2000, Distributor shall provide XxXxxx.xxx with an English summary of
the key business terms (royalty amount and payment terms, term of contract,
product, upgrade rights of end users, and term of End User License Agreement)
for each of the above OEM agreements.
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EXHIBIT D
INTERNET SUB-DISTRIBUTION AGREEMENTS OF DISTRIBUTOR EXISTING AS OF THE EFFECTIVE
DATE
COMPANY AGREEMENT TITLE START DATE
------- --------------- ----------
NEC Corporation Software Distribution Agreement (Site:NEC BIGLOBE) 1999/7/15
Hitachi,Ltd Online Distribution Addendum (to Special Distribution 1999/12/16
Agreement) (Site: Hitachi FloraCity)
Mitsubishi Corporation Online Distribution Agreement (Site: b-store) 2000/2/1
NextBusiness Systems Online Distribution Agreement(Site: Onkyo) 1999/10/28
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EXHIBIT E
MINIMUM PERFORMANCE TARGETS FOR RENEWAL AND/OR MAINTENANCE OF EXCLUSIVITY:
1/1/2000 to 12/31/2000:
(c) $500,000 in License Fees
1/1/2001 to 12/31/2003:
In each year 5 million units of any Product (VirusScan and/or PC Clinic)
distributed to OEMs.
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