VIATOR NETWORKS
VALUE ADDED RESELLER AGREEMENT
This agreement ("Agreement") is made between Viator Networks, Inc., a
corporation duly organized and existing under the laws of the State of Delaware,
("Viator Networks") and Videolocity, Inc., an organization having its principal
place of business at 1762A Prospector Avenue, Park City, UT 84060 ("VAR").
W I T N E S S E T H
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WHEREAS, Viator is in the business of providing the Egress(TM) product and
service suite as more particularly described in Attachment A (the "Product") to
the hospitality and multi-tenant unit markets for high-speed Internet
connectivity pursuant to this Agreement; and
WHEREAS, VAR desires to license the Product from Viator and sublicense the
Product in conjunction with VAR's own product, as more particularly described in
Attachment (the "Enhanced Product"), to Enduser(s) and Distributor(s), as these
terms are more fully defined in Article I, below, in accordance with the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration hereof and the mutual promises and covenants
herein set forth, and intending to be legally bound by this Agreement, the
parties do hereby agree as follows:
Article I - Definitions
1.1 Definitions. For purposes of this Agreement, the following definitions
will apply:
(a) "Product" shall mean Viator's hardware and software as more
particularly described in Attachment A.
(b) "Enhanced Product" shall mean the Product together with the
product(s) and/or service(s) of VAR as more particularly described
in Attachment A.
(c) "Enduser(s)" shall mean purchaser(s) of licenses from VAR or
Distributor(s) to use the Enhanced Product for their own use, not
with the intent for resale thereof by said Enduser(s).
(d) "Distributor(s)" shall mean a third party selected by VAR to
distribute the Enhanced Product to Enduser(s).
(e) "Effective Date" shall mean the latest date Viator or VAR signed
this Agreement.
(f) "Territory" shall have the meaning given to such term in Attachment
A.
(g) "Term" of this agreement shall be as stated in Article 17.1.
Article 2 - VAR Appointment
2.1 Appointments. Subject to the terms and conditions in this Agreement,
Viator Networks hereby appoints VAR as a value added reseller to
promote, market and sell the Products in the Territory during the Term.
2.2 Sales Efforts. During the Term, VAR shall use its commercially
reasonable efforts to promote, market and sell the Products in the
Territory during the Terms. Without the prior written consent of Viator
Networks, VAR shall not directly or indirectly (i) solicit sales of the
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Products outside of the Territory, or (ii) sell to any person which VAR
understands or reasonably expects will resell the Products.
2.3 No Limit on Price. Although Viator Networks may from time to time
publish suggested end-user list prices for the Products, VAR has the
unrestricted right to unilaterally determine the prices at which it
resells the Products which it purchases hereunder. No Viator
representative has the authority to require or suggest that VAR charge
a particular resale price for the Products which it purchases
hereunder.
2.4 Non-Exclusive Right. VAR's right to resell the Products shall be
non-exclusive and Viator shall continue to have the right to promote,
market and sell the Products in the Territory and elsewhere, and any
other products which are similar and/or competitive with the Products,
through any other means, including but not limited to directly, through
other resellers, distributors and/or through any agent or
representative.
2.5 Compliance with Authorization and Certification Requirements. VAR's
right to remain a value added reseller hereunder or to sell various
Products or Product lines shall be subject to VAR's continuing
compliance with the authorization and certification requirements set
forth in Attachment B, as amended from time to time by Viator on notice
to VAR. If VAR fails to maintain compliance with such requirements as
then in effect, then Viator may terminate this Agreement in accordance
with Article 17.3 or terminate VAR's right to sell certain Products, as
appropriate.
Article 3 - Terms of Purchase of Products by VAR
3.1 Terms and Conditions. All purchases of Products by VAR from Viator
during the term of this Agreement shall be subject to the terms and
conditions of this Agreement.
3.2 Prices. All prices are F.O.B. Viator's plant currently located at the
address listed for Viator at the beginning of this Agreement. The
purchase price to VAR for each of the Products ("Purchase Price") shall
be as set forth in the VAR Price List. The difference between VAR's
Purchase Price and VAR's selling price to its customers shall be VAR's
sole remuneration for sale of the Products. Viator has the right at any
time to revise the prices in the VAR Price List with thirty (30) days
advance written notice to VAR. Such revisions shall apply to all orders
received after the effective date of revision.
3.3 Price Protection. In the event of a price increase, Viator will honor
orders or portions thereof already accepted and acknowledged by Viator
at the prices in effect previous to the effective date of the price
increase and orders scheduled by Viator for delivery within thirty (30)
days after the effective date of the price increase. Orders scheduled
by Viator for delivery after (30) days from effective date of the price
increase shall automatically be adjusted by Viator. After the effective
date of the price increase, orders will be accepted at the increased
price.
In the event of a price reduction, unshipped orders already scheduled
by Viator for product affected by the price reduction shall be
automatically adjusted by Viator to reflect the price decrease. Viator
will provide VAR with written notice of any decrease no later than
fifteen (15) days after the effective date of such decrease. Product in
transit and product in VAR's inventory purchased not more than sixty
(60) days prior to the effective date of such price decrease shall be
subject to the price reduction; provided, however that : (A) VAR
applies in writing to Viator for the price reduction within sixty (60)
days after the effective date of the announced price reduction and
(B)VAR forwards an inventory report to Viator that indicates model and
quantity of inventory in stock. Viator reserves the right to verify the
inventory report and conduct and audit of VAR's inventory. Viator shall
issue a credit for the price reduction to VAR within thirty (30)days
after receipt and verification of VAR inventory report. The credit
shall be equal to the difference between the price at the time of the
sale of the Product to VAR and the new reduced price.
Viator shall have no obligations pursuant to this Article 3.3 unless
VAR has timely performed all of its obligations pursuant to Article
6.1(a) hereof during the previous six months.
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3.4 Taxes. VAR agrees to report and pay all taxes, customs, duties and
assessments imposed on VAR or Viator in connection with the
distribution and sale of Viator product hereunder including any sales,
use, excise, and other taxes and duties, except for taxes imposed on
Viator income. To the extent that Viator is required by status or
regulation to collect and report taxes, duties, customs, or any other
costs to various authorities (both foreign and domestic), such taxes,
duties, customs, or any other costs will be billed directly to VAR.
3.5 Order and Acceptance. All orders for Products submitted by VAR shall be
initiated by written purchase orders sent to Viator and requesting a
delivery date during the term of this Agreement; provided, however,
that an order may initially be placed orally if a confirmational
written purchase order is received by Viator within five (5) days after
said oral order. No order shall be binding upon Viator until accepted
by Viator in writing, or by shipping product in accordance with the
order. Professional Service orders are to be accompanied by a
non-refundable payment of 50% (fifty percent) of the cost of the
services to be provided Product orders should be accompanied by either
full payment, or a 25% (twenty five percent) non-refundable pre-payment
with the balance due at time of shipment. Viator will use reasonable
efforts to notify VAR of the acceptance of an order within five (5)
business days of its receipt of an order, or at Viator's sole
discretion, deliver the ordered products. Viator shall use its
reasonable best efforts to deliver Products at the times specified
either in its quotation or in its written acceptance of VAR's purchase
orders. However, Viator shall not be liable for any damages resulting
from its failure to meet such shipment dates, even if Viator has been
advised of the possibility of such damages. partial shipments may be
made upon written approval of VAR. No partial shipment of an order
shall constitute the acceptance of the entire order, absent the written
acceptance of such order.
3.6 Purchase Orders Terms. VAR's purchase orders submitted to Viator from
time with respect to Products to be purchased hereunder shall be
governed by the terms of this Agreement, and nothing contained in any
such purchase order shall in any way modify such terms of purchase or
add any additional terms or conditions.
3.7 Payment. For the initial order full payment of VAR's Purchase Price for
the Product (including any freight, taxes or other applicable costs
initially paid by Viator but to be borne by VAR) shall be due prior to
product shipment. Future payment terms and conditions will be
negotiated. Payment shall be made by wire transfer, check, or other
instrument approved by Viator, payable in U.S. Dollars. Any invoiced
amount not paid when due shall be subject to a service charge of one
and one-half percent (1.5%) per month and Viator, at its option, may
revoke any previously granted terms of credit. Except for credits
issued under Article 3.3 or 9, VAR agrees to no rights of set off for
amounts it owes for particular Products against amounts owed to it by
Viator. Viator may withhold or suspend its performance under this
Agreement in the event that VAR fails to make timely payments of
outstanding invoices. VAR shall pay all of Viator costs and expenses
(including reasonable attorneys' fees) to enforce and preserve Viator
rights under this Subsection 3.8.
3.8 Shipping. All Products delivered pursuant to the terms of this
Agreement shall be suitably packed for air freight shipment in Viator
standard shipping cartons, marked for shipment at VAR's address set
forth above, and delivered to VAR or its carrier agent F.O.B. Viator
manufacturing plant or warehouse, at which time title to such Products
and risk of loss shall pass to VAR. Unless otherwise instructed in
writing by VAR, Viator shall select the carrier. All freight,
insurance, and other shipping expenses, as well as any special packing
expense, for shipments to VAR shall be paid by VAR. All freight,
insurance, and other shipping expenses, as well as any other special
packing expenses for defective goods or those returned under warranty
shall be paid by Viator. VAR also agrees that no delivery pursuant to
this Agreement shall be construed as a single lot contract under the
Uniform Commercial Code. In addition, remedies provided under a single
lot contract shall not apply to any shipment under the agreement.
3.9 Product Acceptance. VAR shall be deemed to have accepted delivery of
Viator Products, unless rejected upon inspection at the time of
delivery. The reason for rejection must be submitted in writing to
Viator within thirty (30) business days from the date of delivery
(Rejection Period). VAR agrees that its remedies are limited to the
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remedies contained in the warranty provisions of this Agreement under
articles 8 (Warranty and Disclaimer), and 9 (Rejection and Warranty
Procedures).
3.10 Return of Products after Rejection Period. After the Rejection Period,
VAR may not return a Product to Viator for any reason without Viator's
prior written consent. For any Product for which Viator gives such
consent, Viator may charge VAR a restocking fee equal to ten percent
(10%) of VAR's Purchase Price for that Product and shall credit the
balance of the Purchase Price to VAR's account. VAR shall be
responsible for all shipping charges.
3.11 Product Changes. Viator shall have the right, in its absolute
discretion, without liability to VAR, to change the design or to
discontinue the manufacture or sale of any Product covered by this
Agreement. Viator shall attempt to notify VAR at least thirty (30) days
prior to the delivery of any Product which incorporates a change in
design that shall, in Viator's reasonable opinion, affect the
marketability of any Product in VAR's inventory. Viator shall also
endeavor to notify VAR at least thirty (30) days prior to the
discontinuance of manufacture of any Product. Viator, however, shall
not incur any liability to VAR for its failure to so notify VAR.
Article 4 - Grant and Acceptance of License
4.1 Grant of License. Subject to the provisions contained in this
Agreement, Viator hereby grants to VAR and VAR hereby accepts a
non-exclusive, non-transferable license:
(a) to use and copy the Product solely for purposes of demonstrating
the Product to potential Distributor(s) and Enduser(s), and
incorporating the Product without modification, enhancement, derivation
into the Enhanced Product; and
(b) to sublicense the Product, as incorporated in the Enhanced Product,
to Enduser(s), and Distributor(s) pursuant to Article 5 below.
4.2 Restrictions on VAR. VAR shall use the Product only for the purpose set
forth in Article 4.1 above. Without limiting the generality of the
foregoing, VAR expressly agrees that it shall not:
(a) permit others to disassemble, decompile or otherwise modify or
prepare derivative works of Product; or
(b) allow Enduser(s) to resell or lease the Product or a derivation of
the Product or to resell (part of the) Data or Services that are
derived from the Product; or
(c) use any Viator Products described in Attachment A, to create new
Enhanced Products, other products or derivations thereof, other than
those delineated explicitly in Attachment A, without the prior written
consent from Viator; or
(d) use Product or allow others to use Product in any manner that
infringes the intellectual property or other rights of Viator or
another party or non-party; or
(e) use Product in an on-line database system, without the prior
written consent of Viator; or
(f) export Product to any country in contravention of any law of the
United States or any other country, including the Export Administration
Act and regulations relating thereto.
(g) disassemble, decompile or otherwise modify Product in anyway,
without the prior written consent from Viator.
4.3 Obligations of VAR. As a condition to Viator's obligations under this
Agreement, VAR shall at all times:
(a) promptly notify Viator of any change in ownership of VAR, or any
sale or transfer of any substantial portion of its property or assets;
and
(b) represent, display and demonstrate the Product, as incorporated in
the Enhanced Product, prominently and fairly at all times in comparison
with other competitive products; and
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(c)
display the Viator logo and copyright notice pursuant to Article 15.2
on all collateral, advertisements, and product packaging of the
Enhanced Product where the Product is included as a part of the
Enhanced Product. The Viator logo will be provided to VAR by Viator
within ten (10) days upon request by VAR in a mutually agreed upon
industry standard format; and
(d) protect the product in the Enhanced Product in a technical sense,
in order to avoid the possibility of decompiling and retrieving the
Product by third parties;
(e) refrain from making any knowingly false or misleading statements,
claims or representatiions with respect to Viator or the Product; and
(f) conduct its business in such a way so as not to damage the valuable
reputation of Viator; and
4.4 Obligations of Viator. As a condition of VAR's obligations under this
Agreement, Viator shall at all times:
(a) reasonably devote its best efforts, to develop and maintain the
Product and the accuracy and desirability of its contents and features;
and
(b) conduct its business in such a way so as not to damage the valuable
reputation of VAR; and
(c) refrain from making any knowingly false or misleading claims or
representations with respect to the Product, the VAR or the Enhanced
Product.
Article 5 - Sublicense to Enduser(s)
5.1 Sublicenses by VAR. Sublicenses to Enduser(s) granted by VAR pursuant
to Article 4.1(b), herein above, shall include the Restrictions on
License as set forth in Article 4.2(a) and (b) of this Agreement.
Sublicenses to Distributor(s), granted under Article 4.1 (b), hereof,
requires compliance by said Distributor of provisions entitled
"Restrictions on VAR," Article 4.2, and "Obligations of VAR," Article
4.3, hereof. Distributor may not make any changes in the Product except
as is mutually agreed upon in writing by both Viator and VAR. VAR shall
and hereby agrees to require Enduser(s) and Distributor(s) to comply
with the terms of this paragraph, Article 5.1.
5.2 Enforcement of Restrictions. VAR shall aggressively enforce the
restrictions contained in this Agreement at VAR's sole expense and
promptly notify Viator when VAR acquires actual knowledge of any
violations of such restrictions by Enduser(s) or Distributor(s). If
Viator wishes to commence proceedings against the infringer of Viator's
(property) rights, VAR shall undertake its best efforts to assist
Viator.
Article 6 - VAR's Obligations
6.1 VAR shall:
(a) Furnish Viator, upon request by Viator from time to time, a rolling
three (3) month forecast of VAR's projected requirements for each
customer by month in electronic (machine readable) format. The format
and content of such forecast will be as set forth in Attachment C
hereto, as such schedule may be modified from time to time by Viator.
(b) Not remove, obscure or modify any label or other indication of
copyright or other intellectual property rights on the Products.
(c) Agree to the terms and conditions of any software license or
product warranty terms enclosed with the Products.
(d) Not sell Products other than in original, unmodified, unused
condition, except that the unmodified Products may be bundled or
packaged with other goods to comprise a system.
6.2 Software. VAR acknowledges that all software Products or Products,
which include software, are proprietary to Viator or its licensors and
are subject to copyrights and trade secrets owned by Viator or its
licensors. All references in this Agreement to "purchases," "sales," or
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words of similar import, of software Products or Products which include
software signify only the acquisition of a license for VAR to transfer
such software to its end-users in accordance with the terms of this
Agreement.
6.3 Suitability. VAR hereby understands that it is solely responsible for
determining the suitability of Products for the purpose for which
Products are purchased or sold by VAR.
6.4 Hardware. VAR acknowledges it is solely responsible for ensuring that
the network in which the Products are installed is in good working
order and that any third-party hardware connected to the Products have
passed Viator interoperability tests and are properly installed and
configured according to the manufacturer's specifications and
instructions.
6.5 Network Reliability. VAR acknowledges that it is solely responsible for
all technical issues related to third-party hardware (including
property management systems and network switches, DSL concentrators and
the like), network design and configuration, and for the reliability
of the network in which the Products are installed and it is solely
responsible for any issues or problems that may adversely affect the
performance or features of the Products. Viator may, at its sole
discretion, assist in the determination of the problem.
6.6 Technical Support. Provision of end-user technical support is the sole
responsibility of the VAR. VAR shall provide 24-hour technical support
to end-users through its own employees, under contract with a
professional technical support or help desk provider, or under
contract through Viator. At no time shall any end-user be without
access to technical support. Technical support fees for service
contracted through Viator are indicated on Attachment A.
6.7 Limitation on VAR's Rights to the Products. VAR shall have no access
to, or rights in, the source codes of any software included in the
Products. VAR shall have no right to copy, modify or remanufacture any
Product or part thereof, nor reproduce any written material supplied by
Viator without the explicit written consent of Viator.
Article 7 - Viator Obligations
7.1 Viator shall:
(a) Provide VAR with sales support through its national and field sales
offices and affiliated companies;
(b) Allow VAR to participate in such cooperative marketing programs and
other sales incentive programs as Viator may make generally available
to similarly situated resellers of Products; provided, however, that
Viator reserves the right to alter or eliminate any such cooperative
marketing programs or other sales incentive programs at any time; and,
(c) Furnish VAR with a reasonable quantity of its standard sales
promotion literature, such as brochures and specification sheets;
provided that Viator reserves the right to charge VAR if it requests
large quantities of such materials.
7.2 Services by Viator. Additional customer service and technical
support is available by phone in the United States at (877) 468-3546,
or via email at support@viatornetworks.com. Extended warranty, contract
service, repair and other services are available for purchase at Viator
published standard rates.
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Article 8 - Warranties and Disclaimer
(a) Limited Warranty. Viator warrants that it owns or has the full
right and authority to license the Product and agrees that the Product
is delivered on an "as is" basis and should not be considered as error
free. VAR will determine within sixty (60) days of initial delivery of
the Product and thirty (30) days thereafter following delivery of any
updates, whether the information carrier on which the Product or update
is delivered contains major defects. Viator's sole liability and VAR's
sole remedy with respect to defective Products is limited to the
replacement or repair of the defective information carrier, provided
that:
(i) End-user complies with the rejection and warranty procedures
herein and returns the Viator Product that the end-user considers
defective for examination and testing.
(ii) Viator shall not be liable under this warranty if testing and
examination by Viator discloses that the Viator Product has been
modified or altered in any manner after it was shipped by Viator.
(iii) Viator shall not be liable under this warranty if testing and
examination by Viator discloses that the alleged defect in the
Viator Product does not exist or was caused by end-user or any
third person's misuse, neglect, improper installation or testing,
unauthorized attempts to repair or any other cause beyond the range
of intended user, or by accident, fire or other hazard.
(iv) Viator shall not be liable under any warranty under this
Agreement with respect to any Viator Product that is not returned
in its original shipping container or a functionally equivalent
container.
(a) Viator shall so advise VAR and dispose of such Viator
Product in accordance with VAR's instructions on behalf of
end-user and at VAR's cost; and
(b) AR shall reimburse Viator for its expense in testing and
examining such Viator Product calculated at Viator standard
rates.
(vi) Disclaimer of Warranties. VIATOR DISCLAIMS ANY AND ALL OTHER
WARRANTIES EXCEPT THOSE EXPRESSLY STATED IN THIS ARTICLE 8, EXPRESS
OR IMPLIED REGARDING THE PRODUCT INCLUDING, BUT NOT LIMITED TO, ALL
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
8.2 By VAR:
(a) Indemnification. VAR agrees to indemnify Viator and hold Viator
harmless from and against any and all claims, losses, liabilities
damages, expenses and costs (including reasonable attorney fees and
court costs) which result from any claims based on misrepresentations
made by VAR regarding the Product or the Enhanced Product.
Additionally, VAR agrees to indemnify Viator and hold Viator harmless
from any claim that the Product or the Enhanced Product infringes any
patent, copyright, trademark or other proprietary right of any third
party or misappropriates any trade secret of a third party that is
based on VAR's misrepresentation of the Product or Enhanced Product.
Further, VAR shall indemnify and hold harmless Viator from and against
any loss, liability, cost or expense (including reasonable attorney
fees and courts costs), which result from any claim by any person based
upon (i) any willful misconduct or negligence of VAR, its employees or
agents, (ii) the breach by VAR of any of its obligations under this
Agreement or the Sublicense Agreement, or (iii) any defect in the
Enhanced Product.
Article 9 - Rejection and Warranty Procedures
9.1
In the event of rejection of Viator Product within the Rejection Period
or a Viator Product fails to perform as warranted within the Warranty
Period, VAR or end-user, as relevant, will give notice to Viator or
VAR, respectively, within the relevant limitation period, which notice
will request a Return Material Authorization ("RMA") number. Viator
will provide the RMA number to VAR within five (5) days after the
giving of notice and the request. Within thirty (30) days after its
receipt of the RMA number, VAR or end-user will return to Viator or its
designee the rejected or defective Viator Product, freight or postage
prepaid in the original shipping carton or a functionally equivalent
container. Viator reserves the right to refuse to accept any rejected
or defective Viator Product not bearing an RMA number on the outside of
the carton and/or documentation accompanying the shipment such as
packing slips. If the Viator Product is determined to be defective in
accordance with Article 8 (Warranty and Disclaimer), Viator will, at
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its sole option and expense, either repair, replace the Viator Product
and ship it in accordance with VAR's instruction, to VAR or end-user,
or credit to VAR an amount not to exceed the VAR's purchase price of
each good found to be defective. Viator will use all reasonable efforts
to ship the repaired or replaced Viator Product within thirty (30) days
of its receipt of such Viator Product.
Article 10 - Intellectual Property Infringement
10.1 Intellectual Property Infringement. Viator Networks will defend, at its
own expense, any claim, suit, or proceeding brought against VAR to the
extent it was based upon a claim that any product under normal use sold
pursuant to this Agreement infringes upon any presently issued U.S.
patent or any copyright, or misappropriates any trade secret, of any
third party. VAR agrees that it shall promptly notify Viator Networks
in writing of any such claim or action and give Viator Networks full
information and assistance in connection therewith. Viator networks
shall have the sole right to control the defense of any such claim or
action and the sole right to settle or compromise any such claim or
action. If VAR complies with the provisions hereof, Viator Networks
will pay all damages, costs and expenses finally awarded to third
parties against VAR in such action. If a Product is, or in Viator
Networks opinion might be, held to infringe as set forth above Viator
Networks may, at its option replace or modify such Product so as to
avoid infringement, or procure the right for VAR to continue the use
and resale of such Product. If neither of such alternatives is, in
Viator Networks opinion, commercially reasonable, the infringing
Product shall be returned to Viator Networks and Viator Networks sole
liability, in addition to its obligation to reimburse awarded damages,
costs and expenses as set forth above, shall be to refund the amounts
paid for such Products less depreciation measured equally over a sixty
(60) month period from the date of purchase by VAR.
10.2 Limitations. Viator will have no liability for any claim of
infringement arising as a result of VAR's use or sale of a Product in
combination with any items not supplied by Viator Networks, Inc., any
modification of a Product by VAR or third parties, or the failure to
use the latest version of any software provided for such Product if
infringement would have been avoided with such use.
10.3 Entire Liability. THE FOREGOING CONSTITUTES VIATOR'S SOLE AND EXCLUSIVE
LIABILITY FOR INTELLECTUAL PROPERTY INFRINGEMENT.
Article 11 - Ownership, Confidentiality
11.1 Ownership. VAR acknowledges that Viator is the owner of all rights,
titles and interests including, without limitation, copyrights and
other intellectual property rights in and to the Product. VAR
acknowledges that the Product is a valuable asset of Viator, and VAR
agrees to abide by the restrictions set forth in this Agreement and by
applicable Copyright law, in any and all uses of the Product by VAR.
11.2 Terms of Agreement. Viator and VAR and their respective employees and
agents shall not disclose the terms and conditions of this agreement to
any third party unless required to do so by a court of competent
jurisdiction, and only after prior written notice to the other party.
11.3 Confidential and Proprietary Information. Viator, VAR and their
respective employees and agents shall hold in confidence all
confidential and proprietary information of the other which is
disclosed to each party in connection with this Agreement and the
transactions contemplated hereby, and which is so designated in writing
by the disclosing party including, without limitation, information
concerning Enduser(s) and prospective Enduser(s), and financial and
technical information. The provisions of this Article 11.3 shall
survive the termination of this Agreement. Each party shall use
reasonable diligence, and in no event less than the degree of care
which such party uses in respect to its own confidential and
proprietary information or other information of like nature, to prevent
the unauthorized disclosure or reproduction of such information.
Confidential and proprietary information shall exclude:
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(a) information in the public domain; and
(b) information known to the recipient party as of the Effective
Date, unless the recipient party agreed to keep such information in
confidence at the time of its receipt; and
(c) information hereafter obtained by the recipient party from a
source not under an obligation of confidentiality to the other
party.
Article 12 - Support and Maintenance
12.1 Support and Maintenance. Viator agrees to provide the following support
and maintenance of its Product during the term of this Agreement.
However, if VAR is in default or has otherwise breached this Agreement,
Viator shall have no obligation for Support and Maintenance, hereunder.
VAR shall promptly give Viator written notice and any documentation of
discovered defects and, thereafter, shall provide such additional
information as Viator may reasonably request. Viator shall:
(a) use its best efforts to promptly correct major defects that are
discovered by VAR in the Product, provided that Viator can replicate
the alleged defect; and
(b) correct minor or ordinary defects by the next general commercial
release of the Product.
Viator's obligations to provide corrections to the Product shall
immediately terminate in the event that VAR materially misuses the
Product and fails to correct or undertake a plan to correct within ten
(10) days after written notice specifying the misuse.
Article 13 - Limitations on Liability and Remedies
13.1 GENERAL LIMITATION OF LIABILITY CONCERNING PRODUCT. VIATOR, AND ANY
COMPANY AFFILIATED WITH VIATOR, OR ANY OFFICER DIRECTOR EMPLOYEE,
AGENT, SUBCONTRACTOR, SUCCESSOR OR ASSIGN OF VIATOR OR ANY SUCH COMPANY
SHALL NOT BE LIABLE TO VAR FOR ANY LOSS, INJURY, CLAIM, LIABILITY OR
DAMAGE RESULTING FROM OR CONNECTED WITH (A) INACCURACY OF THE PRODUCT,
(B) ANY ERRORS OR OMISSIONS IN PRODUCT, OR (C) THE USE OF PRODUCT, EVEN
WHERE THE CLAIM, LIABILITY OR DAMAGE RESULTING FROM ANY OF THE
FOREGOING IS CAUSED IN WHOLE OR IN PART BY VIATOR AND REGARDLESS OF
WHETHER SUCH CLAIM OR LIABILITY ARISES IN CONTRACT (INCLUDING BREACH OF
WARRANTY), TORT (INCLUDING STRICT LIABILITY), INTELLECTUAL PROPERTY
INFRINGEMENT, INDEMNITY OR OTHERWISE.
13.2 DOLLAR LIMITATION OF LIABILITY OF VIATOR. IF THE LIMITATIONS OF
LIABILITY SET FORTH IN ARTICLE 8.1 OR ELSEWHERE IN THIS AGREEMENT OR
ANY LIMITED REMEDY ARE HELD TO BE UNENFORCEABLE, OR IN THE ABSENCE OF A
LIMITED REMEDY OR LIMITATION OF LIABILITY, THE LIABILITY OF VIATOR AND
ANY COMPANY AFFILIATED WITH VIATOR, OR ANY OFFICER, DIRECTOR, EMPLOYEE,
AGENT, SUBCONTRACTOR, SUCCESSOR OR ASSIGN OF VIATOR OR ANY SUCH
COMPANY, TO VAR FOR DAMAGES OR ALLEGED DAMAGES, WHETHER IN CONTRACT
(INCLUDING BREACH OF WARRANTY), TORT (INCLUDING STRICT LIABILITY),
INTELLECTUAL PROPERTY INFRINGEMENT, INDEMNITY OR OTHERWISE, RELATED TO
THIS AGREEMENT SHALL NOT EXCEED THE AMOUNTS RECEIVED BY VIATOR FROM VAR
DURING THE TWELVE MONTHS PRECEDING THE ACTS GIVING RISE TO THE DAMAGES.
13.3 CONSEQUENTIAL AND PUNITIVE DAMAGE LIMITATION. IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER FOR ANY EXEMPLARY, PUNITIVE, INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL (INCLUDING LOST PROFITS) DAMAGES
ARISING FROM OR IN ANY WAY CONNECTED WITH ITS PERFORMANCE OR FAILURE TO
PERFORM UNDER THIS AGREEMENT, WHETHER IN CONTRACT (INCLUDING BREACH OF
WARRANTY), TORT (INCLUDING STRICT LIABILITY AND NEGLIGENCE),
INTELLECTUAL PROPERTY INFRINGEMENT, INDEMNITY OR OTHERWISE, EVEN IF
SUCH PARTY HAS KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES.
9
13.4 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, other than any controversy or
claim relating to either party's confidentiality obligations under this
Agreement, shall be settled by binding arbitration conducted before a
single arbitrator, pursuant to the rules of the American Arbitration
Association (AAA), who is knowledgeable in the field of law as it
pertains to computer software and databases. If the parties are unable
to agree to one arbitrator, such arbitrator shall be selected by the
AAA. the site of any such arbitration will be Alexandria, Virginia,
U.S.A. any judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Each party will bear
its own costs and expenses, including fees and expenses of counsel,
associated with the arbitration. The arbitrator shall not be entitled
to award punitive damages to either Party.
13.5 SOLE AND EXCLUSIVE REMEDIES. THE LIMITED REMEDIES OF THE PARTIES SET
FORTH IN THIS AGREEMENT ARE THE SOLE AND EXCLUSIVE REMEDIES OF A PARTY
AGAINST THE OTHER PARTY.
Article 14 - Import and Export Controls
15.1 Regulations. VAR understands and acknowledges that Viator is subject to
regulation by agencies of the United States government including,
without limitation the U.S. Department of Commerce, which agency
prohibits export or diversion of certain products and technology to
certain countries. Any and all obligations of Viator to provide Viator
Products as well as any technical assistance will be subject in all
respects to such United States laws and regulations as from time to
time govern the delivery and license of technology and products abroad
by persons subject to the jurisdiction of the United States including,
without limitation, the Export Administration Act of 1979, as amended,
any successor legislation and the Export Administration Regulations
issued by the Department of Commerce, Bureau of Export Administration.
VAR agrees to cooperate with Viator in order to obtain export licenses
or exemptions therefrom by, among other things, providing required
documentation. VAR warrants that it will comply with the Export
Administration Regulations and other United States laws and regulations
governing exports in effect from time to time.
Article 15 - Trademarks and Logo Usage
15.1 Limited Trademark License. Viator grants to VAR a non-exclusive,
limited license to use, during the term of this Agreement, Viator's
name, logo and other trademarks used by Viator in the Territory from
time to time with respect to the Products (the "Trademarks") for proper
purposes in connection with the promotion and sale of the Products.
15.2 VAR's Use. VAR's use of the Trademarks shall be in accordance with
applicable trademark law and Viator's policies regarding advertising
and trademark usage as established and amended from time to time. VAR
shall include all applicable Viator Trademarks in any literature,
promotion or advertising, which it produces or distributes concerning
the Products. VAR will not use any such Trademarks other than with
respect to the direct promotion of the Products. VAR may add
identification marks (e.g. serial or part numbers) for its own internal
inventory records.
15.3 Viator Designations. VAR will not remove, deface or alter any Viator
trademarks, model numbers or other designations affixed to the Products
by Viator. VAR will not alter any other trademarks, trade names, model
designations or nameplates to the Products.
15.4 Ownership of Trademarks. VAR agrees that the Trademarks are and will
remain the sole property of Viator and agrees not to do anything
inconsistent with that ownership or to contest ownership of such
Trademarks.
10
VAR agrees to always identify the Trademarks as being the property of
Viator. VAR also agrees that all use of the Trademarks by VAR will
inure to the benefit of, and be on behalf of, Viator.
15.5 Trademark Quality Standards. VAR agrees that any system or service sold
by VAR which contains the Products and displays the Trademarks must
conform to Viator's quality standards for the use of its Trademarks,
and VAR agrees to cooperate with Viator in monitoring the nature and
quality of such systems and services for purposes of VAR's use of such
Trademarks.
Article 16 - Fees: Payment and Collection
16.1 License/Royalty Fees. In consideration for the license granted above,
VAR shall pay Viator the fees specified in Attachment A.
16.2 License/Royalty Fees Report: Payment of Fees. VAR shall deliver to
Viator, within thirty calendar (30) days after the end of each quarter,
a report in the form of Attachment C, hereto, providing certain
information, as requested by Viator, regarding Enhanced Product sales
to include any and all (other) information necessary for the exact
determination of amounts owed to Viator by VAR pursuant to Article 16.1
above, and identification of any Product delivered in any third party
proprietary format. Together with such report, VAR shall remit all
amounts due. All information supplied to Viator under this Agreement
will be held in strict confidence by Viator.
16.3 Late Payment Fees. Any unpaid amounts due Viator by VAR, when due under
Article 16.2 herein, shall be subject to a late payment fee calculated
from the date due at the rate of one and one-half percent (1.5%) per
month (18% per annum) or the highest rate allowable by applicable, law,
whichever rate is less. Said late payment fee shall accrue daily and be
compounded annually, until paid in full.
16.4 Impact on Fees Due Viator. Failure of VAR to address issues related to
Section 6.2 through 6.6 shall have no bearing on any fees due Viator
under the terms of this agreement.
Article 17 - Term, Termination, Expiration and effect Thereof
17.1 Term. This Agreement shall become effective on the date executed by
both parties ("Effective Date") and shall remain in full force and
effect until terminated as set forth in this Agreement. The term of
this Agreement is more particularly set forth in Attachment D.
17.2 Termination Without Cause. Either party shall have the right to
terminate this Agreement with 90 days written notice to the other
party.
17.3 Termination For Cause. This Agreement may be terminated forthwith by
the non-offending party in the event that:
(a) except as provided in Article 17.30(b) below, Viator or VAR commits
a material breach of any material obligation hereunder which is not
remedied to the reasonable satisfaction of the other party within
thirty (30) days after receipt of written notice thereof from the
non-breaching party specifying such breach; or
(b) either party engages in a course of conduct that has injured or is
likely in the opinion of the other party to injure the reputation of
the other party, the Product or the Enhanced Product as the case may be
and the offending party does not discontinue said conduct within ten
(10) days after receipt of written notice thereof; or
(c) VAR assigns this Agreement or any of its rights or obligations
hereunder, including, but not limited to, a transfer of a majority of
the stock or assets of VAR without the prior written consent of Viator;
or
(d) either party ceases to function as a legitimate going concern or to
conduct its operations in the normal course of business; or
11
(e) receivership, bankruptcy or insolvency proceedings are commenced by
or against either of the parties hereto, or an assignment for the
benefit of creditors occurs, or upon the voluntary winding up or
liquidation of its business by either of the parties hereto, whether or
not with the aid and assistance of any court.
17.4 Obligations of VAR upon Termination or Expiration. Upon termination or
expiration of this Agreement under this Article 17, VAR shall:
(a) return to Viator all copies of the Product in its possession or
destroy all such copies, at Viator's discretion; and
(b) pay to Viator all fees due and owing under this Agreement; and
(c) furnish to Viator the names and addresses of all Enduser(s) and
Distributor(s); and
(d) immediately discontinue all use and sublicensing of the Product and
immediately discontinue the] producing, marketing and selling of the
Enhanced product(s) containing the Product; and
(e) immediately refrain from any use of the (trade)names and
(trade)marks of Viator;
(f) provide an affidavit signed by an officer, or other authorized
individual, attesting to the performance of items 17.4(a)-(e) and
acknowledging the continuing obligations of confidentially under
Article 11.
17.5 Upon early termination of this agreement, all amounts owed by VAR to
Viator become immediately due and payable and VAR shall arrange
immediate payment thereof on the day of termination. If termination is
due to a breach of VAR or the termination is for any reason
attributable to VAR, all agreed annual license fees for the full term
of the contract becomes immediately due and payable and VAR shall
arrange immediate payment thereof on the day of termination.
17.6 Enduser's Rights upon Termination. Unless (early) termination or
expiration of the Agreement is caused by VAR (for instance due to
breach of contract by VAR), Viator will, in those situations where
Endusers have entered into a valid maintenance agreement with respect
to receiving updates of the product, continue to provide the available
updates up to a maximum period of two (2) years after the date of
termination or expiration, for the sole purpose of providing these
updates to these Endusers. VAR agrees and guarantees that VAR will not
use the updates outside the scope of this provision. All terms and
conditions with respect to the rights into the updates, the limited
warranties and liabilities and all other applicable terms and
conditions will remain in force between Viator and VAR with respect to
providing these updates.
Article 18 - Miscellaneous Provisions
18.1 Applicable Law. This agreement will be governed by and construed in
accordance with the laws of the Commonwealth of Virginia and the United
States of America as applicable to agreements made and wholly performed
within the Commonwealth of Virginia regardless of the place, time, or
sequence of its execution. The parties agree that the laws of the
Commonwealth of Virginia will apply despite any choice of law statute,
rule, or precedent that would apply the law of any other jurisdiction.
Both parties consent to the jurisdiction of such courts and agree that
process may be served in the manner provided herein for giving notice
or otherwise as allowed by state or federal law. In the event a claim
or cause of action arises under the exclusive jurisdiction of the
Federal Court that exercises jurisdiction over claims arising in
Virginia, that court shall have jurisdiction. Both parties agree that
venue shall be proper in said Federal Court.
18.2 Equitable Relief. Each party agrees that any breach of this Agreement
by the other would cause irreparable damage. In the event of such
breach, in addition to any and all remedies at law, the damaged party
shall have the right to an injunction, specific performance or other
equitable relief to prevent the continuous violation of terms
contained herein.
18.3 Sales and Use Taxes. VAR shall be responsible for any sale sand use
taxes arising from the transactions contemplated by this Agreement.
12
18.4 Employees. Neither VAR nor Viator shall hire nor seek to engage the
services of, nor offer to pay commission, compensation or any other
form of incentives to, the employees of the other for any purpose
whatsoever, without the express written consent of such other party.
This provision shall expire six (6) months after the termination of
this Agreement.
18.5 Ownership; Rights Reserved. title and all ownership, proprietary and
intellectual property rights to the Product, including, but not limited
to, all trade secrets, copyrights, and patents, and all derivatives
thereof, shall remain with Viator. Any right or license not expressly
granted to VAR by Viator under this Agreement is expressly reserved.
18.6 Future Cooperation. Viator and VAR agree, from time to time at the
request of the other party to discuss in good faith with the other
party proposed modifications and enhancements of the Product and the
Enhanced Product, and proposals for other services, if any, which may
be marketed by VAR on behalf of Viator. The parties further agree to
make available such management and support personnel as may be
reasonably necessary for the good faith evaluation and discussion of
such proposals.
18.7 Relationship of the Parties. This Agreement does not constitute a
partnership, joint venture or employment contract and nothing herein
contained is intended to constitute, nor shall it be deemed to
constitute, either party as an agent, employee, partner, or joint
venturer of the other. Neither party's employees shall, under any
circumstances, be deemed to be the employee of the other party for any
purpose. Except as expressly provided in this Agreement, neither party
shall have any power or authority to act in the name or on behalf of
the other party except with the express prior written consent of such
other party.
18.8 Consents. Any consent required under this Agreement shall not be
unreasonably withheld or delayed.
18.9 Waivers. No failure or delay by either party in enforcing any right or
remedy under this Agreement shall be construed as a waiver of any
future or other exercise of such right or remedy, or of any other right
or remedy by such party.
18.10 Entire Agreement. This Agreement, including all Attachments herein,
constitutes the sole and entire agreement between the parties
concerning the matter set forth herein and supersedes and cancels in
their entirety any previous agreements, understandings, negotiations,
arrangements both oral or in writing between the parties hereto. Except
as otherwise expressly provided herein, any amendment to this Agreement
must be in writing and signed by an authorized representative of each
party.
18.11 Successors and Assigns. The Agreement shall be binding upon the parties
hereto and their respective successors and assigns, and shall not be
construed to confer any right, interest or benefit in favor of any
other person. Notwithstanding the foregoing, VAR may not assign or
transfer its rights and interests under this Agreement, in whole or in
part, without Viator's prior written consent.
18.12 Captions and Headings. Captions and headings contained in this
Agreement are intended only for convenient reference, and in no way
define or limit the scope or intent of this Agreement or any provisions
hereof.
18.13 Counterparts. This Agreement may be executed in any number of duplicate
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
18.14 Severability. If any provision of this Agreement is adjudged to be
invalid, void or unenforceable, the parties agree the validity of all
remaining provision of this Agreement shall not be affected thereby and
that this Agreement shall otherwise remain valid and enforceable.
18.15 Further Action. Each party hereto agrees to perform all further acts
and to execute, acknowledge, and deliver any documents, which may be
reasonable, necessary, appropriate, or desirable to carry out the
provisions of this Agreement. Each party undertakes to keep the other
party promptly informed of anything that may be reasonably deemed to be
of material relevance to the other party in the framework of the
Agreement.
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18.16 Notices. All notices authorized or required under this Agreement shall
be in writing and shall be sent by registered or certified mail, fax,
postage prepaid, or return receipt requested to the parties at their
respective addresses set forth below or to such other address as either
party may from time to time specify by notice to the other given as
provided in this Article. All notices shall be deemed given on the
third business day following deposit by certified or registered mail.
Viator Networks, Inc.
2390 East Camelback Road, Suite 250
Phoenix, Arizona 85016
Videolocity, Inc.
Address:
City, State, ZIP:
Authorized Representative:
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument by their duly authorized officers as of the date below.
Viator Networks, Inc. VAR:
/s/Rodney J. Puleo
-----------------------------
Name: Rodney J. Puleo Name: Martin Senn
Title: COO Title: COO
Date: 8/16/01 Date: 8/15/01
14
ATTACHMENT A
GENERAL PRICING SCHEDULE
For the purposes of this contract, the following outlines pricing for hardware
and server software, ongoing technical and software support, portal, training
fees, and other miscellaneous items. Viator retains all rights to modify all
pricing as contained in this AGreement. Pricing for items not contained or
described herein shall be negotiated by Viator and VAR.
1. Preferred VAR Status
--------------------
VAR shall have preferred VAR status and shall be among the first to receive new
product offerings, including but not limited to beta hardware and software,
during the life of this agreement.
2. General Development Fees
------------------------
All customized software development fees are based upon the level of effort
required to complete a development project. These fees may vary or be waived at
Viator's sole discretion.
(a) Hourly customized software development $125 (discounted from $200)
(b) Hourly Server feature development $150 (discounted from $250)
(c) Custom hardware certification $10,000.
3. VAR Discount Sales Quantities and Associated License Fees Paid by VAR
---------------------------------------------------------------------
LICENSE FEES: Egress(TM) Server 3.5X
1-50 $3,250
every 11th license (e.g., 22, 32, etc.) $2,500
AVERAGE PRICE FOR 50 $3,190
51> $3,000
every 10th license, (e.g., 61, 71, etc.) $1,750
AVERAGE PRICE FOR 100 $2,865
Egress(TM) Port Pricing:
Egress(TM) 1 Port $65.00
Egress(TM) 2 Port $75.00
Confidential
Page i
4. Training Fees Paid by VAR
-------------------------
End User Staff VAR Technical Staff
Service Initial Follow-up Initial Follow-up
- ------------------------------------------------------------------------------------------------------------------
Instructor Fee $2,500 per day $2,000 per session $2,000 per day $1,500 per session
Materials $150/student $150/student Included Included
Class size limit 10 per session 10 per session 10 per session 10 per session
Expenses Actual Actual Actual Actual
Training Space Provided by property Provided by property On-site On-site
Lead time 30 days 21 days 30 days 30 days
- ------------------------------------------------------------------------------------------------------------------
Special training fees can be negotiated outside of these parameters.
5. Toll-free Technical Support Fees
--------------------------------
Viator-provided technical support is optional in cases where VAR provides such
services to the end-user. In cases where VAR does not provide direct technical
support to the end-user, the following table sets the fees VAR is required to
pay Viator to provide front-line technical support to the end-user. At no time
shall the end-user be without access to technical support.
Installed Property Base Per-Property Fee
- ----------------------- ----------------
1-20 $150/month
20-99 $110/month
100 or more $95/month
6. Collateral and other Printed Materials
--------------------------------------
Viator agrees to license marketing and technical support materials, including
but not limited to promotional tent cards, instruction sheets and placards,
promotional mailing post cards, product information sheets to VAR for no charge.
If VAR decides to customize these materials, orders must be placed through
Viator and must conform to guidelines in Article 15 above. VAR agrees to
reimburse Viator for actual production and printing costs.
Page ii
Confidential
ATTACHMENT B
VALUE ADDED RESELLER AGREEMENT
Authorization and Certification Requirements
Authorization
VAR agrees to sell an annualized sales volume of TO BE DETERMINED WITHIN 60
DAYS of SIGNING THIS VAR AGREEMENT (the "Minimum Sales Requirement") of Products
purchased under this Agreement. The Minimum Sales Requirement is based on the
total number of product paid for by VAR or Viator's authorized VAR of Products
for the Territory, to Viator Networks, Inc. for Products purchased under this
Agreement in the relevant year, less discounts, returns and other adjustments.
If VAR fails to maintain the Minimum Sales Requirement, VAR may be terminated
for breach of this Agreement. The Minimum Sales Requirement shall be prorated
for the first year of this Agreement based on the number of months (or portions
thereof) remaining in such year, if the Term commences after the beginning of
any calendar year.
Viator Networks also prefers that VAR have access to e-mail at its corporate and
branch levels. However, Viator Networks will not terminate a VAR for breach of
this Agreement if it fails to have or maintain such e-mail capabilities.
Certification
VAR must comply with Viator Network's training programs, post sales service and
support programs and procedures, including warranty support, with respect to
each Product line, as such programs and procedures exist from time to time.
Page iii
Confidential
ATTACHMENT C
VALUE ADDED RESELLER AGREEMENT
POS REPORT FORM
---------------
Date:
VAR:_________________________
Contact:_____________________
Phone Number:________________
Fax Number:__________________
Invoice Customer Ship to City Zip Viator Part Description Qty. Unit Extended
Name Address # Cost Cost
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Forecast Form
-------------
Customer Percent 30 Days 60 Days 90 Days Product Comments
/End User Probability
- -------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Page iv
Confidential
ATTACHMENT D
VALUE ADDED RESELLER AGREEMENT
This Value Added Reseller Agreement is made, as of the Effective Date set forth
below, between:
(1) Viator Networks, Inc., a Delaware corporation ("Viator"), with
principal offices as 2390 East Camelback Road, Suite 250, Phoenix,
Arizona 85016 and
(2)
VIDEOLOCITY, Inc., a Nevada Corporation ("VAR")
VAR Address: 1762A Prospector Ave, Park City, UT 84060
Authorized Representative: Martin Senn
Telephone: 435 615 8838
Facsimile: 435 615 9979
Email: msenn@videolocity.com
Agreement No.___________________________________
Effective Date:_________________________________
Term: In perpetuity or until terminated under the terms stated herein
Territory: ____________________
The Value Added Reseller Agreement consists of the VAR Terms and Conditions
attached hereto and the Attachments set forth herein (together this
"Agreement"):
Attachment A General Pricing Schedule
Attachment B Certification and Authorization Requirements
Attachment C POS Report Form/Forecast Form
Value Added Reseller Viator Networks, Inc.
/s/ Martin Senn /s/Rodney J. Puleo
------------------------------ -----------------------------
By: Martin Senn By: Rodney J. Puleo
Name:
Title: COO COO
Date: 8/15/01 Date: 8/16/01