Master Distributor Agreement - Artera Group Inc. and Spyder Technologies Group LLC
MASTER DISTRIBUTOR AGREEMENT
(United States, Canada, South America & Central America)
Master Distributor Agreement ("Agreement"), dated as of September 1, 2003,
between Artera Group, Inc. ("Artera"), a Delaware corporation, and Spyder
Technologies Group, LLC, a Connecticut limited liability company
("Distributor").
WHEREAS, (i) Artera is engaged in the development, distribution and
operation of Internet and Intranet infrastructure technologies, products and
services, (ii) Distributor is engaged in the distribution and marketing of
Internet and Intranet technologies, products and services to or through
resellers thereof and (iii) Distributor desires to obtain from Artera the right
to distribute and market certain of Artera's products, and Artera is willing to
grant such right, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the covenants herein, and other
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
Article 1. DEFINITIONS
As used herein, the terms described below have the following meanings:
1.1 "Affiliate" shall mean any entity that, directly or indirectly, is
controlled by, in control of or under common control with the entity as to
which the term "Affiliate" is used.
1.2 "CRM System" shall mean Artera's customer relations management system that
as a part of the Service support system allows Subscribers of Distributor
or its Resellers to be uniquely identified from other subscribers to the
Service and allows Distributor, Resellers and Artera to interface with
Artera's records to initiate and authenticate Subscriptions, activate or
deactivate Subscribers' access to the Data Center and bill Subscribers.
1.3 "Data Center" shall mean the hardware, software and bandwidth providing the
Internet-side data optimization functions for the Service.
1.4 "Deliverables" shall mean the materials described on Schedule 4.3 hereto to
be delivered by Artera to Distributor under Section 4.3 hereof.
1.5 "End User" shall mean a client computer of an individual user, configured
to utilize the Service under a Subscription. In the case of a residential
Subscriber, the End User is also the Subscriber. In the case of a Small
Business or Government Entity Subscriber, the End User is the client
computer of the individual user of the Service rather than the subscribing
business or entity itself.
1.6 "Government Entity" shall mean a Federal, state, provincial, local or other
governmental unit or authority, or a department, division or segment
thereof.
1.7 "Know-how", in general, shall have its usual meaning, that is, among other
things, all factual knowledge and information not capable of precise,
separate description but that, in accumulated form, after being acquired as
the result of trial and error, gives one an
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ability to produce and market something that one otherwise would not have
known how to produce with the accuracy or precision necessary for
commercial success.
1.8 "Level 1 Support" shall mean support for Subscribers and End Users as
described in Schedule 1.8.
1.9 "Level 2 Support" shall mean support for Distributor and the Resellers to
assist them in providing Level 1 Support.
1.10 "License Fee" shall mean any license fee payable by Distributor to Artera
under Section 3.1 hereof.
1.11 "Reseller" shall mean a person or entity that, under the auspices of this
Agreement, enters into an agreement for the resale or distribution of the
Service to Subscribers in the Territory or to other Resellers (as
subdistributors) that perform such resale or distribution to Subscribers in
the Territory.
1.12 "Protected Account" shall mean a person or entity named in Schedule 2.2,
with respect to which the parties' rights and obligations shall be as
described in Section 2.2 and Schedule 2.2 of this Agreement.
1.13 "Service" shall mean the "Artera Turbo" service, as configured from time to
time, including its software, distributed to Subscribers as a bundled or
unbundled subscription service, including all updates, enhancements and
modifications thereof, together with the right to use all of the foregoing
in connection with the Data Center.
1.14 "Service Fee" shall mean the fee paid by a Subscriber for its Subscription,
excluding sales, use, VAT, excise and similar taxes.
1.15 "Small Business" shall mean a business or other organizational entity
(other than a Government Entity) that (i) does not have or use 250 End User
personal computers or computer terminals and (ii) does not sell, distribute
or market the Service.
1.16 "Subscriber" shall mean an individual, Small Business or Government Entity
that subscribes to the Service via a Reseller. In the case of a residential
Subscriber, the Subscriber is the End User. In the case of a Small Business
or Government Entity Subscriber, the Subscriber is the subscribing business
or entity rather than any individual client computer or user within that
business or entity.
1.17 "Subscriber Software" shall mean the Service software resident or installed
on the Subscriber's or its End Users' personal computer(s) or at the
Subscriber's location.
1.18 "Subscription" shall mean a subscription and license for a Subscriber to
use the Service on its personal computer(s).
1.19 "Technical Information" shall mean technical, design and engineering
information pertaining to the design, manufacture, production and
distribution of the Service in the form of designs, plans, drawings,
specifications, reports, records, manuals, other written
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materials, computer programs and software and other forms or media relating
thereto.
1.20 "Territory" shall mean the United States, Canada, South America and Central
America (not including Puerto Rico, the Caribbean and Southern Atlantic
islands).
Article 2. GRANT OF LICENSE AND RIGHTS
2.1 License. Artera hereby grants to Distributor, during the term of this
Agreement, a license to distribute the Service to Subscribers through one
or more levels of resellers (which, upon such distribution, shall be deemed
"Resellers" under this Agreement) in the Territory. The license to
Distributor hereunder includes the right to make copies of the Subscriber
Software to be provided to Subscribers; to reproduce and distribute the
Service documentation, product descriptions and promotional materials; and,
subject to Section 2.4 hereof, to modify such materials as requested by
Resellers for the purpose of identifying the Reseller in connection with
the Service. Such license, however, conveys no right to modify the Service,
to prepare derivative works of the Service, to use the Service for
Distributor's own purposes or to sell or copy the Service for any purpose
other than for delivery to Resellers or their Subscribers as contemplated
by this Agreement.
2.2 Protected Accounts. During the term of this Agreement, there may be persons
or entities that are "Protected Accounts" under this Agreement. If a person
or entity is a Protected Account, Artera will not enter into or pursue
(other than on behalf of Distributor) an agreement with such person or
entity to sell or distribute the Service to residential consumers, Small
Businesses of Government Entities in the Territory, and will not actively
support or assist in any third party distributor's pursuit of such an
agreement. Only persons or entities with at least 25,000 potential End
Users are eligible to be Protected Accounts. The persons or entities, if
any, that are Protected Accounts as of the date of this Agreement are set
forth in Schedule 2.2. Distributor may in writing propose to add persons or
entities to Schedule 2.2 as additional Protected Accounts and shall
include, in each such proposal, the name of the proposed Protected Account,
the pertinent division or geographical area within the proposed Protected
Account (if applicable), the name and title of Distributor's contact at the
proposed Protected Account, Distributor's relationship to that contact and
an estimate of the number of potential End Users for the Protected Account.
Such person or entity shall become a Protected Account if Artera grants its
written consent to such addition. Artera shall be under no obligation to
grant such consent, and may condition such consent on Distributor's
securing a distribution commitment for the Service from the applicable
Protected Account within a specified period of time or on any other
conditions. Any time limitations or other conditions applying with respect
to Protected Accounts in Schedule 2.2 as of the date of this Agreement are
included within Schedule 2.2 as of the date hereof.
2.3 Acceptance. Distributor hereby (a) accepts the rights granted to it by
Artera under this Agreement and (b) acknowledges that the rights that
Artera has granted to Distributor hereunder are limited to the distribution
and marketing of the Service to Resellers in the Territory, subject to the
other limitations set forth in this Agreement.
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2.4 Intellectual Property Usage and Notices. All right, title and interest in
and to the Service, including all copyrights, trademarks, service marks,
logos, names, designations, patents and other intellectual property
embodied in the Service or provided by Artera in connection therewith
(including but not limited to the Subscriber Software and the mark "Artera
Turbo") shall remain the property of Artera. Distributor may use and copy
such trademarks, service marks and copyrighted material of Artera as
reasonably necessary to perform under this Agreement. All copies of the
Subscriber Software and all documentation and marketing materials
distributed or used by Distributor shall be marked with a legend
identifying Artera as the owner and developer of the Service, with the
appropriate patent, copyright and trademark notices, and Distributor shall
not remove any such notices from any Subscriber Software or other materials
provided to it by Artera; provided, however, that, in distributing the
Service to Subscribers, Distributor or the Resellers may reference their
own names or brands rather than Artera's if done in a manner that does not
prejudice Artera's intellectual property rights in and to the Service.
2.5 Reseller Agreements. All Service distribution agreements with Resellers
hereunder ("Reseller Agreements") shall be between Distributor and the
respective Resellers. Artera shall not be a party to or have any
obligations under any Reseller Agreement. Distributor shall have no
authority to bind Artera with respect to any Reseller, and Distributor
shall not represent to any Reseller or anyone else that it has such
authority. No Reseller Agreement may be inconsistent with this Agreement.
Any representations or warranties regarding the Service contained in a
Reseller Agreement shall be the sole responsibility of Distributor, unless
Artera expressly agrees otherwise in writing in advance for the particular
Reseller.
2.6 Subscription Agreements. All Subscription agreements hereunder
("Subscription Agreements") shall be between Resellers and their respective
Subscribers. Artera shall not be a party to or have any obligations under
any Subscription Agreement; provided, however, that Artera shall have the
right to require that Subscribers agree to Artera's Terms of Service for
the Service, which Terms of Service Artera may amend from time to time.
Distributor shall have no authority to bind Artera with respect to any
Subscriber, and Distributor shall not represent to any Subscriber or anyone
else that it has such authority. No representation or warranty regarding
the Service contained in a Subscription Agreement shall be the
responsibility of Artera, unless Artera expressly agrees otherwise in
advance in writing for the particular Subscriber.
Article 3. FEES AND CERTAIN SUPPORT SERVICES
3.1. License Fee. Distributor shall pay to Artera a License Fee in the amount,
and on the date(s), set forth in Schedule 3.1.
3.2. Royalty. For each calendar month (or part thereof) of each Subscription,
Artera shall be entitled to a Royalty. The Royalty shall be calculated on a
per End User basis. The amount or formula of the Royalty is set forth in
Schedule 3.2.
3.3. Billing, Collections and Payments. Service Fees shall be billed for and
collected, and Royalties shall be paid, as described in Schedule 3.3.
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3.4. Provision and Operation of Data Center. For any Reseller, Distributor may
elect to have such Reseller, rather than Artera, provide and operate the
Data Center serving such Reseller's End Users. The minimum specifications
for a Reseller Data Center are set forth in Schedule 3.4.
3.5. Mergers, etc. In the event of a merger, acquisition or combination of
entities, one of which is a Reseller and the other of which is not,
Distributor's rights with respect to the surviving entity shall be as
follows: If the Reseller is the acquiror, the surviving entity shall be a
Reseller for purposes of this Agreement. If the Reseller is not the
acquiror, the surviving entity shall not be a Reseller for purposes of this
Agreement. If it is not reasonably clear which entity is the acquiror or if
the transaction is a merger of equals, the surviving entity shall be a
Reseller for purposes of this Agreement only if the Reseller was the entity
that had more End Users as of the date of the relevant transaction.
Article 4. DISCLOSURES and DELIVERies
4.1 Disclosure. The parties shall disclose to each other and Artera shall
disclose to Resellers such appropriate Technical Information as is
reasonably required to accomplish the purposes of this Agreement. Neither
party, however, that shall be obligated to disclose information, the
disclosure of which has been restricted by a third party.
4.2 Treatment. All disclosed Technical Information that is Confidential
Information shall be kept confidential by the receiving party in accordance
with Article 5 hereof and shall remain the property of the disclosing
party.
4.3 Deliverables. Artera agrees that the Service shall be available for
distribution and marketing by Distributor and Resellers and completely
functional to Subscribers in accordance with the availability dates set
forth in Schedule 4.3.
Article 5. CONFIDENTIALITY
5.1. Definitions. Each party possesses confidential information relating to its
business and technology that has substantial value to such party
("Confidential Information"). Subject to Section 5.4 hereof, Confidential
Information includes but is not limited to Deliverables, Technical
Information, Know-how, designs, improvements, inventions, techniques,
software documentation, financial statements, projections, prices, costs,
customer lists, supplier lists and anything else marked "Confidential
Information" or similarly designated as being confidential. Any
Confidential Information disclosed between the parties hereto orally or
visually, in order to be subject to this Agreement, shall be so identified
to the receiving party at the time of disclosure and confirmed in a written
summary appropriately marked within ten days after oral or visual
disclosure.
5.2. Treatment. Except as expressly permitted under this Section 5.2 and Section
5.4 hereof, each party shall, during the term of this Agreement and for
five years thereafter, hold in confidence and not disclose to third parties
all Confidential Information of the other party disclosed directly or
indirectly to it. The recipient of Confidential Information shall grant
access to it only to employees, contractors, agents and suppliers who need
to receive such Confidential Information in connection with this Agreement.
Such persons with access
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to Confidential Information shall be placed under obligation (a) to hold in
confidence all Confidential Information provided to them in the course of
their service; (b) to use such Confidential Information only in the course
of performing their duties; and (c) to assign to their employer or the
party retaining them all inventions or improvements relating to such
entity's business and conceived while in such entity's employ or retained
by such entity (unless such assignment is prohibited by applicable law).
All documents, writings and other embodiments containing Confidential
Information of the other party shall be maintained by the receiving party
in a prudent and secure manner. Distributor may disclose Artera's
Confidential Information to Resellers and prospective Resellers as
necessary to perform this Agreement, but only if such Reseller or
prospective Reseller has entered into a written non-disclosure agreement
with Artera, or has entered into a written non-disclosure agreement with
Distributor (for the benefit of Artera) in a form substantially equivalent
to the terms hereof. For purposes of this Article 5, delivery by
Distributor to a Subscriber, whether directly or through a Reseller, of the
Subscriber Software shall not constitute a disclosure by Distributor of
Confidential Information of Artera. In no event shall the party receiving
Confidential Information of the other party disassemble, reverse engineer,
re-engineer, redesign, decrypt, decipher, reconstruct, re-orient, modify or
alter any Confidential Information of the disclosing party or any circuit
design, algorithm, logic or program code in any of the disclosing party's
products, models or prototypes that contain Confidential Information, or
attempt any of the foregoing.
5.3. Return. All documents and other embodiments of a party's Confidential
Information, as well as those created or derived from the disclosing
party's Confidential Information that incorporate the disclosing party's
Confidential Information, and all copies thereof, shall be returned
promptly to the disclosing party by the other party upon the expiration or
any termination of this Agreement; provided, however, that Distributor may
retain (subject to the restrictions in this Article 5) such Confidential
Information as is necessary for it to satisfy any post-termination support
obligations it may have under Section 7.4 hereof.
5.4. Exclusions. Confidential Information shall not include information that (a)
was at the time of disclosure in the public domain through no fault of the
party receiving it; (b) becomes part of the public domain after disclosure
to the party receiving it through no fault of such party; (c) was in the
possession of the party receiving it (as evidenced by written records) at
the time of disclosure and was not acquired directly or indirectly from the
other party or a third party under a continuing obligation of confidence of
which the party receiving it was aware; (d) was received by the party
receiving it (as evidenced by written records) after the time of disclosure
hereunder from a third party who did not require it to be held in
confidence and who did not acquire it directly or indirectly from the other
party under a continuing obligation of confidence of which the party
receiving it was aware; (e) is required by law, governmental regulation,
court order or the rules of a securities exchange to be disclosed
(provided, that a party required to so disclose Confidential Information
shall use best efforts to notify the other party of such potential
disclosure as soon as practicable so that such party may seek a protective
order for such Confidential Information); (f) was developed independently
by the receiving party and without the use of Confidential Information
received from the disclosing party; or (g) was disclosed by the party
owning it to third parties without restrictions on use or disclosure.
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5.5. Other Confidentiality Agreements. Nothing in this Agreement shall limit the
applicability of any other confidentiality or non-disclosure agreement in
effect between the parties; provided, however, that to the extent of any
inconsistency between the provisions of this Section 5 and the provisions
of any such other confidentiality or non-disclosure agreement, the
agreement with the stricter confidentiality or non-disclosure provisions
shall govern.
Article 6. MARKETING AND SUPPORT OBLIGATIONS
6.1 Level 1 Support. Distributor shall be responsible for Level 1 Support to
the Subscribers and End Users. Distributor may satisfy such obligation by
providing the Level 1 Support itself, causing Resellers to provide the
Level 1 Support or causing third parties to provide the Level 1 Support.
Level 1 Support shall be provided not less than 8:30am to 5:30pm in the
respective time zones of the End Users, Monday through Friday.
6.2 Level 2 Support. Artera shall provide Level 2 Support, which shall be
available at no charge to Distributor and Resellers not less than 8:30am to
5:30pm Eastern time, Monday through Friday. Access to Level 2 Support shall
be by online methods and toll-free telephone.
6.3 Training. Artera shall make available to Distributor and Resellers Level 1
Support training and training on the CRM System. Such training may be in
regularly scheduled classes at Artera's offices or by such other means as
Artera may determine. The Level 1 Support training must be attended by
Distributor or the Reseller or third party providing Level 1 Service on its
behalf prior to the start of actual distribution of the Service by
Distributor or the applicable Reseller.
6.4 Service Updates, Etc. Artera shall provide all updates, enhancements,
improvements or modifications of the Service to Distributor or to Resellers
and their Subscribers at no cost via online downloads, and shall provide to
Distributor a master CD for each such upgrade, enhancement, improvement and
modification, for copying and distribution to Resellers.
Article 7. TERM and termination
7.1. Term. The term of this Agreement is from the date hereof until five years
thereafter, unless modified by written agreement of the parties or earlier
terminated under this Article 7.
7.2. Breach. Either party may terminate this Agreement for a material breach
(including any non-payment) by the other party, upon 30 (for payment
breaches) or 60 (for other material breaches) days' notice and opportunity
to cure; provided that a non-payment breach shall also require payment of
interest at the rate of 6% per annum from the due date to the payment date.
In the event of a material breach by Distributor not cured as described
above, Artera may elect, in lieu of termination of this Agreement,
irrevocably to terminate any distribution protections Distributor may have
under Section 2.2 of this Agreement.
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7.3. Effect of Termination. Expiration or termination of this Agreement shall
not terminate any Subscription Agreements.
7.4. Royalties and Support Upon Certain Terminations. Upon any expiration or
termination of this Agreement other than termination by Artera under
Section 7.2 hereof, Distributor shall continue to receive net payments out
of Service Fees as described in Schedule 3.3, with respect to those
specific Subscribers for which Service Fees were payable on the date of
such expiration or termination. Such right to net payments shall apply
until the expiration or termination of the respective Subscriptions of
those specific Subscribers and shall be subject to Distributor's continued
satisfaction, with respect to those Subscribers, of the Level 1 Support and
other obligations pertaining to Subscribers that are set forth in this
Agreement.
7.5. Survival. Section 4.2, Article 5, Section 7.4, Article 9 and Article 10
shall survive the expiration or any termination of this Agreement.
Article 8. NOTICES
Notices under this Agreement shall be in writing and sent by personal service,
facsimile, recognized commercial courier or registered or certified mail (all
charges prepaid), addressed as follows:
If to Artera: Artera Group, Inc.
20 Ketchum Street
Westport, CT 06880
Attn: Chairman & President
Facsimile: 203-226-3123
-- with a copy to: Artera Group, Inc.
20 Ketchum Street
Westport, CT 06880
Attn: General Counsel
Facsimile: 203-226-4338
If to Distributor: Spyder Technologies Group, LLC
40 Kellogg Hill Road
Weston, CT 06883
Attn: President
Facsimile: 203-454-3094
Article 9. INDEMNIFICATION
9.1 Indemnification Obligations. Artera and Distributor each agrees to
indemnify, defend, and hold harmless the other party, its Affiliates, and
the officers, directors, employees and agents of all thereof (collectively,
the "Indemnified Party") against all losses, claims, liabilities and
expenses (including reasonable attorneys' fees) (collectively, "Losses")
incurred on account of a suit, claim or proceeding purporting to be based
on a failure by
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the other party (the "Indemnifying Party") to perform obligations under
this Agreement.
9.2. Indemnification Procedures. The Indemnified Party shall promptly advise the
Indemnifying Party of any suit, claim or proceeding for which
indemnification is to be sought and shall cooperate with the Indemnifying
Party in the defense or settlement thereof. The Indemnifying Party shall
select, retain and pay counsel in connection with such suit, claim or
proceeding, subject to the Indemnified Party's consent, which shall not be
unreasonably withheld. No settlement shall be made by the Indemnifying
Party without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld.
Article 10. WARRANTIES and disclaimer
10.1 Right to License. Artera represents and warrants that (a) it is the owner
or licensee of the Service (including the Subscriber Software); (b) it is
the owner, lessee or otherwise has the right to use the Data Center; (c) it
has the right, power and authority to grant Distributor the rights and
licenses as set forth in this Agreement; (d) to the best of its knowledge,
the Service does not infringe any intellectual property or other right of
any third party in the Territory.
10.2 Disclaimer. Except as specifically set forth in this Agreement, Artera
disclaims any express or implied warranty of the accuracy, reliability,
value or merchantability of the Service, or its suitability or fitness for
any purpose. Artera disclaims all other warranties of whatever nature,
express or implied. Except as otherwise set forth in this Agreement, Artera
disclaims all liability for Losses resulting from the use of the Service.
This disclaimer embraces special, incidental, punitive or consequential
damages and damages for interruption of use or loss or corruption of data.
Article 11. MISCELLANEOUS
11.1 Books and Records. Upon request of either party hereto with ten days' prior
notice, the other party shall make available for review by the requesting
party such books and records as are reasonably required to demonstrate
compliance with the obligations of this Agreement. Requests hereunder may
be made no more than once per calendar year, and may pertain only to the
then current and immediately preceding calendar year.
11.2 Choice of Law, Jurisdiction and Venue. This Agreement shall be interpreted
in accordance with the laws of the State of Connecticut, USA. Any action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the State courts of
Connecticut or in the Federal courts located in the State of Connecticut.
Both parties agree to submit to the jurisdiction of such courts and agree
that venue at such courts is proper.
11.3 Interpretation. No provision of this Agreement shall be interpreted
against a party solely because such party or its attorney drafted such
provision.
11.4 Force Majeure. In the event of delay in performance under this Agreement
due to unforeseeable causes beyond a party's reasonable control, including
but not limited to
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acts of God, acts of the government, fires, floods, strikes, unusually
severe weather ("Events of Force Majeure"), the time for performance shall
be extended for the period of the delay; provided, however, that the party
whose performance was so delayed shall use all reasonable efforts to
minimize the effects of any Event of Force Majeure.
11.5 Public Announcements. Neither party may issue a public announcement about
this Agreement unless the other party shall have approved the text thereof
(which approval shall not be unreasonably withheld) or unless required by
applicable law (including but not limited to filings with the U.S.
Securities and Exchange Commission).
11.6 Independent Contractors. Each party to this Agreement is an independent
contractor to the other and not the partner, employer, agent or
representative of the other.
11.7 Assignment. Neither party may assign this Agreement or any of its rights
or obligations hereunder except to its Affiliates or with the prior written
consent of the other party, which consent shall not be unreasonably
withheld. This Agreement shall inure to the benefit of and be binding upon
the parties' successors and permissible assigns.
11.8 Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and, as of the date
hereof, supersedes all other prior or contemporaneous written or oral
agreements between such parties with respect to such subject matter,
including but not limited to the Temporary Master Distributor Agreement for
the U.S.A., dated as of October 29, 2002, between the parties (the
"Temporary Agreement"); provided, however, that all obligations of the
parties accrued through the date hereof under the Temporary Agreement shall
be unaffected by this Agreement.
11.9 Amendments. No amendment of any provision hereof shall be binding unless
in writing and executed by both parties.
11.10 Severability. If any part of this Agreement is declared invalid or
unenforceable, such decision shall not affect the validity or
enforceability of the remainder hereof.
11.11 Waivers. No waiver of any right or claim under this Agreement shall
affect the right of the waiving party to enforce any other claim or
right hereunder.
IN WITNESS WHEREOF, Artera and Distributor have duly executed this
Agreement as of the date first written above.
ARTERA GROUP, INC. SPYDER TECHNOLOGIES GROUP, LLC
By: /s/ Cy E. Hammond By: /s/ Jonathan Parrella
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Cy E. Hammond Jonathan Parrella
Treasurer President
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Schedule 1.8
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LEVEL 1 SUPPORT
The purpose of Level 1 Support is to assist Subscribers and End Users in the
basic installation and usage of the Service. This includes answering general
questions to help Subscribers and End Users understand what the Service is and
how it provides a benefit to them. Level 1 Support is responsible for assisting
Subscribers and End Users with the items listed below. This list may be refined
as experience is gained and the Service evolves over time.
1. Establishing an Internet connection (typically via Windows Dial-Up
Networking), launching a Web browser and surfing to various Web sites on
the Internet.
2. Assisting in downloading the Service's End User software, running the
Service's setup program, installing the Service software on the End User's
PC and, if necessary, surfing to the Service's Web site.
3. Launching and running the Service, including answering basic questions
about the system configuration needed for running the Service (i.e.,
Windows version, memory, hard disk space) as documented on the Service's
Web site.
4. Answering basic questions about navigating within the Service's End User
interface.
5. Showing Subscribers and End Users how to know if the Service is working.
This includes pointing out the Network View, Activity View and SpeedBar.
6. Confirming that the browser is actually forwarding its requests to the Data
Center, by reviewing the Activity View and the browser's proxy settings.
7. Assisting an End User who uses a dialer other than Windows Dial-Up
Networking (e.g., Juno or NetZero) or who uses a browser other than
Internet Explorer (requiring telling the End User how manually to set the
browser's proxy settings).
8. Verifying that the Subscriber or End User has a Data Center connection
online.
9. Assisting in uninstalling the Service.
10. Explaining the Service's Firewall and how to disable it if desired
(including explaining the ramifications of disabling it). Assisting in
opening additional ports in the Service's Firewall. The Subscriber or End
User should be told that they should not run the Service's Firewall with
any other firewall.
11. Assisting in adding sites into the Service's Site Blocking list and/or Ad
Blocking list. Explaining how Ad Blocking removes ads and replaces them
with "place holder" graphics, but that this can result in what appears to
be "missing" elements on the page. Explaining how to turn off Ad Blocking
if desired (including explaining that this will reduce the speed benefits
of the Service).
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12. Explaining how to change the image quality within the Service. This
includes explaining how to refresh the page once quality has been set to
"Best Quality." The Subscriber or End User should be informed of how to
revert back to "Best Speed" image quality setting and that if they do not
revert back to "Best Speed," the speed benefits of the Service will be
reduced.
13. Explaining what a cache is, and how to adjust its settings within the
Service.
14. Explaining what settings in the browser are changed when the Service is
running (including proxy settings, the number of requests the browser will
issue at one time and disablement of the browser's cache). The Subscriber
or End User should be told that when the Service is not running, or is
uninstalled, these settings in the browser are changed back to their
original values.
15. Answering questions about obtaining (i.e., downloading) Service product
updates and installing them.
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Schedule 2.2
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PROTECTED ACCOUNTS
This Schedule 2.2 lists the Protected Accounts, including any time limitations
or other conditions that apply with respect thereto. Unless otherwise specified
in writing, a person or entity is a Protected Account for an initial period of
two months. If a Protected Account does not enter into a Reseller Agreement with
Distributor during the initial period, such person or entity automatically
ceases to be a Protected Account as of the end of the initial period unless
Artera grants extension(s) of the period in writing. Each such extension shall
be for an additional two-month period unless otherwise specified in writing.
Artera shall be under no obligation to grant any such extensions. If, after the
date of this Agreement, Distributor proposes to add to the list of Protected
Accounts or to extend a Protected Account period, Distributor shall provide
Artera the information set forth below and such other information as is
requested by Artera. Any inaccuracy or error contained in a proposal by
Distributor to add to the list of Protected Accounts or to extend a Protected
Account period shall void the addition or extension, notwithstanding any consent
to the addition or extension by Artera.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name of Protected Division Start Date End Date Extended
Account or As As End Date As
(Person or Entity) Geographical Protected Protected Protected
Area Account Account Account
</TABLE>
Techno Brands New York, NY Date of this Agreement
Tricordia New York, NY Date of this Agreement
i-2000 inc. Date of this Agreement
Finepoint Tech. Date of this Agreement
Excel Date of this Agreement
Cervalis Date of this Agreement
Conde Nast New York, NY Date of this Agreement
Hearst New York, NY Date of this Agreement
Gillette Company Boston, MA Date of this Agreement
Tellcar Innovations Connecticut *
Lombardo Group New York State *
BCN.net Massachusetts *
Idea Factory Rhode Island *
Computerhelp 911 New York State *
Whitmore Wireless New Jersey *
--------------------
* Entered into Reseller Agreement prior to the date of this Agreement, pursuant
to the Temporary Agreement.
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<PAGE>
Schedule 3.1
------------
LICENSE FEE PAYABLE BY DISTRIBUTOR TO ARTERA
None.
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<PAGE>
Schedule 3.2
------------
ROYALTY
The Royalty is payable in U.S.A. dollars. The monthly Royalty amounts, per End
User, are as follows:
1. Residential Subscribers. The monthly Royalty amount for each residential End
User is based on whether Artera or the Reseller associated with such End User
provides and operates the Data Center serving such End User and/or performs
billing with respect to such End User, as described in this Agreement, as
provided in the table below.
<TABLE>
<CAPTION>
------------------------------ ----------------------------- --------------------------- --------------------------
Reseller Billing Artera Billing Reseller Billing Artera Billing
Reseller Data Center Reseller Data Center Artera Data Center Artera Data Center
------------------------------ ----------------------------- --------------------------- --------------------------
<S> <C> <C> <C> <C>
$1.50 $2.10 $2.10 $2.70
------------------------------ ----------------------------- --------------------------- --------------------------
</TABLE>
2. Small Business and Government Entity Subscribers. The monthly Royalty amount
for each End User of a Small Business or Government Entity Subscriber is based
on the number of End Users within the applicable Subscriber and on whether
Artera or the Reseller associated with such End User provides and operates the
Data Center serving such End User as described in this Agreement, as provided in
the table below. Small Business or Government Entity Subscribers with under five
End Users shall be treated as if they had five End Users, with a Royalty that is
five times the amount in the table.
<TABLE>
<CAPTION>
-------------------------------- --------------------------------------- ------------------------------------------
No. of End Users Within Reseller Artera
Subscriber Data Center Data Center
-------------------------------- --------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C>
5 - 9 $2.15 $2.50
-------------------------------- --------------------------------------- ------------------------------------------
10 - 24 $2.03 $2.38
-------------------------------- --------------------------------------- ------------------------------------------
25 - 49 $1.90 $2.25
-------------------------------- --------------------------------------- ------------------------------------------
50 or above $1.65 $2.00
-------------------------------- --------------------------------------- ------------------------------------------
-------------------------------- ----------------------------------------------------------------------------------
Road Warrior + $2.50
-------------------------------- ----------------------------------------------------------------------------------
</TABLE>
"Road Warrior" refers to a version of the Service used with mobile computers
that at times may be connected to the Internet through a local area network
(LAN), and at other times may be connected to the Internet on a standalone
basis. The Royalty for a Road Warrior End User is the sum of (a) the applicable
ordinary Royalty amount described above plus (b) the applicable Road Warrior
amount described above.
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<PAGE>
Schedule 3.3
------------
BILLING, COLLECTIONS AND PAYMENTS
For each Reseller, Distributor shall designate whether such Reseller or Artera
shall perform Service Fee billing and related services, as follows:
1. Billing by Reseller:
(a) The Reseller shall bill the Subscriber each month. Upon receipt of the
Service Fee, the Reseller shall deduct and retain any amount due to it
under its Reseller Agreement. The Reseller shall pay the remainder of
such Service Fee to Distributor (directly or via additional levels of
Resellers). From such amount received, Distributor shall pay Artera
the Royalty. Payments by the Resellers to Distributor shall be made by
the 15th day of the calendar month, for Service Fees received by the
Reseller from Subscribers during the previous calendar month, by wire
transfer to an account specified by Distributor. Payments by
Distributor to Artera shall be made by the end of the calendar month,
for amounts received by Distributor from the Reseller between the 15th
day of the previous calendar month and the 15th day of the current
calendar month, by wire transfer to an account specified by Artera.
(b) To further assist Artera in calculating the Royalty and to enable
Resellers to activate and de-activate End Users, the Reseller shall
implement an electronic interface, as reasonably agreed upon by Artera
and the Reseller, between the Reseller's back office and the CRM
System. Such interface shall be via the Service's application program
interface (the "API") and shall pass to the CRM System, at a minimum,
the End User's (or prospective End User's) name, e-mail address and
unique identifier number from the Reseller, the Reseller's unique
identifier number from Artera and the Artera product identification
number. The Reseller shall also establish a non-public Web page and
provide its address and access to it to Artera, so that Artera may
report Service activations, de-activations and similar transactions
with Subscribers as described in the API documentation. Distributor
shall take reasonable steps to evaluate the creditworthiness of a
prospective Reseller prior to authorizing it to resell the Service.
2. Billing by Artera: Artera shall bill the Subscriber each month. Upon
receipt of the Service Fee, Artera shall deduct and retain the Royalty.
Artera shall pay the remainder of such Service Fee to Distributor.
Distributor shall, in timely fashion, pay the Resellers any amounts due to
them under their Reseller Agreements. Payments by Artera to Distributor
shall be made by the 15th day of the calendar month, for Service Fees
received by Artera from Subscribers during the previous calendar month, to
an account specified by Distributor.
3. Subscription Periods Greater Than One Month: Notwithstanding the foregoing,
Subscription periods may be greater than one month (e.g., annual
Subscriptions). In such event, (a) the Royalty shall be based on the number
of months within the Subscription period notwithstanding any discount given
by the Reseller to the Subscriber (unless
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<PAGE>
Artera agrees otherwise in writing in advance); and (b) the Royalty for the
entire Subscription period shall accrue to Artera in the first month of
such Subscription period.
4. Miscellaneous: Royalty payments shall be based on subscriptions to the
Service, irrespective of actual Service Fee collections and irrespective of
amounts paid by the Reseller to Distributor. For Small Business and
Government Entity Subscribers, the designation of who performs billing,
collections and payments as described above shall not affect the Royalty
amount. The one performing billing, collections and payments with respect
to a Subscriber shall (a) collect and pay to the appropriate governmental
authorities all sales, use, VAT, excise and similar taxes due with respect
to the Service Fees so processed and satisfy all reporting and filing
requirements associated therewith; and (b) keep records of all such
billing, collection, payment and tax transactions in sufficient detail to
demonstrate compliance with the procedures set forth herein. Artera and
Distributor may agree in writing from time to time, generally or in
connection with specified Resellers, to modify the procedures set forth
herein, consistent with the overall purposes and intent of this Agreement.
If a Reseller is performing billing, collections and payments, its Reseller
Agreement shall require such Reseller to take the actions described for it
herein.
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<PAGE>
Schedule 3.4
------------
RESELLER DATA CENTERS
1. Each Data Center shall be located at the applicable Reseller's premises
unless Artera agrees otherwise in writing in advance.
2. Artera shall remotely install its Data Center software on the Reseller's
Data Center server (the "Server") so that the software functions in
accordance with Artera's specifications. Artera shall maintain such
software on the Server and shall remotely install on the Server any
upgrades to such software as they become available.
3. The minimum technical specifications for each Data Center, based on an
assumption of 7,000 total End Users, are as follows:
o Intel Pentium III, 1.3GHz or better (single processor)
o 1GB RAM
o 40GB hard drive
o CD-ROM drive
o Windows 2000 Server or Windows 2000 Advanced Server
o Dual on-board NICs (10x100)
o 5Mb of bandwidth, burstable to 10Mb
For a Data Center serving 14,000 total End Users, the minimum technical
specifications are as above, but with one additional Intel Pentium III,
1.3GHz or better processor and 1GB of additional RAM. For Data Centers
serving other numbers of total End Users, the minimum technical
specifications shall be as proposed by Artera and agreed upon with the
applicable Reseller.
4. Irrespective of its configuration or the number of End Users served by it,
the Reseller's Data Center shall provide performance levels comparable to
Artera's own Data Centers and shall have the following additional
characteristics:
o Dedicated Server approved in advance by Artera
o Server must have unrestricted outbound access to the Internet
o End Users must have inbound access to the Server on port 8081
o Artera must have access to the Server via PC Anywhere or Terminal
Services
o Reseller must provide Artera with the public Internet Protocol (IP)
address of the Server so that Artera may provide the proper End User
software
o Artera must have a trial dial-up account from Reseller to confirm
proper configuration, access and quality of service performance of the
Server
5. If a Reseller's Data Center ceases to be operational, the End Users served
by such Data Center shall be automatically redirected to Artera's own Data
Center, by which such End Users shall be served until the Reseller's Data
Center is once again operational. The Reseller shall use best efforts to
return its Data Center to operational status. If this is not achieved
within 72 hours of the start of the outage and the outage was not caused by
18
<PAGE>
Artera's Data Center software, then, after the end of such 72 hours, for
each calendar day (or part thereof) that an End User accesses Artera's Data
Center, the Royalty payable by Distributor for such End User, for the
applicable month, shall be increased by $.10.
6. The Reseller Agreement of each Reseller providing and operating a Data
Center shall incorporate the specifications and procedures set forth
herein.
19
<PAGE>
Schedule 4.3
------------
DELIVERABLES
Within 30 days of the date of this Agreement, Artera will supply Distributor
with the following Deliverables:
1. Subscriber Software downloadable from the Internet.
2. Service documentation downloadable from the Internet.
3. Reproducible Subscriber Software installation CD, which includes
documentation.
4. Sales presentations and literature in electronic form.
5. Technical presentations in electronic form.
6. Password necessary for access to the CRM System.
20