Manufacturer's Representative Agreement - Marketlink Technologies LLC and CyberGuard Corp.
MANUFACTURER'S REPRESENTATIVE AGREEMENT
BETWEEN
MARKETLINK TECHNOLOGIES, LLC
AND
CYBERGUARD CORPORATION
This AGREEMENT ("Agreement") is made by and between Marketlink
Technologies, LLC (hereinafter referred to as "Marketlink"), with its principal
office located at: 24404 Catherine Road, Suite 300, Novi, MI 48375, and
CyberGuard Corporation (hereinafter referred to as "Company" or "CyberGuard"),
with its principal office located at 2000 W. Commercial Blvd, Ste 200, Fort
Lauderdale, FL 33309.
WHEREAS, Company desires to retain Marketlink, and Marketlink desires
to be retained as the sales representative firm for the Products in the
Territory identified below except for House Accounts, all on the terms and
conditions set forth in this Agreement,
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto intending to be legally bound, agree as
follows:
1. DEFINITIONS
A. "Products" shall mean the products manufactured and/or distributed by
Company as indicated on Exhibit A of this Agreement.
B. "Territory" shall mean those geographical areas set forth in Exhibit B
of this Agreement.
C. "Customer" shall mean any Reseller, VAR, System Integrator, Distributor
or End User of Company's Products in the Territory, with the exception
of "House Accounts" (defined below).
D. "House Accounts" shall mean those Company's customers and those
customers' end users and Resellers in the Territory for which sales (i)
are non-commissionable to Marketlink and (ii) do not qualify toward
Marketlink's revenue commitments herein. Customers designated by
Company as House Accounts are listed in Exhibit F of this Agreement and
may be added to or modified from time to time in writing by Company at
its sole discretion. In the event that a Customer of Company's Products
is designated by the Company as a "House Account" after the effective
date of this Agreement, commissions for Product sales, if any, to that
Customer are payable to Marketlink for six (6) months following the
"House Account" designation. In the event that the newly added customer
to the House Account list is an affiliate of a previously herein
identified customer of either party, both parties agree to work towards
a resolution of the applicable commission payments, if any.
E. "Net Invoice Price" shall mean the total price at which an order is
invoiced to the Customer by the Company prior to any discount offered
by Company in compensation
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for early payment. Excluded from the Net Invoice Price are shipping and
mailing costs, duties, taxes, and insurance, and related adjustments
granted to the Customer by Company as shown on the face of the
Company's invoice.
F. "Reseller" means a reseller, VAR, system integrator, or distributor of
the Company's Products in the Territory, with the exception "House
Accounts".
2. APPOINTMENT AND AUTHORITY OF MARKETLINK
A. Subject to the terms and conditions of this Agreement, Company appoints
Marketlink as the exclusive sales representative firm for the Products
in the Territory except for House Accounts, and Marketlink accepts the
appointment and agrees to represent and promote the sale of the
Products. Notwithstanding anything to the contrary in this Agreement,
in no event shall this Agreement or any term herein be interpreted or
construed that Marketlink is a reseller or a distributor of the
Products. Products can be sold in connection with this Agreement only
by the Resellers or directly by the Company. Except as expressly set
forth herein, no other rights or licenses are granted to Marketlink
hereunder.
B. Marketlink shall neither advertise the Products outside the Territory
nor solicit orders from outside the Territory without the prior written
consent of Company.
C. The relationship of Company and Marketlink established by this
Agreement is that of independent contractors, and nothing contained in
this Agreement shall be construed to (i) give either party the power to
direct and control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint ventures, co-owners or
otherwise as participant in a joint undertaking, or (iii) allow
Marketlink to create or assume any obligation on behalf of Company for
any purpose whatsoever. All financial and other obligations associated
with Marketlink's business are the sole responsibility of Marketlink.
3. COMPENSATION
A. Subject to the terms and conditions of this Agreement and as full
payment for any and all services rendered by Marketlink and in
consideration of the effort of Marketlink and all of the expenses
incurred by Marketlink hereunder, Company agrees to pay to Marketlink,
and Marketlink agrees to accept, commissions on sales of the Products
to Customers in the Territory as set forth in Exhibit C and this
Section 3.
B. The commission shall apply to all Product orders, with the exceptions
as specified in Exhibit C, from all Customers in the Territory that
have been accepted by Company and which shipments have occurred during
the term of this Agreement, whether or not such orders were solicited
by Marketlink.
C. In no case will any compensation paid to Company employees be deducted
from commissions due Marketlink.
D. Commissions will be paid on or before the 30th day of the month
following the month in which the Product was invoiced by the Company.
Commissions not paid within the agreed payment terms will be subject to
finance charges at Annual Interest Rate: 10% or 0.83% per month on
balance due.
E. Company shall have the absolute, unconditional right to chargeback
Marketlink for the commissions paid or credited to Marketlink on all
shipments (a) not paid by a Customer over ninety (90) days past the
invoice date, provided Company re-credits Marketlink for the
appropriate commission applied to actual partial or full payments, less
fees incurred in the process of collecting the payments, subsequently
received by CyberGuard from the Customer, and/or (b) returned by
Customer to Company for credit.
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F. PAYMENT: Payment of commissions shall be in United States dollars.
Marketlink shall be responsible for paying all applicable taxes on such
commissions.
G. MONTHLY STATEMENTS: Company shall submit to Marketlink monthly
statements of the commissions due and payable to Marketlink under the
terms of this Agreement, with reference to the specific Customers on
which the commissions are being paid. Provided that it is at no cost to
the Company, Company will submit or cause Company's authorized
"two-tier distributors" (warehousing entity, such as Techdata Corp. or
Ingram) to submit, at No Charge to Marketlink, an electronic report
including all sales made in the previous month by named Customer bill
to, including separate ship to locations and zip codes.
H. In the event that: (a) a dispute arises between Marketlink, on one
hand, and the Reseller and/or end user, on the other hand, as
determined by the Company in its sole reasonable discretion; then that
Reseller's end users and/or that end user, as applicable, will become
Company's House Accounts hereunder and, notwithstanding anything to the
contrary herein, no commissions for sales to those end users will be
payable to Marketlink effective from the date those end users become
House Accounts.
4. SALE OF THE PRODUCTS
A. All sales by the Resellers shall be on terms established by Company and
the respective Reseller, and Company shall have the right to establish,
change, alter, or amend terms and conditions of sale in its sole
discretion and as otherwise set forth in the Reseller Agreement between
the Company and the Reseller.
B. Marketlink shall not accept orders in Company's name, make price
quotations or delivery promises without Company's prior written
approval. All orders obtained by Marketlink directly shall be submitted
to the Company and shall be subject to acceptance by Company at its
principal office currently located at the address listed for Company at
the beginning of this Agreement, and all quotations by Marketlink shall
contain a statement to that effect. Marketlink shall have no authority
to make any acceptance/delivery commitments to any Customers.
C. Company shall have the sole right of credit approval or credit refusal
for Customers in all cases.
D. Company shall render all invoices directly to the Customers. Invoice
payments shall be made directly to Company by Customers.
E. It is expressly understood by Marketlink that full responsibility for
all collection rests with Company.
F. Whenever Marketlink, at Company's request, takes possession of
Company's Products for the purpose of assisting the Company in
delivering such Products to Customers, the risk of loss or damage to or
destruction of such Products shall be borne by Company with the
exception of events of Marketlink's damage, destruction or loss of the
Products, in which case it shall be borne by Marketlink.
G. Notwithstanding anything to the contrary, any and all references in
this Agreement to the "sale" of the Products shall have the meaning of
a "sublicense" of the software portion of the Products and a sale of
the hardware portion of the Products, as applicable. All "sales" are
subject to the Company's standard terms and conditions.
5. PRODUCT WARRANTY AND PRODUCT AVAILABILITY
A. Any warranty for the Products shall run directly from Company to the
Customer, and pursuant to the warranty the Customer shall return any
allegedly defective Products to
<PAGE> 4
Company or designated depot. Marketlink shall have no authority or
responsibility to accept any returned Products.
B. Except for the Limited Warranty set forth in the applicable Company
License Agreements, Marketlink shall not provide nor imply any
additional Product warranties without the express written consent of
Company's corporate officer.
C. Except for the Limited Warranty set forth in the applicable Company
License Agreements, Company makes no warranty or representation to
Marketlink or the Customers in connection with the Products or any
subject matter contained herein, and expressly disclaims any and all
express and/or implied warranties and representations, including
without limitation any express and/or implied warranties of
merchantability or fitness for a particular use or purpose or
non-infringement with respect to any and all Products.
6. MARKETLINK'S RELATIONSHIP AND CONDUCT OF BUSINESS
A. Marketlink shall maintain sales offices in the Territory and shall
represent and promote the sale of Company's Products within the
Territory, except for House Accounts, in order to achieve the revenue
commitment herein.
B. Marketlink will conduct all of its business in its own name. Marketlink
will pay all expenses of its office and activities and be responsible
for the acts and expenses of its employees, subcontractors and
representatives.
C. Marketlink shall not, without Company's prior written approval, alter,
enlarge, or limit orders, make representations, warranties or
guarantees concerning Company's Products or accept the return of, or
make any allowance for such Products.
D. Marketlink shall comply with all terms and conditions set forth in
Exhibit D.
E. Company shall comply with all terms and conditions set forth in Exhibit
E.
7. USE OF TRADEMARKS AND TRADENAMES
Marketlink recognizes and concedes for all purposes that all trademarks, trade
names, logos or identifying slogans affixed to Company's Products or any
accompanying labels, containers, and cartons, whether or not registered
("Trademarks"), constitute the exclusive property of Company and cannot be used
by Marketlink except only in connection with promoting the sale of Company
Products hereunder and only with the Company's prior written approval. During
the term of this Agreement, Marketlink is authorized by Company to use Company's
Trademarks in connection with Marketlink's promotion of Company Products,
provided that Marketlink's use of such Trademarks shall be in accordance with
Company's policies from time to time communicated to Marketlink and with
Company's prior written approval. Marketlink shall have no interest in such
Trademarks by virtue of this Agreement except as herein expressly provided, and
Marketlink's use of such Trademarks shall cease immediately upon termination or
expiration of this Agreement. Company reserves the right to change Company
Trademarks without notice. Marketlink shall not change or remove any Company
Trademarks or third-party trademarks or other proprietary notices on or
contained within the Products.
8. INDEMNIFICATIONS
A. Company shall be solely responsible for and agrees to defend or settle
(at its option) and hold Marketlink harmless against and to pay all
losses, costs, damages and expenses whatsoever, including reasonable
attorney fees, which Marketlink may sustain or incur on account of a
third-party's action instituted against Marketlink, based on (a)
infringement or alleged infringement of U.S. patents, or the
Trademarks, resulting from
<PAGE> 5
Marketlink's distribution of the CyberGuard-developed products or use
of the Trademarks as authorized hereunder, or (b) warranty claims or
product liability claims arising out of the CyberGuard-developed
products; provided that the above indemnity shall not apply if the
infringement is caused by the combination, operation or use of the
CyberGuard-developed products with any product not developed by
CyberGuard if such claim would have been avoided but for such
combination, operation or use, and provided further that Marketlink
will promptly deliver to Company any notices or papers served upon it
in any proceeding covered by this indemnity, and Company will defend
same at its expense. Marketlink shall, however, have the right to
participate in the defense at its own expense.
B. Marketlink shall be solely responsible for, and shall indemnify and
hold Company free and harmless from, any and all claims, damages or
lawsuits (including Company's attorney's fees) arising out of (a) the
acts or omissions to act of Marketlink, its employees or its agents;
(b) any misrepresentation, breach or non-fulfillment of any of the
covenants or agreements of Marketlink in this Agreement; (c) any
liability, obligation, or commitment relating to the operation of
Marketlink's business arising out of transactions contemplated
hereunder; (d) any violation of U.S. law including but not limited to
laws and regulations referred to in Section 12 and violation of Section
15; or (e) any claim of patent, copyright or trademark infringement
arising from or relating to the combination of the Products with any
other product or service provided by Marketlink to the Customers.
Company will promptly deliver to Marketlink any papers served upon it
in any proceeding covered by this indemnity, and Marketlink will defend
same at its expense. Company shall, however, have the right to
participate in the defense at its own expense.
9. TERM OF AGREEMENT AND TERMINATION
A. This Agreement shall be effective on the day of July 1st, 2001, and
shall continue until June 30th, 2004. This Agreement shall
automatically be renewed from year to year thereafter unless terminated
by either party upon ninety (90) days written notice of its intent not
to renew to the other by registered or certified mail prior to the end
of the initial term of this Agreement, or any renewal term.
B. Termination for Cause or Convenience: This Agreement may not be
terminated for convenience in the first six months by either party.
After the initial six months, this Agreement may be terminated by
either party for any reason at any time by giving the other party
written notice ninety (90) days in advance. Either party may
immediately terminate this Agreement for cause by providing written
notice to the other party if the other party (a) has breached any of
the material covenants and agreements contained herein, including
without limitation, Marketlink's failure to achieve Marketlink's
minimum revenue commitment on quarterly basis or violation of the terms
and conditions of Sections 12 or 15, or Exhibit D (except that
violation of sections 1,2,7, or 8 of Exhibit D shall not constitute a
material breach hereunder), or the Company's violation of the terms and
conditions of Section 12 or 15 or Exhibit E (except that violation of
sections 3 or 5 of Exhibit E shall not constitute a material breach
hereunder) and (b) has not cured that breach (if the breach is curable)
within 5 days after the written notice to the defaulting party.
C. Termination for Insolvency: This Agreement shall terminate, without
notice, (a) upon the institution by or against either party for
insolvency, receivership or bankruptcy proceedings, (b) upon Marketlink
making an assignment for the benefit of creditors, or (c) upon
Marketlink dissolution.
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10. RIGHTS UPON TERMINATION
Upon termination of this Agreement for any reason:
A. CyberGuard shall pay to Marketlink commissions on all Product orders
(other than House Accounts) shipped or to be shipped into Marketlink's
Territory, which orders are accepted by the Company prior to the
effective date of termination of this Agreement, all in accordance with
the terms and conditions of this Agreement.
B. No additional compensation of any kind shall be paid to Marketlink as
of the effective date of termination of this Agreement, except that:
(1) in the event this Agreement is terminated within the
first 6 months from the effective date hereof, then
CyberGuard will pay Marketlink the pro-rated amount
of the Base Compensation that was due and earned
through the date of termination but remained unpaid
as of the termination date, and
(2) in the event CyberGuard terminates this Agreement for
cause due to Marketlink's failure to achieve the
minimum revenue commitments for the first quarter or
for the second quarter of this Agreement as set forth
in section 14 of Exhibit D hereof, then the "Special
Option" as described in section 4 of Exhibit C hereof
shall fully vest upon CyberGuard's receiving
Marketlink's complete Reseller database for
CyberGuard's use at CyberGuard's sole discretion.
C. Marketlink shall immediately cease all promotion of the Products and
representing itself as the sales representative firm for the Company's
Products.
D. Each party shall immediately destroy or return to the other party any
and all of the other party's Confidential Information and marketing
material in its possession or control. Upon either party's request, a
duly authorized corporate officer of the other party shall certify in
writing that such return or destruction has occurred.
E. Except for damages for a material breach of this Agreement, neither
party shall be liable to the other for damages of any kind, including
without limitation any consequential or incidental damages, on account
of the termination or expiration of this Agreement, and each party
waives any right it may have to receive any compensation or reparations
on termination or expiration of this Agreement other than as expressly
provided herein.
11. INTELLECTUAL PROPERTY RIGHTS
A. Company retains sole and exclusive ownership of all worldwide
copyrights, patents, trade secrets, know-how and other proprietary and
intellectual property rights in and to the Products, including the
Software, upgrades, Trademarks and documentation, and all designs,
engineering details, schematics, drawings, and other similar data
pertaining to them, as they exist now or in the future.
B. The third parties providing and/or licensing to the Company the
non-proprietary to Company portion of the Products retain sole and
exclusive ownership of all worldwide copyrights, patents, trade
secrets, know-how and other intellectual property rights in and to
their respective products as they exist now or in the future.
12. COMPLIANCE WITH LAWS
A. Each party will comply with all applicable laws and regulations and
ordinances in their performance under this Agreement.
B. Marketlink agrees to comply with all export laws and regulations,
including, but not limited to, the regulations of the U.S. government
relating to the export of commodities
<PAGE> 7
and technical data insofar as they relate to the activities under this
Agreement. Each party hereby gives its written assurance that neither
the Products nor any technical data provided by the other party under
this Agreement, is intended to be shipped, directly or indirectly, to
the prohibited countries identified by the U.S. government or
proscribed end users or for proscribed uses as defined in the U.S.
Export Administration Regulations.
13. PUBLICITY
A. Both parties hereto will jointly issue a press release on or about the
effective date of this Agreement.
B. Marketlink shall submit to Company for approval any and all public
announcements, advertising and sales literature of Marketlink which
refers to the Company and/or includes any Company trademarks.
14. LIMITATION OF LIABILITY
A. NOTWITHSTANDING ANYTHING TO THE CONTRARY, IN NO EVENT SHALL COMPANY OR
ANY PERSON OR ENTITY THAT HAS BEEN INVOLVED IN THE CREATION OR
PRODUCTION OF THE PRODUCTS BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF
PROFITS, LOSS OF DATA OR LOSS OF GOODWILL, REGARDLESS OF THE FORM OF
ACTION, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE
FURNISHING OF, PERFORMANCE OR USE OF ANY PRODUCTS, OR ANY PORTION OF
THE PRODUCTS, AND ANY OTHER MATERIAL AND/OR SERVICES PROVIDED FOR, OR
PERFORMED IN CONNECTION WITH, THIS AGREEMENT OR MARKETLINK'S FAILURE TO
PERFORM ITS OBLIGATIONS TO THIRD PARTIES, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
B. Company's entire liability for any action, claim or cause of action
whatsoever, including without limitation, breach of contract, tort,
negligence or any other legal theory, shall not exceed the amount
actually received by the Company for the specific Product giving rise
to such action, claim or cause of action. The limitations of liability
set herein shall not apply to any damages for personal injury or damage
to real or tangible personal property.
15. CONFIDENTIALITY
A. Confidential Information of the other party may only be used if
necessary in the fulfillment of obligations of the parties hereunder.
Confidential Information of a party hereto shall not be used in any way
which is directly or indirectly detrimental to the other party or its
business.
B. The Confidential Information shall be kept confidential by each party
except that each party may disclose the Confidential Information or
portions thereof to those of its directors, officers, employees,
contractors, agents and representatives (collectively,
"Representatives") who (i) absolutely need to know such Confidential
Information and (ii) have previously agreed in writing to be bound by
the terms and conditions as protective of the Confidential Information
as those in this Agreement. Each party hereto agrees to be responsible
for any breach of this Agreement by its Representatives. Each party
shall also use the same degree of care to avoid disclosure of such
Confidential Information as such party employs with respect to its own
Confidential Information of like importance, but in no event less than
reasonable care. Each party shall hold in confidence, and shall take
all reasonable measures
<PAGE> 8
to prevent disclosure of the Confidential Information by its
Representatives, and not disclose, to any third party for any reason or
purpose whatsoever any materials which contain Confidential Information
(regardless of who prepared such materials), and whether oral or in
writing or other medium, or copies thereof, and whether acquired from
the other party or acquired through inspection of the other party's
property.
C. Marketlink agrees not to trade in the securities on the basis of the
Confidential Information which it receives from CyberGuard under this
Agreement. Marketlink acknowledges that a violation of this Section 15
may constitute a violation of the securities laws and regulations by
Marketlink.
D. Each of the parties hereto acknowledges that irreparable harm, for
which there would be no adequate remedy at law, would arise from a
violation of this Agreement, which would give rise to a right to an
injunction in favor of the non-breaching party. Notwithstanding the
foregoing, the parties are entitled to pursue any appropriate remedies
at law or in equity for breach of this Agreement.
E. With respect to the Confidential Information, neither party shall (nor
shall any Representative of a party) create, produce or develop in any
manner, nor shall a party copy, photograph or reproduce in any manner,
in whole or in part, the Confidential Information of such other party,
without the prior written consent of the other party.
F. "Confidential Information" includes, but shall not be limited to, the
Products, trade secrets, policies, procedures, techniques, designs,
drawings, know-how, technical information, specifications, computer
software, intellectual property, information and data relating to the
development, research, testing, manufacturing, costs, marketing and
uses of the products and services developed, manufactured or sold by a
party hereto, each party's budgets and strategic plans, and the
identity and special needs of customers for the products and services
relating to each party's databases, data, all technology relating to
each party's business, systems, methods of operation, customer lists,
customer information, business and financial information, solicitation
leads, marketing and advertising materials, methods and manuals and
forms, all of which pertain to the activities or operations of each
party.
G. Notwithstanding the foregoing, information shall not be deemed
Confidential Information and the receiving party shall have no
obligation with respect to any such information which: (a) is already
known to the receiving party, and such prior knowledge can be
demonstrated through physical evidence that pre-dates the date of
disclosure and such prior knowledge was not gained through a
confidential disclosure; (b) is or becomes publicly known through
publication or otherwise and through no wrongful act of receiving
party; (c) is received from a third party without similar restriction
and without a breach of this Agreement; (d) is furnished to a third
party by the disclosing party without a similar restriction on the
third party's rights; (e) is approved for release by written
authorization of the disclosing party (so long as such release complies
with any requirements of the authorization); or (f) is disclosed
pursuant to the lawfully imposed requirement of a governmental agency
or disclosure is required by operation of law.
H. In the event that either party or any of its Representatives become
legally compelled to disclose any of the Confidential Information of
the other party, it shall provide the other party with prompt prior
written notice so that the other party may seek a protective order or
other appropriate remedy and/or waive compliance with the terms of this
Agreement. In the event that such protective order or other remedy is
not obtained, or that the other party waives compliance with the
provisions hereof, the receiving party agrees to furnish only that
portion of the Confidential Information which, as advised by written
opinion of counsel, is legally required and to exercise its best
efforts to obtain assurance that confidential treatment will be
accorded such Confidential Information including filing any requests
for confidential treatment as may be afforded under any law, rule or
regulation. In any event, neither party nor any of their
Representatives will oppose action by the other party to obtain an
<PAGE> 9
appropriate protective order or other reliable assurance that
confidential treatment be accorded the Confidential Information.
I. Each party understands and acknowledges that the other party is not
making any representation or warranty, express or implied, as to the
accuracy or completeness of the Confidential Information, and the other
party will not have any liability to such party or any other person
resulting from the use by such party of the Confidential Information.
16. NONSOLICITATION
A. During the term of this Agreement and for one (1) year thereafter, each
party, directly or indirectly, will not solicit, hire or contact any
employee of the other party for the purpose of hiring them or causing
them to terminate their employment relationship with the other party.
B. Unless otherwise agreed to in writing by the parties hereto, in the
event that a party hires an employee of the other party, the hiring
party will pay a fee to the other party equal to thirty (30%) of the
new hire's first year base salary, commission and bonus, payable
monthly, beginning with the second month of the new hire's hire date
with the hiring party. No other compensation or costs shall be paid by
the hiring party to the other party.
17. GENERAL
A. This Agreement, together with the attached exhibits, constitutes the
entire agreement of the parties and shall supersede any other prior
oral or written agreements or understandings with respect to the
subject matter hereof; and shall be binding upon and inure to the
benefit of the parties' successors and assigns. Except for Exhibit A
and Exhibit F, this Agreement may not be modified in any way without
the written consent of both parties.
B. Marketlink shall not have the right to assign this Agreement in whole
or in part without Company's written consent. The Company may assign
this Agreement or any right, obligation or interest herein to any
assignee, transferee, "spin off" or successor in interest of
substantially all of the assets of Company.
C. This Agreement shall be interpreted according to the laws of the State
of Delaware, without regard to the choice of law considerations.
D. In the event that a dispute arises between the parties pertaining to
any matters related to this Agreement, the following procedure shall
apply and the parties shall make all best efforts to resolve the
dispute in good faith as quickly as possible: (i) In the event of any
such dispute, the matter shall be immediately referred to the
respective Chief Financial Officer of each party; (ii) In the event
that those Chief Financial Officers cannot resolve such dispute within
30 days, the matter shall be submitted to the respective Chief
Executive Officer of each party; (iii) In the event that the respective
Chief Executive Officers cannot resolve such dispute within 10 days,
then either party may pursue any other remedy available under law or in
equity.
E. If any portion of this Agreement shall be finally determined by a court
of competent jurisdiction to be invalid or unenforceable, such portion
shall be enforced to the maximum extent permitted by law and the
remainder of this Agreement shall continue in full force and effect.
F. All notices hereunder shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by overnight courier or
similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, to the
address as set forth on the first page of this Agreement, or to such
other address as designated from time to time.
<PAGE> 10
G. Section headings herein have been inserted for reference only and shall
not be deemed to limit or otherwise affect, in any matter, or be deemed
to interpret in whole or in part any of the terms or provisions of this
Agreement.
H. Company shall be excused from any delay in performance or for
non-performance of any of its obligations hereunder caused by any
circumstances beyond its control, including without limitation, any Act
of God, fire, flood, government laws regulations (including inability
to export Product due to U.S. government's denial or withdrawal of
approval to export), orders or similar requests, accident, labor
dispute, unavoidable breakdown, the failure of any applicable
telecommunications network, war, civil unrest or disruption to the
extent that any such circumstances affect Company's ability to perform
its obligations under this Agreement.
I. Any waiver by any party hereto of any condition, or breach of any
provision, term, covenant, representation or warranty contained in this
Agreement shall not be deemed or construed as a waiver of any condition
or of the breach of any other provision, term, covenant, representation
of this Agreement.
CyberGuard Corporation Marketlink Technologies, LLC
By By
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Title Title
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Date Date
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EXHIBIT A
PRODUCTS
The term "Products" as used in this Agreement shall mean the following:
All products and services available for sale in the Territory (but
specifically excluding Product maintenance renewals and Product support
renewals) as listed in the Company's Price List attached hereto. The Price
List may be updated by the Company at any time.
<PAGE> 12
EXHIBIT B
TERRITORY
The United States
<PAGE> 13
EXHIBIT C
COMPENSATION
1. Commissions: Marketlink shall receive a commission of 5% of
the Net Invoice Price of all Product sales (excluding Product
maintenance renewals and Product support renewals) shipped during the
term of the Agreement in the Territory except for any and all sales to
House Accounts. Notwithstanding the foregoing, Marketlink shall receive
a commission of 2% of the Net Invoice Price of all sales of the
Company's FS Lite product (excluding FS Lite maintenance renewals and
FS Lite support renewals) shipped during the term of the Agreement in
the Territory except for any and all sales to House Accounts.
2. Base Compensation: For months 1 through 6 from the effective
date of the Agreement (provided this Agreement is not terminated
earlier), Company agrees to pay to Marketlink $75,000 per month base
compensation for Marketlink's management of the field and telesales
effort, 40 field sales, 10 telesales personnel calling on potential
Customers for CyberGuard in the Territory, to be paid monthly,
beginning on the 15th day from the effective date hereof.
3. Draw: For months 7 through 12 from the effective date of the
Agreement (provided this Agreement is not terminated earlier), Base
Compensation will convert to a draw (recoverable by CyberGuard) against
same quarters commissions earned by Marketlink hereunder.
4. Stock Options: Subject to CyberGuard's Board of Directors'
approval and CyberGuard's stock option plan and CyberGuard stock option
agreement terms and conditions, CyberGuard will issue to Marketlink
options to purchase CyberGuard Common Stock as follows:
(a) Option to purchase, in the aggregate, 33,000 shares
of CyberGuard Common Stock at the price per share equal to the
closing price of the CyberGuard Common Stock on the effective
date of this Agreement; with vesting only after the first 50
Resellers identified by Marketlink: (i) sign CyberGuard's
Reseller Agreement, (ii) purchase demo equipment, and (iii)
complete initial training.
(b) Option to purchase, in the aggregate, 300,000 shares
of CyberGuard Common Stock; with vesting in 20,000 shares
increments upon Marketlink's achieving each $5 million in
revenue to CyberGuard, with the below 3-year revenue
commitments, at the prices per share equal to the closing
price of the CyberGuard Common Stock on the effective date of
this Agreement:
Year Revenue
1. $11M
2. $20.5M
3. $42M
(c) Option to purchase, in the aggregate, 17,000 shares
of CyberGuard Common Stock at the price per share equal to the
closing price of the CyberGuard Common Stock on the effective
date of this Agreement, with vesting only upon Marketlink
achieving the first year revenue commitment of $11 million
within the first year from the effective date of the
Agreement.
<PAGE> 14
(d) Option to purchase, in the aggregate, 150,000 shares
of CyberGuard Common Stock at the price per share equal to the
closing price of the CyberGuard Common Stock on the effective
date of this Agreement, with vesting as follows:
(1) During the first year of this Agreement, a
maximum of 72,666 shares can vest, in the
following increments:
a. 1,000 shares shall vest each time
an individual sales employee of
Marketlink achieves $50,000 in
revenue to CyberGuard hereunder
during the first quarter of this
Agreement;
b. 1,000 shares shall vest each time
an individual sales employee of
Marketlink achieves $75,000 in
revenue to CyberGuard hereunder
during the second quarter of this
Agreement;
c. 1,000 shares shall vest each time
an individual sales employee of
Marketlink achieves $150,000 in
revenue to CyberGuard hereunder
during the third quarter of this
Agreement;
d. 1,000 shares shall vest each time
an individual sales employee of
Marketlink achieves $250,000 in
revenue to CyberGuard hereunder
during the fourth quarter of this
Agreement.
(2) During the second year of this Agreement, a
maximum of 40,000 shares can vest, in
increments as follows: 500 shares shall vest
each time an individual sales employee of
Marketlink achieves $250,000 in revenue to
CyberGuard hereunder during the second year
of this Agreement.
(3) During the third year of this Agreement, a
maximum of 20,000 shares can vest, with the
vesting schedule to be determined by
CyberGuard and Marketlink at the appropriate
time.
(4) The remaining 17,334 shares of this option
will be reserved for vesting upon special
promotions, with mutual agreement of both
parties hereto, which promotions will
specifically include the vesting of 2,000
shares for the top performer for each
quarter of the first year of this Agreement.
Marketlink hereby represents and agrees to
exercise and promptly distribute the proceeds of the
respective vested options directly to the respective
individual sales employee of Marketlink that earned
the vested shares.
Marketlink further agrees (i) to identify by
name the individual sales employees and their
respective revenue amounts in order to allow
CyberGuard to review and determine whether any shares
should become vested under this option, and (ii) to
notify CyberGuard in the event, in accordance with
Marketlink's records, any of the individuals achieves
the revenue amounts within the specified time-frame,
which would trigger vesting as described above.
CyberGuard reserves the right to audit Marketlink's
books and records in connection with the option
grants.
(e) "Special Option". On the effective date of this
Agreement, CyberGuard agrees to issue to Marketlink an option
to purchase, in the aggregate, 100,000 shares of CyberGuard
Common Stock at the price per share equal to the closing price
of CyberGuard Common Stock as of the effective date of this
Agreement, which option shall vest only if: (1) CyberGuard
terminates this Agreement for cause due to Marketlink's
failure to achieve the minimum revenue commitments for the
first quarter or for the second quarter of this Agreement as
set forth in section 14 of Exhibit D of this Agreement, and
(2) CyberGuard receives Marketlink's complete Reseller
database for CyberGuard's use at CyberGuard's sole discretion.
<PAGE> 15
(f) The above-listed options will expire in 5-years from
the date of their respective issuance unless otherwise
terminated earlier.
(g) Effective on the date of termination of this
Agreement, the above-listed options shall terminate, but
Marketlink's right to exercise the vested shares under each
above-listed option shall survive for ninety (90) days from
the termination date of this Agreement.
(h) Company and Marketlink agree to work together to
prepare and enter into stock option agreements for the
above-described options within a reasonable time after the
effective date of this Agreement.
<PAGE> 16
EXHIBIT D
Requirements Of Marketlink
During the term of this Agreement, Marketlink will:
1. Provide 40 trained outside sales personnel to call on
Resellers for CyberGuard Corporation.
2. Provide 10 inside sales personnel supporting leads/inbound
calls for CyberGuard Corporation.
3. Provide Marketlink VAR database of customers for pursuit and
introduction of the Products.
4. Provide Personnel and equipment for any Marketlink-proposed
regional tradeshow that CyberGuard Corporation participates.
5. Provide Reseller trainings - after initial trainings,
Marketlink will sales train all Resellers within its channel.
6. Provide Regional offices to be used as training facilities by
CyberGuard Corporation for Marketlink Reseller trainings.
7. Identify Resellers and cause the signing of CyberGuard's
Reseller Agreement between CyberGuard and each of the new
Resellers approved by CyberGuard in the appropriate amount to
drive the agreed upon sales commitments. Any termination of
this Agreement will not affect the Reseller Agreements between
CyberGuard and respective Resellers. Resellers will be signed
with the intent of developing a non-overlapping,
geographically diverse reseller base.
8. Appropriately divide the Resellers within the Territory to
incentivize the Resellers and avoid commoditizing of the
Products.
9. Provide pipeline and unit forecast data to CyberGuard twice
per month.
10. Attend CyberGuard weekly sales management call for first 6
months of the Agreement and reconsider frequency at that
point.
11. Commit to investigate the establishment of "Marketlink"
security services product using CyberGuard professional
services team, and make a go/no go decision in 45 days from
the effective date of the Agreement.
12. Not market, promote for sale, represent in sale in any way,
sell, or distribute products competitive to the Products
(including without limitation, Firewall Software, Firewall
Appliance, VPN); provided that, specifically, the OpenReach
VPN product marketed by Marketlink shall not be considered
competitive to the Products for the purposes of this
Agreement.
13. Marketlink agrees to allow CyberGuard to train all
Marketlink's sales personnel in a customized 1 1/2 day
training course at Marketlink's 8 office locations in a
maximum of 30 days from the effective date of this Agreement.
Marketlink also agrees and commits to have at least 30
Marketlink's sales personnel pass the Company's CSS training
program testing criteria in that time.
<PAGE> 17
14. Achieve quarterly revenue commitment in the first year as follows:
a. July 1st - Sept. 30th, 2001 $ 300,000
b. Oct. 1st - Dec. 31st, 2001 $ 1,500,000
c. Jan. 1st - Mar. 31st, 2002 $ 3,700,000
d. Apr. 1st - June 30th, 2002 $ 5,500,000
-----------
Total Year One Goal $11,000,000
-----------
Marketlink and CyberGuard further agree that in the event Marketlink
exceeds the revenue commitment for a prior quarter of this Agreement
but fails to meet the revenue commitment for the following quarter
during the first year of this Agreement, then the revenue amount
achieved by Marketlink above the prior quarter's commitment ("Excess
Revenue") shall be applied towards the commitment for the following
quarter. (By way of example, if Marketlink achieves revenue of $400,000
during the first quarter of this Agreement and $1,400,000 during the
second quarter of this Agreement, then the $100,000 Excess Revenue
achieved in the first quarter will be applied towards the second
quarter commitment, thus Marketlink would then meet its $1,500,000
revenue commitment.)
15. Manage CyberGuard Resellers existing as of the effective date of this
Agreement.
<PAGE> 18
EXHIBIT E
Requirements Of CyberGuard Corporation
During the term of this Agreement, CyberGuard will:
1. Pay compensation to Marketlink in accordance with the terms
and conditions set forth in this Agreement, including Exhibit
C above.
2. CyberGuard will budget $100,000 to be devoted to: (a) the
Marketlink National Sales Training event held in Las Vegas the
second week of November; and (b) Participation in
approximately 75 regional tradeshows that Marketlink is an
exhibitor. Marketlink and CyberGuard will mutually determine
the best shows to participate in on a case-by-case basis.
3. Provide a reasonable amount of print literature and other
marketing materials estimated at approximately 10,000 pieces
of each document per year.
4. Provide seventeen (17) demonstration equipment/sales samples
for seventeen Marketlink offices, tradeshow usage and rotating
field units, subject to the terms and conditions of the
Company's License Agreement. These 17 units must be returned
to CyberGuard at the expiration or termination of this
Agreement. All risk of loss, damage or destruction in
connection with these 17 units rests with Marketlink and
Marketlink will fully indemnify CyberGuard for all liabilities
resulting from any such loss, damage or destruction.
5. Preparation and supply of specific electronic marketing
materials for e-mail blasts as requested by Marketlink and
finally approved by CyberGuard.
6. Provide demonstration hardware and software available for all
Resellers, as outlined in the CyberGuard Reseller Agreement.
7. CyberGuard will sustain a marketing campaign to create Product
awareness at the end user level at least on the level of the
marketing campaign as of the effective date of the Agreement.
8. CyberGuard will provide to Marketlink all leads in the
Territory generated for distribution to the Marketlink
reseller channel.
9. CyberGuard Regional Managers will work in conjunction with
Marketlink field sales personnel to build channel for
CyberGuard.
10. CyberGuard Systems Engineers will work in conjunction with
Marketlink personnel on an "as needed" basis.
11. Provide Resellers with technical training seminars; technical
written support materials; and a telephone or web-based
technical support for Company products and information about
competitive products, in accordance with CyberGuard Reseller
Agreement.
<PAGE> 19
12. Company agrees to train and educate Marketlink's customer
service personnel about the Products, to the extent of
Company's abilities, provided that such training is held at
the Company's Fort Lauderdale, FL facility and that Marketlink
will pay for all travel and travel-related expenses in
connection with the training.
<PAGE> 20
EXHIBIT F
HOUSE ACCOUNTS
As of the effective date of this Agreement, the following are designated House
Accounts:
<PAGE> 21
AMENDMENT NO. 1
TO THE MANUFACTURER'S REPRESENTATIVE AGREEMENT
This Amendment No. 1 ("Amendment") to the below-referenced Agreement is entered
into effective as of July 11, 2001 by and between CyberGuard Corporation
("CyberGuard") and Marketlink Technologies, LLC ("Marketlink").
WHEREAS, CyberGuard and Marketlink are parties to that certain Manufacturer's
Representative Agreement dated July 1, 2001 ("Agreement"); and
WHEREAS, CyberGuard and Marketlink wish to amend the Agreement to the mutual
benefit of both parties hereto.
NOW THEREFORE, for and in consideration of the mutual promises and covenants set
forth herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, CyberGuard and Marketlink hereby
agree to amend the Agreement as follows:
1. Exhibit B of the Agreement shall be amended by deleting the
following phrase "TERRITORY The United States" and
substituting it with the following:
"Territory: The United States except for California, Nevada,
New York, Georgia, North Carolina, South Carolina, Florida,
Mississippi, Alabama and Tennessee.
In the event that (1) all agreements between Symantec, its
successors and assigns, on one hand, and Marketlink and/or the
Three Owners, on the other hand, relating to Symantec's
Firewall/VPN products shall terminate for whatever reason
during the term of this Agreement, and (2) Marketlink notifies
CyberGuard in writing of all terminations in their entirety,
and (3) CyberGuard then acknowledges to Marketlink in writing
that the Territory hereunder will be the entire United States,
then effective as of the date of CyberGuard's written
acknowledgement to Marketlink ("Territory Change Date") the
Territory under this Agreement shall be the entire United
States; provided, however, that: (A) the Special Offices
comply with the terms and conditions of this Agreement, and
(B) no additional compensation will be paid by CyberGuard
hereunder except for (i) the commission payments for Product
sales, if any, (excluding House Accounts) in the regions of
the Special Offices, and (ii) in the event the Territory
Change Date is within the first 12 months from the effective
date of this Agreement, then effective as of and prorated from
the Territory Change Date the amount of Base Compensation
and/or draw, as applicable, payable to Marketlink hereunder
will be increased to $75,000 per month and Marketlink's
quarterly revenue commitments will be increased to the
following:
a. July 1st - Sept. 30th, 2001 $ 300,000
b. Oct. 1st - Dec. 31st, 2001 $ 1,500,000
c. Jan. 1st - Mar. 31st, 2002 $ 3,700,000
d. Apr. 1st - June 30th, 2002 $ 5,500,000
-----------
Total Year One Goal $11,000,000."
------------
<PAGE> 22
2. Section 2 of Exhibit C of the Agreement shall be amended by
deleting the phrase "$75,000 per month" and replacing it with
"$57,000 per month".
3. Section 4(a) of the Exhibit C of the Agreement shall be
amended by deleting the phrase "33,000 shares" and
substituting it with "30,000 shares" and deleting the phrase
"50 Resellers" and substituting it with "35 Resellers".
4. Section 4(b) of the Exhibit C of the Agreement shall be
deleted in its entirety and the following Section 4(b) shall
be inserted in its place:
"Option to purchase, in the aggregate, 210,000 shares
of CyberGuard Common Stock; with vesting in 20,000
shares increments upon Marketlink's achieving each $5
million in revenue to CyberGuard, with the below
3-year revenue commitments, at the prices per share
equal to the closing price of the CyberGuard Common
Stock on the effective date of this Agreement:
Year Revenue
1. $ 7.7M
2. $14.35M
3. $29.4M"
5. Section 4(c) of the Exhibit C of the Agreement shall be
amended by deleting the phrase "17,000 shares" and
substituting it with "20,000 shares" and the phrase "11
million" and substituting it with "7.7 million".
6. The first sentence of Section 4(d) of the Exhibit C of the
Agreement shall be amended by deleting the phrase "150,000
shares" and substituting it with "125,000 shares".
7. Section 4(d)(3) of the Exhibit C of the Agreement shall be
amended by deleting the phrase "20,000 shares" and
substituting it with "12,334 shares".
8. The first sentence of Section 4(d)(4) of the Exhibit C of the
Agreement shall be deleted in its entirety.
9. Section 4(e) of the Exhibit C of the Agreement shall be
deleted in its entirety.
10. Section 12 of the Exhibit D of the Agreement shall be deleted
in its entirety and the following Section 12 shall be inserted
in its place:
"Not market, promote for sale, represent in sale in any
way, sell, or distribute products competitive to the
Products (including without limitation, Firewall Software,
Firewall Appliance, VPN) directly or indirectly in the
Territory; provided that, specifically, the OpenReach VPN
product marketed by Marketlink shall not be considered
competitive to the Products for the purposes of this
Agreement."
11. Section 14 of the Exhibit D of the Agreement shall be deleted
in its entirety and the following shall be inserted in its
place:
"14. Achieve quarterly revenue commitment in the first year as
follows:
<PAGE> 23
a. July 1st - Sept. 30th, 2001 $ 200,000
b. Oct. 1st - Dec. 31st, 2001 $ 1,050,000
c. Jan. 1st - Mar. 31st, 2002 $ 2,600,000
d. Apr. 1st - June 30th, 2002 $ 3,850,000
-----------
Total Year One Goal $ 7,700,000
-----------
Marketlink and CyberGuard further agree that in the
event Marketlink exceeds the revenue commitment for a
prior quarter of this Agreement but fails to meet the
revenue commitment for the following quarter during
the first year of this Agreement, then the revenue
amount achieved by Marketlink above the prior
quarter's commitment ("Excess Revenue") shall be
applied towards the commitment for the following
quarter. (By way of example, if Marketlink achieves
revenue of $300,000 during the first quarter of this
Agreement and $950,000 during the second quarter of
this Agreement, then the $100,000 Excess Revenue
achieved in the first quarter will be applied towards
the second quarter commitment, thus Marketlink would
then meet its $1,050,000 revenue commitment.)"
12. The following Section 17 shall be inserted at the end of
Exhibit D of this Agreement:
"Assure that Marketlink's website displays during the
term of this Agreement CyberGuard Corporation as
Marketlink's firewall/VPN partner."
13. The following Section 1.G shall be inserted at the end of
Section 1 of the Agreement:
""Special Offices" means the Marketlink's offices
located outside the Territory in charge of the
following regions: California, Nevada, New York,
Georgia, North Carolina, South Carolina, Florida,
Mississippi, Alabama and Tennessee."
14. The following Section 1.H shall be inserted at the end of
Section 1 of the Agreement:
""Three Owners" means the three Marketlink owners, or
any of their successors or replacements during the
term of this Agreement, in charge of the Special
Offices."
15. Section 10.B (1) and (2) shall be deleted it in its entirety
and the following Section 10.B shall be substituted in its
place:
"No additional compensation of any kind shall be paid
to Marketlink, except that (1) in the event this
Agreement is terminated for cause within the first
six months from the effective date of the Agreement,
CyberGuard will pay to Marketlink the pro-rated
amount of the Base Compensation that was unpaid but
due and earned through the effective date of
termination of this Agreement, and (2) in the event
this Agreement is terminated for cause by CyberGuard
during the first twelve months from the effective
date hereof due to Marketlink's failure to achieve
the minimum revenue commitments set forth in Section
14 of Exhibit D hereof, then CyberGuard will pay to
Marketlink commission in the percentage(s) as set
forth in this Agreement for all Product sales in the
Territory by the Resellers, if any, which sales were
accepted by CyberGuard (except for House Accounts)
during the period of three months from the effective
date of termination of this Agreement, subject to
CyberGuard's unconditional right to chargeback
Marketlink for the commissions paid or credited to
Marketlink on all sales accepted by CyberGuard but
(i) not paid for by a Customer
<PAGE> 24
over ninety (90) days past the invoice date and/or
(ii) returned by Customer to CyberGuard for credit."
16. Capitalized terms not otherwise defined in this Amendment
shall have the meanings ascribed to such terms in the
Agreement.
17. All terms and conditions of the Agreement are hereby ratified
and shall remain in full force and effect except to the extent
this Amendment expressly modifies or is inconsistent with the
terms and conditions of the Agreement, in which case the terms
of this Amendment shall be controlling.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
above-referenced Agreement effective as of the date first written above.
CYBERGUARD CORPORATION MARKETLINK TECHNOLOGIES, LLC
BY: BY:
---------------------------- ------------------------------
NAME: NAME:
-------------------------- -----------------------------
TITLE: TITLE:
------------------------- ----------------------------
DATE: DATE:
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