<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 21, 2000
REGISTRATION NO. 333-94291
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
INTELISPAN, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
<TABLE>
<S> <C> <C>
WASHINGTON 7379 91-1738902
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>
2151 EAST BROADWAY ROAD, SUITE 211
TEMPE, ARIZONA 85282
(480) 446-3200
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES D. SHOOK, ESQ.
VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY
2151 EAST BROADWAY ROAD, SUITE 211
TEMPE, ARIZONA 85282
(480) 446-3200
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
COPIES TO:
ROBERT S. KANT, ESQ.
JEAN E. HARRIS, ESQ.
SCOTT K. WEISS, ESQ.
GREENBERG TRAURIG, L.L.P.
ONE EAST CAMELBACK
PHOENIX, ARIZONA 85012-1656
(602) 263-2300
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.0001... 1,420,000 Shares $3.03 (1) $4,304,375 $1,136.36(3)
600,000 Shares $4.625(2) 2,775,000 $732.60(3)
------------------- ------------------- -------------------
2,020,000 Shares $7,079,375 $1,868.96
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated upon the average of the bid and asked price of our common stock
as of January 7, 2000.
(2) Calculated upon the average of the bid and asked price of our common stock
as of February 22, 2000.
(3) Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Amended and Restated Articles of Incorporation provide that a director
of our company will not be personally liable to our company or our shareholders
for monetary damages for conduct as a director, except for
- acts or omissions involving intentional misconduct by the director or a
knowing violation of law by the director,
- assenting to an unlawful distribution where it is established that the
director did not perform the director's duty of loyalty to our company,
or
- any transaction from which the director will personally receive a benefit
in money, property, or services to which the director is not legally
entitled.
Our articles of incorporation also provide that if the Washington Business
Corporation Act is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a director
of our company will be eliminated or limited to the fullest extent permitted by
the Washington Business Corporation Act, as so amended.
Our articles of incorporation also provide that we will indemnify and
advance expenses, to the fullest extent permitted by the Washington Business
Corporation Act, to each person who is a director or officer of our company.
This indemnity will not apply if
- acts or omissions of the director or officer are found to be intentional
misconduct or a knowing violation of law,
- a director assents to an unlawful distribution and it is established that
such director did not perform the director's duty of loyalty to our
company; or
- any transaction with respect to which it was found that such director or
officer personally received a benefit in money, property, or services to
which the director or officer was not legally entitled.
In addition, we have adopted provisions in our bylaws that require us to
indemnify our directors, officers, and certain other representatives of our
company against expenses and certain other liabilities arising out of their
conduct on behalf of our company.
II-1
<PAGE> 3
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the offering
described in the Registration Statement. All such expenses are estimates except
for the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 1,869
Accountants' fees and expenses.............................. $ 20,000
Legal fees and expenses..................................... $ 60,000
Printing and engraving expenses............................. $ 80,000
Transfer agent and registrar fees........................... $ 2,000
Miscellaneous fees.......................................... $ 3,131
--------
Total.................................................. $167,000
========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
In November 1996 through September 1997, we as Equipment Leasing & Sales
Corporation, or ELSC, issued 3,500,000 shares of common stock to our founders
for a total purchase price of $15,250. We issued these shares in reliance on an
exemption under Section 4(2) of the Securities Act as a transaction by an issuer
not involving a public offering.
In February 1997, we, as ELSC, completed an offering in which we issued to
approximately 15 accredited investors 266,000 shares of common stock for a total
of $53,200. We issued these shares in reliance on an exemption under Section
4(2) of the Securities Act as a transaction by an issuer not involving a public
offering and Rule 504 of Regulation D of the General Rules and Regulations under
the Securities Act.
In January 1998, we, as Intelispan Ventures, Inc., or IVI, completed an
offering in which we issued to five international investors 1,383,139 shares of
Class A common stock for a total purchase price of $600,000. These shareholders
received rights to acquire additional Class A and B Shares and incentive
warrants to acquire additional Class B shares depending upon the amount of funds
raised in our next offering. This offering was completed, in part, to nullify a
stock purchase agreement begun in September 1997. We issued these shares in
reliance on an exemption under Section 4(2) of the Securities Act as a
transaction by an issuer not involving a public offering and Rule 506 of
Regulation D of the General Rules and Regulations under the Securities Act.
In March 1998, we, as IVI, completed an offering in which we issued to 21
accredited investors 1,662,500 shares of Class A common stock for a total
purchase price of $3.325 million. We issued these shares in reliance on an
exemption under Section 4(2) of the Securities Act as a transaction by an issuer
not involving a public offering and Rule 506 of Regulation D of the General
Rules and Regulations under the Securities Act.
In June 1998, we, as ELSC, completed an offering in which we issued to
fourteen accredited investors 2,390,000 shares of common stock for a total
purchase price of $239,000. We issued these shares in reliance on an exemption
under Rule 504 of Regulation D of the General Rules and Regulations Under the
Securities Act.
II-2
<PAGE> 4
In July 1998, we, as ELSC, issued 15,235,000 shares of common stock to the
shareholders of IVI in connection with the merger of the companies. For each
1,000 shares of common stock held, each IVI shareholder received 884 shares of
ELSC. We issued these shares in reliance on an exemption under Section 4(2) of
the Securities Act as transactions by an issuer not involving any public
offering and Rule 506 of Regulation D of the General Rules and Regulations Under
the Securities Act.
In September 1998, we completed an offering in which we issued units at a
price of $7.50 per unit. Each unit consisted of one share of common stock and a
warrant to purchase one-half of a share of common stock. We sold units to eight
accredited investors, and as a result issued 341,334 shares of common stock for
a total purchase price of $2.56 million. We issued these shares in reliance on
an exemption under Section 4(2) of the Securities Act and Rule 506 of Regulation
D of the General Rules and Regulations Under the Securities Act. In August 1999,
these eight investors converted their units into Series A 10% Convertible
Preferred Stock at $100 per share. Holders of Series A Preferred Stock are
entitled to voting rights, and preferences in dividend and liquidation payments
over the holders of common stock. See "Description of Securities -- Preferred
Stock -- Series A Preferred Stock." Each share of Series A Preferred Stock is
convertible into 50 shares of common stock. In connection with this conversion,
we granted the holders of Series A Preferred Stock certain registration rights
with respect to the underlying common stock. We issued the Series A Preferred
Stock in reliance upon Section 4(2) of the Securities Act and Rule 504 of
Regulation D of the General Rules and Regulations under the Securities Act.
In March 1999, we completed an offering in which we issued to seven
accredited investors, one of which was an international investor, 542,001 shares
of common stock for a total purchase price of $760,000. We issued these shares
in reliance on an exemption under Section 4(2) of the Securities Act and Rule
504 of Regulation D of the General Rules and Regulations under the Securities
Act.
In March 1999 and April 1999, we sold notes totaling $206,250 to one
international corporate accredited investor. In June, we issued an additional
$1,000 promissory note to this investor to extend the maturity date of these
notes to October 31, 1999. The investor converted $150,000 of the amounts
outstanding into units in our December 1999 offering.
In July 1999 through October 1999, we sold to two accredited investors an
aggregate of $750,000 principal amount of notes. In connection with the issuance
of the notes, we issued to the holders warrants to purchase 600,000 shares of
common stock at an exercise price of $1.05 per share. At that time, we were
anticipating merging with another corporation. If we completed the merger, the
notes automatically converted into common stock. The notes were due May 2000,
and the principal amount of the notes and accrued interest were converted into
units in our private placement during December 1999.
In October 1999, ComVest, an affiliate of Commonwealth, made available to
us up to $1.0 million in a bridge financing. As of December 13, 1999, we had
borrowed an aggregate of $595,000 from ComVest and its designees, evidenced by
bridge notes, and agreed to convert the bridge notes into units at the closing
of the private placement. As a result of the conversion, ComVest and its
designees received 5.95 units in the private placement, consisting of 793,331
shares of common stock and unit warrants to purchase 396,669 shares of common
stock at an exercise price of $0.75 per share. In connection with the bridge
financing, we issued to ComVest and its designees bridge warrants to purchase
10,000,000 shares of common stock at an exercise price of $.01 per share, which
II-3
<PAGE> 5
ComVest and its designees exercised prior to the closing of the private
placement. ComVest sold a portion of the bridge warrants to affiliates of
Commonwealth. We issued the bridge notes and bridge warrants in reliance on an
exemption under Section 4(2) of the Securities Act as a transaction by an issuer
not involving a public offering.
In December 1999, we offered and sold units at a price of $100,000 per unit
in a private placement. We offered the units only to persons that were
"accredited investors," as defined under the Securities Act and Regulation D
promulgated thereunder. Each unit consisted of 133,333 shares of common stock
and a warrant to purchase 66,667 shares of common stock at an exercise price of
$0.75 per share. As of the date of this filing, we have sold 139.51 units,
resulting in the issuance of 18,601,287 shares of common stock and 9,300,713
unit warrants for a total purchase price of $13,951,000. Commonwealth
Associates, L.P. is offering the units on behalf of us as the placement agent in
the offering on a "best efforts" basis. In connection with this offering,
Commonwealth received (i) a commission equal to 7% of the aggregate purchase
price of the units sold, and (ii) a structuring fee equal to 3% of the aggregate
purchase price of the units sold. We also issued to Commonwealth seven-year
agent warrants to purchase, at an exercise price of $0.75 per share, 33.33% of
the shares of common stock (a) included in the units sold, and (b) issuable upon
exercise of the unit warrants included in the units sold. Pursuant to the sale
of 139.51 units, we paid Commonwealth approximately $977,000 in commissions,
$419,000 in structuring fees, and issued it 9,300,667 agent warrants. As of the
date of the private placement, ComVest, an affiliate of Commonwealth, had lent
us approximately $595,000 evidenced by bridge notes. ComVest and its designees
converted the bridge notes into 5.95 units in the offering and received 793,331
shares of common stock and unit warrants to purchase 396,669 shares of common
stock. We also agreed to convert approximately $1.0 million of other short-term
indebtedness and approximately $116,500 of compensation payable to certain
directors and officers into units in the offering. We issued the units and agent
warrants in reliance on an exemption under Section 4(2) of the Securities Act
and Rule 506 of Regulation D of the Securities Act.
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <S>
3.1 Amended and Restated Articles of Incorporation of the
Registrant**
3.2 Bylaws of the Registrant**
4.1 Specimen of Common Stock Certificate**
4.2 Specimen of Series A 10% Convertible Participating Preferred
Stock Certificate**
5 Opinion of Greenberg Traurig, a partnership of limited
liability entities**
10.1 The GridNet International, Inc. Program Enrollment Terms in
connection with its agreement for Data Communication
Products or Services dated April 9, 1998 (and the Terms and
Conditions attached thereto dated February 1998) by and
between GridNet International, Inc. and the Registrant+
10.2 Information Technology Supply Agreement dated September 10,
1997 between Contego, LLC and Security Domain Pty Limited**
10.3 Strategic Alliance Agreement dated December 11, 1997 by and
between Contego, LLC and GridNet International, Inc.+
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <S>
10.4 Distributor Agreement dated January 15, 1999 between
Contego, LLC and the Registrant**
10.5 Software License and Distribution Agreement dated June 18,
1998 by and between the Registrant and Cyclone Software
Corporation**
10.6 Altiga Networks, Inc. Authorized Distributor Agreement dated
June 23, 1999 between Altiga Networks, Inc. and the
Registrant+
10.7 Performance Equity Plan**
10.8 The Registrant's Severance Plan and Summary Plan
Description**
23.1 Consent of Greenberg Traurig, a partnership of limited
liability entities (included in Exhibit 5)**
23.2 Consent of KPMG LLP**
23.3 Consents of Proposed Directors**
24 Power of Attorney of Directors and Executive Officers
(included on Signature Page of the Registration Statement)**
27.1 Financial Data Schedule for Fiscal Year Ended December 31,
1997**
27.2 Financial Data Schedule for Nine Months Ended September 30,
1998**
27.3 Financial Data Schedule for Fiscal Year Ended December 31,
1998**
27.4 Financial Data Schedule for Nine Months Ended September 30,
1999**
27.5 Financial Data Schedule for Fiscal Year Ended December 31,
1999**
</TABLE>
- -------------------------
* To be filed by amendment.
** Previously filed.
+ Portions of the exhibit have been omitted pursuant to a request for
confidential treatment.
II-5
<PAGE> 7
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the city of Tempe,
state of Arizona, on March 21, 2000.
INTELISPAN, INC.
By: /s/ TRAVIS LEE PROVOW
------------------------------------
Travis Lee Provow
President and Chief Executive
Officer (Principal Executive
Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<C> <S> <C>
* Chairman of the Board of March 21, 2000
- --------------------------------------------------- Directors
Maurice J. Gallagher, Jr.
/s/ TRAVIS LEE PROVOW President, Chief Executive March 21, 2000
- --------------------------------------------------- Officer, and Director
Travis Lee Provow (Principal Executive
Officer)
* Vice Chairman of the Board March 21, 2000
- --------------------------------------------------- of Directors, Vice
Peter A. Nelson President -- Business
Development, and Founder
* Chief Financial Officer March 21, 2000
- --------------------------------------------------- (Principal Accounting
Scot A. Brands Officer)
* Director March 21, 2000
- ---------------------------------------------------
Michael S. Falk
* Director March 21, 2000
- ---------------------------------------------------
Philip R. Ladouceur
*By: /s/ TRAVIS LEE PROVOW
---------------------------------------------
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<C> <S>
3.1 Amended and Restated Articles of Incorporation of the
Registrant**
3.2 Bylaws of the Registrant**
4.1 Specimen of Common Stock Certificate**
4.2 Specimen of Series A 10% Convertible Participating Preferred
Stock Certificate**
5 Opinion of Greenberg Traurig, a partnership of limited
liability entities**
10.1 The GridNet International, Inc. Program Enrollment Terms in
connection with its agreement for Data Communication
Products or Services dated April 9, 1998 (and the Terms and
Conditions attached thereto dated February 1998) by and
between GridNet International, Inc. and the Registrant+
10.2 Information Technology Supply Agreement dated September 10,
1997 between Contego, LLC and Security Domain Pty Limited**
10.3 Strategic Alliance Agreement dated December 11, 1997 by and
between Contego, LLC and GridNet International, Inc.+
10.4 Distributor Agreement dated January 15, 1999 between
Contego, LLC and the Registrant**
10.5 Software License and Distribution Agreement dated June 18,
1998 by and between the Registrant and Cyclone Software
Corporation**
10.6 Altiga Networks, Inc. Authorized Distributor Agreement dated
June 23, 1999 between Altiga Networks, Inc. and the
Registrant+
10.7 Performance Equity Plan**
10.8 The Registrant's Severance Plan and Summary Plan
Description**
23.1 Consent of Greenberg Traurig, a partnership of limited
liability entities (included in Exhibit 5)**
23.2 Consent of KPMG LLP**
23.3 Consents of Proposed Directors**
24 Power of Attorney of Directors and Executive Officers
(included on Signature Page of the Registration Statement)**
27.1 Financial Data Schedule for Fiscal Year Ended December 31,
1997**
27.2 Financial Data Schedule for Nine Months Ended September 30,
1998**
27.3 Financial Data Schedule for Fiscal Year Ended December 31,
1998**
27.4 Financial Data Schedule for Nine Months Ended September 30,
1999**
27.5 Financial Data Schedule for Fiscal Year Ended December 31,
1999**
</TABLE>
- -------------------------
* To be filed by amendment.
** Previously filed.
+ Portions of the exhibit have been omitted pursuant to a request for
confidential treatment.
<PAGE> 1
EXHIBIT 10.1
GRIDNET INTERNATIONAL, INC.
PROGRAM ENROLLMENT TERMS
These Program Enrollment Terms ("PET") are made this 9th day of
April, 1998 (the "Effective Date"), by and between GridNet International,
Inc. ("GridNet"), a wholly owned subsidiary of WorldCom, Inc., and Intelispan,
Inc. ("Customer") and are a part of their agreement for Data Communication
Products or Services (the "Agreement"). This PET replaces and supercedes the PET
between GridNet and Customer dated September 16, 1997. In accordance with the
Agreement, charges to Customer for Service obtained thereunder shall be subject
to the Rate Schedule set forth below and the Agreement shall also be subject to
the terms and conditions set forth herein.
1. Product or Service Requested. Customer requests IntraConnect service
("Service") as defined in the attached IntraConnect Product Description,
and as modified by GridNet from time to time. Customer requests Service for
the term of this Agreement ("Term") commencing on May 1, 1998
("Commencement Date"). Unless otherwise specifically exempted from any term
of this Agreement, each Service will be subject to all of the terms of the
Agreement.
2. Term. The Term of this Agreement is fifty-three (53) months. Upon
completion of the initial Term, the Agreement will automatically renew for
an additional one year term under the terms and conditions existing in the
final month of the Initial Term, unless either party terminates the
Agreement with 60 days prior written notice to the other party.
3. IntraConnect Setup Fee. Customer shall pay a one time IntraConnect Setup
Fee of $3,500.00 for each separate enterprise network implementation and is
due and payable upon submission of Customer's Service Order. A separate
enterprise network implementation is defined as each of Customer's single
invoice points for its customers IntraConnect services.
4. IntraConnect Monthly Service Fee. Customer shall pay a recurring
IntraConnect Monthly Service Fee of $200.00 per month of the Term for each
separate enterprise network implementation, as defined above.
5. IntraConnect Service Usage. Customer's Service usage will be charged at the
rates set forth in the table immediately following. Rates may be eligible
for discounts as specified herein. International dial access (Canada local,
Mexico, South America, South Africa, Western Europe, and Asia Pacific)
capabilities require separate user IDs/passwords. Customer must specify the
world region for which they require access when the user ID/password is
created. International user ID/passwords may not function in world regions
other than the region for which it was originally configured. For
international dial access, the world region associated with Customer's user
IDs/passwords, regardless of the actual geographic network access point,
determines the applicable rate. Customer may specify a Global world region,
which provides for network access capability at every network point of
presence and will be invoiced according to the associated Global rate.
<TABLE>
<CAPTION>
Dial Usage Charges
- --------------------------------------------------------------------------------
Region Rate per Hour Region Rate per Hour
- ------ ------------- ------ -------------
<S> <C> <C> <C>
US Local (48 states) [ * ] Western Europe [ * ]
US 800 (48 states) [ * ] South America [ * ]
Canada (local) [ * ] South Africa [ * ]
Canada (800) [ * ] Asia Pacific [ * ]
AK, HI, PR & USVI (800) [ * ] Global [ * ]
Mexico [ * ]
</TABLE>
[*]Material marked with an asterisk throughout this exhibit has been omitted
pursuant to a request for confidential treatment. This material has been
filed separately with the Securities and Exchange Commission.
Page 1 of 6
<PAGE> 2
6. International User ID Charges. Each International User ID (Canada local,
Mexico, South America, South Africa, Western Europe, and Asia Pacific) will
incur a one time charge of $100.00 for adds, changes, or deletes and a
$15.00 monthly recurring charge.
7. Dedicated Host/LAN Access. Customer is obligated to procure the
interexchange portion of the dedicated telecommunications circuit
facilities required for Customer's host/LAN access from WorldCom. The
WorldCom services for IntraConnect Host/LAN access shall be either WorldCom
Frame Relay or WorldCom Asynchronous Transfer Mode (ATM) services. GridNet
will provision a virtual circuit from the IntraConnect network to
Customer's WorldCom Frame Relay or ATM port at no additional charge.
Customer may procure these services through one of the following two
options:
- Option 1 - If Customer has existing WorldCom Frame Relay or ATM
service installed or pending installation, Customer may elect for
GridNet to order an additional virtual circuit to Customer's existing
port. Customer will be responsible for any additional charges from
WorldCom for the provision of additional virtual circuits, under the
terms and conditions of its agreement under which the existing
services were acquired. Any additional charges as well as the existing
charges will be billed on a separate invoice from IntraConnect
charges. Host/LAN Access ordered under this option will not be
eligible for any discounts under this Agreement.
- Option 2 - Customer may elect to have GridNet order WorldCom Frame
Relay or ATM services on behalf of Customer. Terms and conditions,
including pricing, of WorldCom Frame Relay or ATM are as specified in
WorldCom's related FCC tariff filing(s). Charges for WorldCom Frame
Relay or ATM services ordered under this option will be billed on the
same invoice as IntraConnect charges and will be eligible for the
discounts specified below.
8. Optional Internet Connectivity. If Customer requires Internet connectivity,
in addition to the Host/LAN Access described above, Customer may optionally
order virtual circuits to the Internet provided such virtual circuits are
provisioned over the same physical circuits as used for Host/LAN Access for
IntraConnect. The rates in the table below described the additional charges
that apply in addition to those described in Host/LAN Access above. If
Customer orders Optional Internet Connectivity on ports ordered under
Host/LAN Access Option 1, Customer will be responsible for any additional
charges from WorldCom for the provision of additional virtual circuits,
under the terms and conditions of its agreement under which the existing
services were acquired. Optional Internet Connectivity will be eligible for
discounts under the "Other" column as described in the Discounts section
below.
<TABLE>
<CAPTION>
Optional Internet Connectivity
- --------------------------------------------------------------------------------
Frame Relay
- --------------------------------------------------------------------------------
Port Speed Monthly Recurring per 16 Kbps PVC Install
---------- ----------------- --------------- -------
<S> <C> <C> <C>
56/64 [ * ] [ * ] $ 250
128 [ * ] [ * ] $ 500
256 [ * ] [ * ] $ 500
384 [ * ] [ * ] $ 500
512 [ * ] [ * ] $ 500
768 [ * ] [ * ] $ 500
1024 [ * ] [ * ] $ 500
1544 [ * ] [ * ] $ 500
- --------------------------------------------------------------------------------
<CAPTION>
ATM per 1 MB PVC
------------
<S> <C> <C> <C>
45 [ * ] [ * ] $3,000
</TABLE>
9. Non-refundable Security Deposit. Customer agrees to provide a one-time
Non-refundable Security Deposit payment of $150,000 upon execution of this
Agreement. GridNet will credit Customer's account and apply charges under
this Agreement against this credit.
10. Monthly Commitment. The Monthly Commitment is shown in the table below and
is the net billed revenue for Services invoiced under this Agreement. The
Monthly Commitment will apply each
Page 2 of 6
<PAGE> 3
contract month. If, during the first 12 contract months, Customer fails to
satisfy the Monthly Commitment for any reason, the shortfall will be added
to the Monthly Commitment in the corresponding month of the third contract
year (contract months 25 through 36). For example, if Customer's net billed
revenue for the fifth contract month is $25,000, the commitment is $30,000,
then the shortfall would be $5,000. This shortfall of $5,000 will be added
to the Monthly Commitment of the 29th contract month (the fifth contract
month of the third contract year), such that the 29th contract month
Monthly Commitment would be $105,000. If, after the first 12 months of the
Term, Customer fails to satisfy the Monthly Commitment for any reason, in
addition to all other applicable charges, Customer shall pay to GridNet an
additional amount equal to the difference between the Monthly Commitment
and Customer's actual Service charges.
<TABLE>
<CAPTION>
Monthly Commitments
--------------------------------------------
Contract Month Monthly Commitment
-------------- ------------------
<S> <C>
Months 1 - 2 0
Months 3 - 4 $ 10,000
Months 5 - 6 $ 30,000
Months 7 - 9 $ 60,000
Months 10 - 53 $100,000
</TABLE>
11. Discounts. The following Discount Eligibility Table shows which product and
rate elements are eligible for the Discounts in the Discount Schedule, also
below. Customer's level of discounts is based on their Monthly Volume of
Services. The Monthly Volume of Services is the gross billed charges for
all usage and monthly recurring charges, except local access charges. The
Monthly Volume of Services does not include any non-recurring charges or
local access charges. The Customer will be forward priced to the $100,000
Monthly Volume of Service level for the first twelve (12) contract months,
regardless of their actual volume. Domestic discounts apply only to usage
from within the 48 contiguous US states. International discounts apply to
all other usage charges. "Other" discounts apply to all non-usage charge
elements specified as eligible for discount in the table below, unless
noted otherwise.
<TABLE>
<CAPTION>
Discount Eligibility Table
- --------------------------------------------------------------------------------
IntraConnect Eligible
- ------------ --------
<S> <C>
Local Dial Usage Yes
800 Dial Usage Yes
Monthly Service Fee Yes
Virtual NOC Charges Yes
Setup Fee Yes
Dedicated Host/LAN Monthly Recurring Charges Yes
Monthly Recurring Ancillary Charges Yes
Monthly Recurring DNS Charges Yes
Non-recurring Charges Yes
Local Access Charges (Monthly and Install) No
</TABLE>
Page 3 of 6
<PAGE> 4
<TABLE>
<CAPTION>
Volume Discount Schedule
- -----------------------------------------------------------------------------------------------
Charge Element
-------------------------------------------------------------
Monthly Volume of Services IntraConnect International Host/LAN Access Other
- -------------------------- ------------ ------------- --------------- -----
<S> <C> <C> <C> <C>
$ 10,000 to $ 14,999 [ * ] [ * ] [ * ] [ * ]
$ 15,000 to $ 19,999 [ * ] [ * ] [ * ] [ * ]
$ 20,000 to $ 29,999 [ * ] [ * ] [ * ] [ * ]
$ 30,000 to $ 39,999 [ * ] [ * ] [ * ] [ * ]
$ 40,000 to $ 49,999 [ * ] [ * ] [ * ] [ * ]
$ 50,000 to $ 74,999 [ * ] [ * ] [ * ] [ * ]
$ 75,000 to $ 99,999 [ * ] [ * ] [ * ] [ * ]
$100,000 to $149,999 [ * ] [ * ] [ * ] [ * ]
$150,000 to $199,999 [ * ] [ * ] [ * ] [ * ]
$200,000 to $249,999 [ * ] [ * ] [ * ] [ * ]
Over $250,000 [ * ] [ * ] [ * ] [ * ]
</TABLE>
12. Virtual NOC. Customer may elect to purchase Virtual NOC features under this
Agreement. Rates for Virtual NOC are listed in the table immediately
following.
<TABLE>
<CAPTION>
Virtual NOC Charges
- --------------------------------------------------------------------------------
Service Option One-Time Monthly
- -------------- -------- -------
<S> <C> <C>
Service Package - Includes all Options $1,475 $995
qwikINFO WAIVED WAIVED
qwikVIEW $550 $395
Remote IP Console $975 $395
Alarm Service $500 $395
Denied Access Alarm Service WAIVED $50
</TABLE>
13. Domain Name Service Charges. Customer may elect to purchase Domain Name
Services (DNS) in conjunction with IntraConnect under this Agreement. Rates
for DNS are listed in the table immediately following. Charges cover up to
10 DNS zones. Each additional 10 DNS zones will incur an additional onetime
and monthly recurring charge.
<TABLE>
<CAPTION>
DNS Service One-time (setup and change) Monthly
- ----------- --------------------------- -------
<S> <C> <C>
Primary DNS Forward or Reverse, Public or Private $250 $50
Secondary DNS Forward or Reverse, Public or Private $100 Waived
</TABLE>
14. Ancillary Charges. During the term of the Agreement, the following
ancillary charges will apply as indicated in the Ancillary Charges table
below.
- An Order Expedite Charge applies when Customer requests a service
activation date shorter than GridNet's standard order intervals, which
are shown in the table immediately following. If an Order Expedite
Charge applies, GridNet will use reasonable efforts to activate
Customer's service by the requested activation date or as soon as
possible thereafter, and in no way guarantees a service activation
date. Otherwise, GridNet will use reasonable efforts to provide
service activation within its standard order intervals following
receipt of Customer's order, or the requested delivery date, whichever
is later. This interval will be extended by the time it takes to
address activation errors, obtain from Customer a complete and
accurate order or obtain service
Page 4 of 6
<PAGE> 5
from the local exchange provider in the event Customer requests local
access service activation through GridNet.
<TABLE>
<CAPTION>
Standard Service Activation Intervals (Calendar Days)
- -----------------------------------------------------------------------------------------------
Order Type Days Order Type Days
- ---------- ---- ---------- ----
<S> <C> <C> <C>
New Service, New Frame Relay Port 37 New Service, New ATM Port 60
New Service, Existing Frame Relay Port 21 New Service, Existing ATM Port 21
Existing Service, Additional PVC 14 Secondary DNS Setup 7
Increase PVC CIR 14 Primary DNS Setup and Changes 7
Increase Frame Relay Port Speed 37 Virtual NOC 7
Additional Packet Filters 14 Additional Service ID 7
Change Packet Filters 14
</TABLE>
- Additional Packet Filters are sets of rules governing the routing of
dial access sessions and are associated with a specific Service ID.
- A Local Dial Access Service Request charge applies to each order in
which Customer has requested that GridNet supply the Local Exchange
Carrier local loop under Dedicated Host/LAN Option 3.
- One Service ID is included with IntraConnect. Each additional Service
ID will be invoiced at the rates in the following table.
- Each request by the Customer to modify a Packet Filter, after initial
configuration, will incur the Packet Filter Change charge.
- An order cancellation charge will apply to each order canceled after
submission to GridNet but prior to Service Activation.
- Charges for access to daily call detail records placed on GridNet's
ftp site are specified in table immediately following.
<TABLE>
<CAPTION>
Ancillary Charges
- -------------------------------------------------------------------------------------------
Item One-Time Monthly
- ---- -------- -------
<S> <C> <C>
Order Expedite Charge $200 per Order N/A
Additional Packet Filters $745 $200
Local Access Service Request $50 N/A
Additional Service IDs $195 Waived
Packet Filter Change $250 per Change N/A
Order Cancellation $250 N/A
Daily Call Detail Reporting via ftp $250 $75 plus $0.50 per 1000 CDRs
</TABLE>
15. Material Extent. If Customer terminates this Agreement or ceases to use
Service to any material extent, Customer agrees to pay GridNet an amount
equal to the value of the sum of all monthly commitments for each month or
partial month remaining in the Term.
The Terms and Conditions detailed in the GridNet International, Inc. Data
Communications Products and Services Terms and Conditions document dated
February 1998 ("Terms and Conditions") hereby incorporated into this document by
reference.
Any notices required to be given in conjunction with this agreement as detailed
in Terms and Conditions shall be sent to the addresses listed following the
parties' hereto signatures.
Page 5 of 6
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed these Program Enrollment Terms on
the date first written above.
GRIDNET INTERNATIONAL, INC. INTELISPAN, INC.
By: /s/ Lee Provow By: /s/ Peter Nelson
----------------------------- -----------------------------
(Signature) (Signature)
Lee Provow Ex. V.P. Peter Nelson, CEO
----------------------------- -----------------------------
(Printed Name, Title) (Printed Name, Title)
Address: Address:
1000 Holcomb Woods Parkway 8220 East Gelding Drive
Suite 342 Scottsdale, Arizona 85260
Roswell, Georgia 30076
Page 6 of 6
<PAGE> 7
GRIDNET INTERNATIONAL, INC.
DATA COMMUNICATIONS
PRODUCTS AND SERVICES TERMS AND CONDITIONS
THESE DATA COMMUNICATIONS PRODUCTS AND SERVICES TERMS AND CONDITIONS
dated February 1998 apply to each and every agreement for products and services
entered into between GridNet International, Inc. and Customer. These Terms and
Conditions apply when GridNet agrees to provide and Customer agrees to accept
data communication products, transaction services, enhanced network services
and/or other associated services (collectively the "Services"), (i) in
conformity with each Service Order (described below) which is accepted
hereunder, and (ii) subject to the terms and conditions contained in the Program
Enrollment Terms ("PET"). These Terms and Conditions may be attached to or
referenced by either and are thereby incorporated therein by reference.
In the event of a conflict between these Terms and Conditions, the PET
and the Service Order(s), the following order of precedence will prevail: (1)
PET, (2) the Terms and Conditions, and (3) Service Order(s). Collectively, the
Terms and Conditions and the PET, together with any Service Order(s) are
referred to herein as the "Agreement". The PET and the Service Order(s) are
collectively referred to herein as "Service Request."
1. Term.
(A) Effective Date. This Agreement shall be effective between the parties
as of the date first written in the Service Request (the "Effective
Date") and shall continue for the period of time set forth in the
Service Request including any extensions thereof (the "Term
(B) PET. The PET, as subscribed to by the parties, shall set forth the
charges for Services due under this Agreement, Customer's Monthly
Commitment, and other information necessary to provide the Service
under this Agreement.
(C) Start of Service. GridNet's obligation to provide and customer's
obligation to accept and pay for non-usage sensitive charges for
Service shall be binding to the extent provided for in this Agreement
upon the submission of an acceptable Service Request to GridNet by
Customer. Customer's obligation to pay for usage sensitive charges for
Services shall commence as of the date the Service is made available to
Customer and used (collectively "Start of Service").
(D) Service Order. Customer's request to initiate or cancel Services shall
be described in an appropriate GridNet Service Order. Service Order may
consist of original GridNet Service Order forms signed by Customer,
facsimiles of Customer signed GridNet Service Order forms or other
means approved by GridNet. Further, Service Orders shall specify all
reasonable information, as determined by GridNet, necessary or
appropriate for GridNet to provide the Service(s) in question. Any
other terms and conditions that are typed, printed or otherwise
included in any Service Request shall be deemed to be solely for the
convenience of the parties unless initialed by an authorized GridNet
Representative, and no action by GridNet (including, without
limitation, provision of Service to Customer pursuant to such Service
Request) shall be construed as binding or estopping GridNet with
respect to such term or condition, unless the Service Request
containing said specific term or condition has been signed by an
Authorized Representative of GridNet.
2. Cancellation.
<PAGE> 8
(A) Cancellation Charge. After a Service Request is accepted by GridNet,
Customer may cancel all or a portion of the Service described therein
if Customer provides written notification thereof to GridNet prior to
the installation of such service and subject to the Cancellation
Charges in the Program Enrollment Terms. After a Service is accepted by
Customer, Customer may cancel all or a portion of the Service described
therein if Customer provides written notification thereof to GridNet
thirty (30) days in advance of the effective date of cancellation. In
such case, Customer shall pay to GridNet all charges for Service
provided through the effective date of such cancellation plus a
cancellation charge determined as follows: (i) if the Service
Commitment Period for the canceled Service is one (1) year or less,
then the cancellation charge shall be an amount equal to the balance of
the monthly Service charges (then in effect at the time of
cancellation) for such canceled service that otherwise would have
become due for the unexpired balance of the Service Commitment Period
(but in no event less than zero); (ii) if the Service Commitment Period
for the canceled Service is longer than one (1) year and such
cancellation becomes effective prior to completion of the first year of
the Service Commitment Period, then the cancellation charge shall be an
amount equal to seventy-five percent of the balance of the monthly
Service charges (then in effect at the time of cancellation) for such
canceled Service that otherwise would have become due for the unexpired
portion of the first year of the Service Commitment Period plus fifty
percent (50%) of the balance of such monthly Service charges for the
remainder of the Service Commitment Period beyond the first year; and,
(iii) if the Service Commitment Period for the canceled Service is
longer than one (1) year and such cancellation becomes effective after
completion of the first year of the Service Commitment Period, then the
cancellation charge shall be an amount equal to thirty percent (30%) of
the balance of the monthly Service charges (then in effect at the time
of cancellation) for such canceled Service that otherwise would have
become due for the unexpired portion of the Service Commitment Period.
In the event monthly Service charges are not fixed, monthly Service
charges shall be the average charges for usage of Services canceled
over the preceding three (3) months.
(B) Liquidated Damages. It is agreed that GridNet's damages in the event
Customer cancels Service shall be difficult or impossible to ascertain.
The provision for a cancellation charge in Subsection 2(A) above is
intended, therefore, to establish liquidated damages in the event of a
cancellation and is not intended as a penalty.
(C) Cancellation Without Charge. Notwithstanding anything to the contrary
contained in Subsection 2(A) above, Customer may cancel this Agreement
without incurring any cancellation charge if (i) GridNet fails to
provide the Services contracted for under this Agreement; or (ii)
GridNet fails to provide a network as warranted in Section 8. Customer
must, however, give GridNet written notice of any such default as
detailed in (i) or (ii) above and an opportunity to cure such default
within twenty-four (24) hours of the notice. Default is defined here as
a problem with the service to be provided or with the network which is
controllable by GridNet, not a result of a force majeure occurrence or
that of a Local Exchange Carrier ("LEC"). In the event GridNet fails to
cure any such default within the twenty-four (24) hour period on more
than three (3) occasions within any six (6) month period, Customer may
cancel this Agreement without incurring any cancellation charge.
Additionally, if GridNet fails to cure any default, after notice,
within three (3) days, Customer may cancel this Agreement without
incurring any cancellation charge.
(D) Additional Charges. In the event of any cancellation described in
section 2(A), Customer shall also pay GridNet an amount equal to any
termination charges, expenses, fees or penalties incurred by GridNet
due to cancellation of Local Access plus any other costs, expenses or
charges incurred and billed to GridNet as a direct result of Customer's
cancellation.
3. Customer's Responsibilities.
(A) Expedite Charges. In the event Customer requests expeditious Service
and/or changes to Service Orders and GridNet agrees to such request,
GridNet will pass through the charges assessed by any supplying parties
involved at the same rate to Customer. GridNet may further condition
its performance of such request upon Customer's payment of additional
charges to GridNet.
<PAGE> 9
(B) Fraudulent Transactions. Customer shall indemnify and hold GridNet
harmless from all costs, expenses, claims or actions arising from
fraudulent transactions or use of Services which may comprise a portion
of the Service to the extent that the party claiming the transaction(s)
or use of Services in question to be fraudulent is an End User of the
Service through Customer or an End User of the Service through
Customer's distribution channels. Customer shall not be excused from
paying GridNet for Services provided to Customer or any portion thereof
on the basis that fraudulent transactions or use of Services comprised
a corresponding portion of the Service. In the event GridNet discovers
fraudulent transactions or use of Services occurring (or reasonably
believes such), nothing contained herein shall prohibit GridNet from
taking immediate action (without notice to Customer) that is reasonably
necessary to prevent such fraudulent use of Services from taking place,
including without limitation, denying or terminating Service to and
from specific locations.
(C) Preparation. In conformity with each Service Request which is accepted
hereunder, Customer shall (a) provide all necessary preparations
required to comply with GridNet's installation and maintenance
specifications, (b) be responsible for the costs of relocation of
Service once installed by GridNet, and (c) provide to GridNet and the
suppliers of communications lines reasonable access to Customer's
premises to perform any acts required by this Agreement. Customer or
Customer's suppliers have sole responsibility for installation, testing
and operation of facilities, services and equipment other than that
specifically provided by GridNet as part of the Service described in a
Service Request ("Customer Facilities"). In no event will the untimely
installation or non-operation of Customer Facilities (including Local
Access when Customer is responsible therefor and customer premise
equipment) relieve Customer of its obligation to pay charges for the
Service as of Start of Service, unless GridNet has failed to properly
install or provide industry standard equipment.
(D) Use of Equipment. Customer shall properly use Equipment provided by
GridNet and shall surrender the Equipment not purchased by the Customer
to GridNet upon expiration or termination of the Agreement. Except for
purchased Equipment, Customer shall be liable for any and all damage to
or loss of Equipment located on Customer's premises.
(E) Use of Products and Services. Customer shall not, nor shall it permit
or assist others to: (i) use Services for any purpose other than that
for which they are intended or in violation of the law or in aid of any
unlawful act, (ii) use Services so as to interfere with the use of the
GridNet network by other customers or authorized users, (iii) use
Services to access, alter, destroy or any attempt thereof any
information of another GridNet customer, (iv) fail to maintain a
suitable environment specified by GridNet, to the extent Customer has
control of the environmental conditions, (v) use Services in violation
of GridNet's Acceptable Use Policy, as modified from time to time,
which is publicly available at GridNet's website, or (vi) alter, tamper
with, adjust or repair the Services. Upon the occurrence of any of the
above, GridNet shall be completely released from any liability or
obligation (including any warranty or indemnity obligation) to Customer
relative to the Services and this Agreement, and Customer shall be
liable to GridNet for costs or damages incurred by GridNet resulting
therefrom. Notwithstanding the aforementioned, Customer can alter,
adjust or repair the Service where GridNet is in Default of its
obligations under this Agreement and Customer can mitigate its damages
by such activity.
4. Billing Policy, Charges and Payment terms.
(A) Billing Policy.
(i) Customers will be responsible for all Calls which are authorized and
authenticated by the GridNet Network Access Control (GNAC) for User
ID/passwords under the Customer's Service ID, except for calls from
temporary User IDs setup under the GridNet Test Account policy
(paragraph iv). Customer will be responsible for maintaining the User
ID/passwords under it's Service ID in GNAC. GridNet will assist
Customer in deterring fraudulent use of network services but Customer
is responsible to deactivate the User ID in GNAC if Customer suspects
fraudulent use of a User ID/password under its Service ID.
<PAGE> 10
(ii) The start time for Calls will be based on the timestamp in GNAC
system, which occurs when a User ID/password has been authenticated.
The end time for Service will be based on the GNAC timestamp when
the Call is terminated (the modem's drop carrier). Each Call is
measured in one minute increments with a one minute minimum with
fractional minutes rounded up to the next higher minute increment.
Invoicing will summarize usage in hours, which will be the sum of
all billable call minutes divided by 60 to convert to hours.
(iii) GridNet's single billing cycle is based on the calendar month,
starting at 12:01 am on the first day of the month and completing at
12:00 midnight on the last day of the month. Dial access calls which
span two billing cycles will be accounted for in the month in which
the call completes. For example, a call which starts at 11:30 p.m.
on January 31st and lasts for one hour until 12:30 am on February
1st will be billed in the February billing cycle.
(iv) Upon GridNet's acceptance of an initial service order for Services,
GridNet will establish Test Accounts under the Customer's Service ID
for the purpose of allowing authorized representatives of Customer
to test and evaluate the performance of GridNet's dial access
network. The Test Accounts will provide unlimited dial access usage
at no charge to the Customer. The Test Accounts will automatically
deactivate after 30 days.
(v) GridNet will provide a software utility to Customer for secure
maintenance of the User ID/passwords under its Service IDs.
Customer's specified Supervisory User ID/password is to be used to
connect to GNAC via a permanent virtual circuit setup between
Customer's remote system and GNAC. If Customer is unable to
establish a connection to GNAC, Customer may contact GridNet's 24
hour customer service 800 number to deactivate User IDs suspected of
unauthorized or fraudulent activity.
(vi) If Customer is billed on a Per User basis, GNAC does not allow
simultaneous logins of the same User ID. Customers whose dial access
usage is billed solely on a usage sensitive basis (i.e., per hour)
are permitted to have simultaneous logins of the same User
ID/password (multiple users using the same User ID). In this case,
it is possible for the usage associated with a given User
ID/password to exceed clock time (for example, the usage associated
with a user ID could exceed 24 hours in a single day).
(vii) Customers whose dial access usage is billed on a Per User basis are
NOT authorized to permit multiple end users from using the same User
ID. Customers billed in this manner are required to restrict the use
of User ID/passwords by individuals accessing the network from a
single terminal at any one time. Customer is responsible with
enforcement of this policy with the End Users. If GridNet detects
simultaneous logins by a User ID billed on fixed rate basis, GridNet
reserves the right to deactivate the User ID. GridNet shall notify
Customer of such action as soon as possible following such
deactivation.
(viii) Flat rate per user charges will be assessed for each User IDs that
authorized for use in GNAC, whether or not the User ID had actual
usage during the billing cycle.
(ix) PROVIDED GRIDNET IS READY, WILLING, AND ABLE TO DELIVER THE SERVICE,
CUSTOMER'S BILLING START DATE FOR FIXED MONTHLY RECURRING CHARGES
WILL BE THE EARLIER OF: 1) CUSTOMER REQUEST DATE ON THE ORDER FORM;
OR 2) THE DATE CUSTOMER ACCEPTS THE SERVICE. OTHERWISE, CUSTOMER'S
BILLING START DATE FOR FIXED MONTHLY RECURRING CHARGES WILL BE THE
DATE THAT GRIDNET IS READY, WILLING, AND ABLE TO PROVIDE THE
SERVICE.
When configuration changes occur during a billing cycle that would change the
fixed monthly recurring charge, Customer charges will be prorated by percentage
of each Service used during the month. The charges will be calculated according
to the following formula for each type of Service provided: (Number of days
service provided)
<PAGE> 11
Fixed Monthly
- ------------------------------------------ X Recurring Charge
Number of days in month
(B) Payment.
(i) Payment for all pro-rated monthly recurring charges (charges for
monthly Service provided for less than a calendar month),
installation and other non-recurring charges shall be due on the
first day of the month following the month in which the Service was
provided or upon receipt of an invoice whichever is later. Payment
for all monthly recurring charges for full months during which the
Service is to be provided following Start of Service shall be due in
advance on the first day of that month.
(ii) GridNet's invoice to Customer will be computed each calendar month
in advance of the due date for charges as provided above and as of a
billing cut-off date determined by GridNet ("GridNet Billing Cut-Off
Date"). The invoice date shall not be determinative of the billing
cut-off date used by GridNet in the preparation of any particular
invoice. Customer will be invoiced at the GridNet Billing Cut-Off
Date for usage based charges. Payment for usage based invoices is
due within thirty (30) days of the invoice date.
(iii) For new orders submitted in which installation charges apply,
Customer may be required to submit payment for all installation
charges in full before the order will be processed, otherwise,
charges will be due as set forth in (i) above.
(iv) Customer agrees to remit payment to GridNet at the remittance
address indicated on GridNet invoices to Customer. In the event
Customer fails to pay GridNet's invoice in full or remit payment to
the proper address on or before thirty (30) days after the due date,
Customer shall also pay a late fee in the amount of the lesser of
one and one-quarter percent (1-1/4%) of the unpaid balance per month
or the maximum lawful rate under applicable state law.
Notwithstanding the foregoing, late fees shall apply to, but shall
not be due and payable for, amounts reasonably disputed by Customer
as detailed below in Section (F).
(C) Invoices. GridNet's invoices will be mailed prior to the tenth day
of the calendar month. Variable monthly recurring charges (usage
sensitive, user sensitive, etc.) will be included on the following
month's invoice. Fixed monthly recurring charges and non-recurring
charges will be billed in advance. For example: A customer's invoice
created on or about January 5th would include variable monthly
recurring charges for the December billing cycle and fixed monthly
recurring and non-recurring charges for the January billing cycle.
The period of any other charges or adjustments on the invoice will
be identified on the invoice by line item. GridNet will make every
effort to invoice Service calls during the month the Service call
occurred; however, it is possible that either individual or
summarized calls may not be invoiced in the cycle in which they
occur. Customer acknowledges with the receipt of a summarized
invoice that the call detail may not be directly associated with
calls completed in that month. Invoices will be calculated based on
GridNet's month end tabulation of billable service usage
irrespective of daily, weekly, bi-weekly or other data generated and
transferred to Customer for its information purposes. GridNet agrees
that all invoice data transferred to Customer by tape or in other
electronic format will be equivalent in all respects to the invoiced
amounts reflected on each monthly invoice.
(D) Taxes. Customer acknowledges and understands that GridNet computes
all charges herein exclusive of any applicable federal, state or
local use, excise, gross receipts, sales and privilege taxes,
duties, fees or similar liabilities (other than general income or
property taxes), whether charged to or against GridNet or Customer
because of Service furnished to Customer ("Additional Charges").
Customer shall pay such Additional Charges in addition to all other
charges provided for herein.
(E) Modification of Services. GridNet reserves the right to eliminate
Service offerings and/or modify charges for Service offerings (which
charge modifications shall not exceed then-current generally
available GridNet charges for comparable services), upon not less
than sixty (60) days prior notice to Customer, which notice will
state the effective date for the charge modifications. In the event
GridNet notifies Customer of the elimination of a Service offering
and/or an increase in the charges, Customer may terminate this
Agreement, without incurring a cancellation charge only with respect
to the Service offering affected by the increase in
<PAGE> 12
charges. In order to cancel that offering, Customer must notify
GridNet, in writing, at least thirty (30) days prior to the
effective date of the increase in charges. Further, in the event
Customer cancels its Service as described in this Subsection 4(E),
GridNet and Customer agree to negotiate in good faith concerning
Customer's Minimum Monthly Commitment and Annual Commitment, if any,
described in the PET or Service Order.
(F) Billing Disputes. For a Customer to dispute an amount owed, Customer
must pay all undisputed charges on or before the due date and submit
to GridNet within twenty-five (25) days of the due date, a written
statement of any billing discrepancies to GridNet in reasonable
detail. Within fourteen (14) business days of receipt of the written
statement, GridNet will respond to the disputed charges by either
providing Customer with detail supporting the imposition of the
charges or crediting the Customer's account. In the event GridNet
finds that the charges are owed and Customer continues to disagree,
Customer agrees to negotiates in good faith with GridNet for the
purpose of resolving such disputes within thirty (30) days of
GridNet's response regarding the billing disputes. Late fees paid
shall be credited on all amounts paid on charges determined to be
incorrect. In the event the dispute cannot be resolved with such
thirty (30) day period (unless GridNet has agreed in writing to
extend such period) the amount is considered owed, and this
provision shall not be construed to prevent Customer from pursuing
any legal remedies. GridNet shall not be obligated to consider any
customer notice of billing discrepancies which are received by
GridNet more than twenty-five (25) days following the Due Date of
the invoice in question.
(G) Suspension of Service. In the event payment in full is not received
from Customer on or before thirty (30) days following the due date
with respect to undisputed amounts or on or before ninety (90) days
following the due date with respect to amounts reasonably disputed
in accordance with the prescriptions of Subsection 4(F), GridNet
shall have the right, after giving Customer ten (10) days notice
("Suspension Notice") and an opportunity to cure, to suspend all or
any portion of the Service to Customer, or upon subsequent notice,
all or any additional portions of the Service to Customer; and, in
either event, until such time as Customer has paid in full all
charges then due, including any late fees as specified herein.
Following such payment, GridNet shall be required to reinstitute
Service to Customer only upon the provision by Customer to GridNet
of satisfactory assurance (such as a deposit) of Customer's ability
to pay for Service and Customer's advance payment of the cost of
reinstituting Service. If Customer fails to make such payment by a
date determined by and acceptable to GridNet, Customer will be
deemed to have canceled the suspended Service effective the date of
such suspension. Such cancellation shall not relieve Customer for
payment of applicable cancellation charges as described in Section
2.
5. Credit. Customer's execution of this Agreement signifies Customer's
acceptance of GridNet's initial and continuing credit approval procedures
and policies. GridNet reserves the right to withhold initiation or full
implementation of Service under this Agreement pending GridNet's initial
satisfactory credit review and approval thereof which may be conditioned
upon terms specified by GridNet, including but not limited to, security for
payments due hereunder in the form of cash deposit or other means. GridNet
reserves the right to modify its requirements, if any, with respect to any
security or other assurance provided by Customer for payments due hereunder
in light of Customer's actual usage when compared to projected usage levels
upon which any security or assurance requirement was based.
6. Creditworthiness. If at anytime there is a material adverse change in
Customer's creditworthiness, then in addition to any other remedies
available to GridNet, GridNet may elect, in its sole discretion, to
exercise one or more of the following remedies: (i) cause Start of Service
for Service described in a previously executed Service Request to be
withheld; (ii) cease providing Service pursuant to a Suspension Notice;
(iii) decline to accept a Service Request or other requests from Customer
to provide service or acceptance of a Service Request unless Customer's
gives an assurance of payment which shall be a deposit or such other means
to establish reasonable assurance of payment. An adverse material change in
Customer's creditworthiness shall include, but not be limited to: (a)
Customer's default of its obligations to GridNet under this or any other
agreement with GridNet; (b) failure of Customer to make full payment of
undisputed charges due hereunder on or before the Due Date on three (3) or
more occasions during any period of twelve (12) or fewer months or
Customer's failure to make such payment on or before the Due Date in any
two (2) consecutive months; (c) acquisition of Customer (whether in whole
or by majority or controlling interest) by an entity which is insolvent,
which is subject to
<PAGE> 13
bankruptcy or insolvency proceedings, which owes past due amounts to
GridNet or any entity affiliated with GridNet or which is a materially
greater credit risk than Customer; or, (d) Customer's being subject to or
having filed for bankruptcy or insolvency proceedings or the legal
insolvency of Customer.
7. Remedies for Breach. In the event Customer is in breach of this Agreement,
including without limitation, failure to pay charges due hereunder by the
date stated in the Suspension Notice described in Subsection 4(G), GridNet
shall have the right, after giving Customer five (5) days prior notice, and
in addition to foreclosing any security interest GridNet may have, to (i)
terminate this Agreement; (ii) withhold billing information from Customer;
(iii) retake possession of any and all Products and Services; and/or, if
applicable (iv) contact the End Users (for whom calls are originated and
terminated solely over facilities comprising the GridNet network and with
information provided by Customer at GridNet's request) directly and bill
such End Users directly until such time as GridNet has been paid in full
for the amount owed by Customer. If Customer fails to make payment by the
date stated in the Suspension Notice and GridNet, after giving Customer
five (5) days prior notice, terminates this Agreement as provided in this
Section 7, such termination shall not relieve Customer from payment of
applicable cancellation charges as described in Section 2 above.
8. Warranty. GridNet warrants to provide, install, operate and maintain
Products and Services as required herein. GridNet shall not be responsible
for cabling to connect equipment not provided by GridNet to GridNet's
Products and Services. GridNet warrants that all Products and Services will
be in good working order and ready for use on the day installed, and will
conform to industry standards. Customer's sole remedy for performance or
non-performance of Products and Services pursuant to a breach of standards
shall be replacement or repair of Products and Services. GRIDNET MAKES NO
OTHER WARRANTIES ABOUT THE SERVICE PROVIDED HEREUNDER, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE.
9. Limitation of Liability
(A) Limited Liability. In no event shall GridNet be liable, either in
contract or in tort, for protection from unauthorized access of
Customer's transmission facilities or Customer premise equipment; or
from unauthorized access to or alteration, theft or destruction of
Customer's data files, programs, procedure or information through
accident, fraudulent means or devices, or any other method. Whether
caused by GridNet or otherwise, GridNet will use reasonable efforts
under the circumstances to remedy any delays, interruptions, omissions,
mistakes, accidents, or errors in the Service (hereinafter "Defect" or
"Defects") and restore the Service. GRIDNET SHALL NOT BE LIABLE FOR ANY
INDIRECT, CONSEQUENTIAL, SPECIAL, PUNITIVE OR ANY OTHER DAMAGES, OR FOR
ANY LOST PROFITS OF ANY KIND OR NATURE WHATSOEVER, WHETHER IN CONTRACT
OR IN TORT, AND CUSTOMER'S SOLE EXCLUSIVE REMEDY SHALL BE AS FOLLOWS:
Following Start of Service, if Customer reports a Defect to GridNet at
GridNet's Operations Center and GridNet is unable to restore the
Service as warranted within four (4) hours of such report, in the case
of non-usage sensitive charges, Customer shall, upon request directed
to Customer's designated Customer Service Representative, receive a
credit at the rate of 1/720th of the monthly charges applicable to the
affected Service for each hour or major fraction thereof in excess of
the first eight (8) hours that the affected Service fails to conform to
the Technical Standards. In the case of usage sensitive charges,
Customer shall receive a credit under the same terms as for non-usage
sensitive charges but for an amount equal to 40% of 1/720th of the
previous month's usage sensitive usage charges.
(B) Negligence. Except to the extent caused by the negligence of GridNet,
GridNet shall not be liable for claims or damages resulting from or
caused by: (i) Customer's fault, negligence or failure to perform
Customer's responsibility; (ii) claims against Customer by any other
party; (iii) any act or omission of any other party; or (iv) equipment
or services furnished by any other party.
(C) Indemnity. Customer agrees to indemnify, hold harmless, and defend
GridNet, its directors, officers, agents, employees and/or
representatives from and against any and all claims, demands, causes of
action, losses, expenses or liabilities, including reasonable
attorney's fees, on account of injury or death of any person or loss of
or damage to any and all property arising, directly or indirectly, out
of the acts or
<PAGE> 14
omissions of Customer, any subcontractor, director, officer, agent,
employee and/or representative of each of them, in the performance of
any work under this Agreement, except to the extent such cause of
action, loss, expense or liability is caused by the sole negligence of
GridNet.
(D) Exclusive Remedy. Except as otherwise specifically provided for
herein, the remedies set forth in this Agreement comprise the
exclusive remedies available to either party at law or in equity.
10. Force Majeure. If either party's performance of this Agreement or any
obligation hereunder is prevented, restricted or interfered with by causes
beyond its reasonable control including, but not limited to, acts of God,
fire, explosion, vandalism, cable out, terrorism, storm or other similar
occurrence, any law, order, regulation, direction, action or request of the
United States government, or state or local governments, or of any agency,
commission, court, bureau, corporation or other instrumentality of any one
or more such governments, or of any civil or military authority, or by
national emergency, insurrection, riot, war, strike, lockout or work
stoppage or other labor difficulties, or supplier failure, shortage, breach
or delay, then that party shall be excused from such performance on a
day-to-day basis to the extent of such restriction or interference. That
party shall use reasonable efforts under the circumstances to avoid or
remove such causes of nonperformance and shall proceed to perform with
reasonable dispatch whenever such cases are removed or cease.
11. Notices. Notices under this Agreement shall be in writing and delivered by:
certified mail, return receipt requested; or, a nationwide overnight
delivery service which provides delivery and receipt verification, to the
person identified in the Service Request at the offices of the parties or
as otherwise provided for by proper notice hereunder. Customer shall notify
GridNet in writing if Customer's billing address is different from the
address shown on the Service Request. The effective date for any notice
under this Agreement shall be the date of actual receipt of such notice by
the appropriate party, notwithstanding the date of mailing.
12. No-Waiver. No term or provision of this Agreement shall be deemed waived
and no breach or default shall be deemed excused unless such waiver or
consent shall be in writing and signed by the party claimed to have waived
or consented. A consent to waiver of or excuse for a breach or default by
either party, whether express or implied, shall not constitute a consent
to, waiver of, or excuse for any different or subsequent breach or default.
13. Partial Invalidity; Government Action.
(A) Partial Invalidity. If any part of any provision of this Agreement or
any other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, rule or regulation, that part shall be ineffective to
the extent of such invalidity only, without in any way affecting the
remaining parts of that provision or the remaining provisions of this
Agreement. In such event, Customer and GridNet will negotiate in good
faith with respect to any such invalid or unenforceable part to the
extent necessary to render such part valid and enforceable.
(B) Government Action. Upon thirty (30) days prior notice, either party
shall have the right, without liability to the other, to cancel an
affected portion of the Service if any material rate or term contained
herein and relevant to the affected Service is substantially changed
(to the detriment of the terminating party) or found to be unlawful or
the relationship between the parties hereunder is found to be unlawful
by the highest court of competent jurisdiction to which the matter is
appealed, the FCC, (if it has jurisdiction), or other local, state or
federal government authority of competent jurisdiction.
14. Use of Service. Upon GridNet's acceptance of a Service Request hereunder,
GridNet will provide the Service specified therein to Customer upon
condition that the Service shall not be used for any unlawful purpose. The
provision of Service will not create a partnership or joint venture between
the parties or result in a joint communications service offering to any
third parties. Only upon express written consent shall Customer be
permitted to use GridNet's name, trademarks, tradename, service marks or
any other intangible property owned by GridNet for the promotion of
Customer's use of the Service.
15. Choice of Law; Forum; Limitation.
<PAGE> 15
(A) Law. This Agreement shall be construed under the laws of the State of
Georgia without regard to choice of law principles.
(B) Forum. Any legal action or proceeding with respect to this Agreement
may be brought in the Courts of the State of Georgia in and for the
County of Fulton or the United States of America for the Northern
District of Georgia. By execution of this Agreement, both Customer and
GridNet hereby submit to such jurisdiction, hereby expressly waiving
whatever rights may correspond to either of them by reason of their
present or future domicile. In furtherance of the foregoing, Customer
and GridNet hereby agree to service by U.S. Mail at the notice
addresses referenced in Section 11. Such service shall be deemed
effective upon the earlier of actual receipt or seven (7) days
following the date of posting.
(C) Limitation of Action. Any legal action arising out of failure,
malfunction or defect in Products or Services shall be brought within
one (1) year of the occurrence.
16. Proprietary Information.
(A) Confidential Information. The parties understand and agree that the
terms and conditions of this Agreement, all documents referenced
(including invoices to Customer for Service provided hereunder) herein,
communications between the parties regarding this Agreement or the
Service to be provided hereunder (including price quotes to Customer
for any Service proposed to be provided or actually provided
hereunder), as well as such information relevant to any other agreement
between the parties (collectively "Confidential Information"), are
confidential as between Customer and GridNet.
(B) Limited Disclosure. A party shall not disclose Confidential Information
unless subject to discovery or disclosure pursuant to legal process, or
to any other party other than the directors, officers, and employees of
a party; or a party's agents including their respective brokers,
lenders, insurance carriers or bona fide prospective purchasers who
have specifically agreed in writing to nondisclosure of the terms and
conditions hereof. Any disclosure hereof required by legal process
shall only be made after providing the non-disclosing party with notice
thereof in to order permit the non-disclosing party to seek an
appropriate protective order or exemption. Violation by a party or its
agents of the foregoing provisions shall entitle the non-disclosing
party, at its option, to obtain injunctive relief without a showing of
irreparable harm or injury and without bond.
(C) Survival of Confidentiality. The provisions of this Section 16 will be
effective as of the date of this Agreement and remain in full force and
effect for a period which will be the longer of (i) one (1) year
following the date of this Agreement, or (ii) one (1) year from the
termination of all Service hereunder.
17. Successors and Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors or
assigns, provided, however, that Customer shall not assign or transfer its
rights or obligations under this Agreement without the prior written
consent of GridNet, which consent shall not be unreasonably withheld, and
further provided that any assignment or transfer without such consent shall
be void.
18. General.
(A) Survival of Terms. The terms and provisions contained in this Agreement
that by their sense and contest are intended to survive the performance
thereof by the parties hereto shall so survive the completion of
performance and termination of this Agreement, including, without
limitation, provisions for Indemnification and the making of any and
all payments due hereunder.
(B) Headings. Descriptive headings in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
<PAGE> 16
(C) Industry Terms. Words having well-known technical or trade meanings
shall be so construed, and all listings of items shall not be taken to
be exclusive, but shall include other items, whether similar or
dissimilar to those listed, as the context reasonably requires.
(D) Rules of Construction. No rule of construction requiring interpretation
against the drafting party hereof shall apply in the interpretation of
this Agreement.
(E) Legal Fees; Collection Expenses. In the event suit is brought or an
attorney is retained by GridNet to enforce the terms of this Agreement
or to collect moneys due hereunder, or to collect money damages for
breach hereof, it shall be entitled to recover, in addition to any
other remedy, reimbursement for reasonable attorneys' fees, court
costs, costs of investigation and other related expenses incurred in
connection therewith.
19. Disclosure. Neither party may issue a press announcement or make such other
public dissemination of information concerning this Agreement without the
express approval of the other party. Such approval shall not be
unreasonably withheld.
20. Entire Agreement. This Agreement consists of (i) all the terms and
conditions contained herein, and, (ii) all documents incorporated herein
specifically by reference. This Agreement constitutes the complete and
exclusive statement of the understandings between the parties and
supersedes all proposals and prior agreements (oral or written) between the
parties relating to Service provided hereunder. No subsequent agreement
between the parties concerning the Service shall be effective or binding
unless it is made in writing and subscribed to by authorized
representatives of Customer and GridNet.
These Data Communications Products and Services Terms and Conditions are hereby
agreed to this day of , 1998.
GridNet International, Inc.
----------------------------------------
By: By:
--------------------------------- ------------------------------------
Its: Its:
--------------------------------- ------------------------------------
<PAGE> 1
EXHIBIT 10.3
STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made and entered
into with the effective date of December 11, 1997 ("Effective Date") by and
between CONTEGO, L.L.C., an Arizona limited liability company ("CONTEGO"), and
GRIDNET INTERNATIONAL, INC., a Delaware Corporation ("GI"). CONTEGO and GI are
at times individually referred to as "Party" or collectively as "Parties".
RECITALS
A. CONTEGO owns a license to sublicense the use of and to provide
services regarding certain public key infrastructure technology ("PKI
Technology").
B. GI owns and operates a communications network and additional
associated hardware and software ("System") which together form the basis for
GI's "Virtual Private Network" service offerings.
C. The Parties desire to enter into an agreement allowing GI to
integrate certain aspects of CONTEGO's PKI Technology into its System, as
described in the attached Exhibit A ("Trusted Domain Service Integration
Overview"), for purposes of providing a new premium authentication service
("Service")
D. The Parties further desire that, for the term of the Agreement,
CONTEGO shall be the exclusive supplier of public key infrastructure
authentication technology offered by or through GI within or in connection with
the System and, except as provided herein, GI and its affiliated companies shall
be the only network operating, primarily in the U.S. through which the Service
will be offered.
E. GI shall market and sell the Service to existing and new users of
the System
F. CONTEGO will, in cooperation with GI, market and sell the Service to
new and existing users of the System through direct and indirect sales channels.
COVENANTS
In consideration of the foregoing, Recitals and the mutual promises,
terms, provisions, conditions, and covenants contained in this Agreement, the
Parties agree as follows:
1. DEFINITIONS.
(a) TRUSTED DOMAIN CLIENT APPLICATION - means the object code
version of The client application developed by Contego used by end-users of the
Service which provides all end-user interfaces for use of the Service and
interfaces with the Trusted Domain Server to effect a cryptographically
authenticated logon of the end-user to the Service.
(b) TRUSTED DOMAIN SERVER - means the object code version of the
server application licensed to GI for integration into the GI System for
provision of the Service which
[*]Material marked throughout this exhibit with an asterisk has been omitted
pursuant to a request for confidential treatment. This material has been
filed separately with the Securities and Exchange Commission.
<PAGE> 2
supports the cryptographic authentication logon dialog with the Trusted Domain
Client Application.
(c) TECHNOLOGY - means those portions of CONTEGO's PKI Technology
which will be integrated into the System, which is limited to the Trusted Domain
Client Application and the Trusted Domain Server.
2. TERM. This Agreement enters into force on December 11, 1997
("Effective Date"). The term of this Agreement shall be for a period of five (5)
years, commencing on the Effective Date ("Initial Term") and shall thereafter
automatically extend for consecutive periods of five (5) years each ("Extension
Periods"), without terminating. unless either Party gives written notice of
intent not to extend at least ninety (90) days before the end of the then
current Initial Term or at least one hundred eighty (180) days before the end of
a then current Extension Period.
3. UNDERTAKINGS.
(a) BEST EFFORTS. GI shall use best efforts to market, advertise,
and sell the Service to Customers, as defined in Section 2(c) hereof, pursuant
to the terms of this Agreement. Such efforts shall be at GI's expense, except as
otherwise provided in this Agreement or in a subsequent writing executed by both
Parties. For purposes of providing appropriate descriptions of the Service and
Technology, GI shall coordinate the content of its marketing, advertising, and
selling activities regarding the Service or any part thereof with CONTEGO.
(b) HARDWARE AND SOFTWARE. GI will provide, maintain and operate all
System hardware and software including all hardware necessary to support the
operation of the Trusted Domain Server. GI will also provide for the normal
day-to-day operation of the Trusted Domain Server in a manner constant with that
which GI sets for other critical network components within the System. GI will
provide additional hardware as required in order to meet the Trusted Domain
Server processing requirements as transaction volume increases. In the event
that operation of the Trusted Domain Server requires any specialized hardware,
this hardware will be provided for by CONTEGO. GI will also provide all
modifications to GI's existing System software necessary in order to support the
Service.
CONTEGO will provide, maintain and operate all hardware and
software necessary to operate the CONTEGO certification authority in support of
the Service offering. CONTEGO will provide additional hardware as required in
order to meet the certification authority processing requirements as transaction
volume increases. CONTEGO will provide all Trusted Domain Server software as
well as all enhancements to this application as may be required from
time-to-time pursuant to the terms of the license as defined in section 4 (a).
(c) SERVICE AGREEMENTS. GI shall enter into agreements with
Customers for the provision of the Service and shall distribute Trusted Domain
Client Application that is to be provided to GI by CONTEGO to Customers entering
into a Service agreement. The provision of Service to Customers shall be under
use of the contract and license terms to be mutually agreed by the Parties and
to be attached hereto as Exhibit C (for Customers and end users subscribing,
through them) and D (for resellers of the Service) except as provided in 4(c).
GI shall refer Cus-
2
<PAGE> 3
tomers to CONTEGO for purposes of obtaining encryption keys and certificates in
order to activate the Service. CONTEGO's provision of the encryption keys and
certificates shall be subject to an agreement with the Customer to be provided
by CONTEGO and CONTEGO shall be entitled to charge additional fees under such
agreement. GI shall convey detailed information regarding all Service agreements
to CONTEGO in writing within seven (7)-days of execution, and shall include the
Customer's name, mailing address, date of the agreement, list price of service
sold, volume discount schedule offered, and Customer number. GI warrants that
all agreements conveyed to CONTEGO are by parties qualifying as lawful
recipients of the Service under U.S. law, including without limitation, export
regulations, and as customers of the System under contractual arrangements with
GI ("Customers").
(d) PAYMENT. In consideration of CONTEGO's efforts regarding the
Service pursuant to this Agreement, GI shall remit to CONTEGO a certain
percentage of gross proceeds received by GI from the Customers using the
Service. As the price GI charges the Customer for usage decreases in accordance
with a discount schedule, the dollars CONTEGO will receive from the bundled
service shall also decrease; provided, however that the amount to be paid to
CONTEGO shall not decrease below a minimum dollar amount to be mutually agreed
upon by the parties. CONTEGO shall have the right to change the percentage of
its fee as it deems necessary so long as GI is given notice sixty (60) days in
advance of the change. Such change shall be applicable with regard to receipts
from those Customers signing up for the Service after the sixty (60) day period
and for new end users of existing Customers signing up for the Service after the
sixty (60) day period. GI will remit payment to CONTEGO within ten business days
of receipt of payment from a customer using, the service. Payment shall be
remitted together with the accounting to be provided pursuant to Subsection (e).
(e) ACCOUNTING. GI shall submit on or before the 15th day of each
month a combined account of all Service use during the previous calendar month,
listing Customer number, name and address of the Customer, and usage of each
Customer account, and payment remitted to CONTEGO as to each Customer account in
digital format. CONTEGO shall, upon request, be provided with reasonable
documentation as to Customer accounts involving the Service.
(f) AUDIT.
(i) GI shall maintain complete, clear and accurate records of
all revenue related to the Service (the "Revenue Records"). GI shall retain
originals or copies of all correspondence related to origination of such sales
or revenues. GI will retain its Revenue Records for a period of not less than
three (3) years from the date of their preparation.
(ii) CONTEGO shall have the right to have an inspection and
audit of the Revenue conducted by independent certified public accountants (or
by a mutually agreeable party) (the "Auditor"), which inspection and audit shall
be conducted during regular business hours at the offices of GI and in such a
manner as not to interfere with GI's normal activities. The Auditor may be
required to sign a confidentiality agreement in a form containing terms and
conditions customarily found in such agreements. CONTEGO shall be responsible
for the fees and costs of the Auditor. If such audit shows that any of the GI's
reports understated the actual amounts due to CONTEGO by more than five percent
(5%), then GI shall pay to CONTEGO all
3
<PAGE> 4
reasonable costs and expenses which may be incurred by CONTEGO in conducting
such audit and collecting such underpayment.
(g) CUSTOMER ASSISTANCE.
(i) CONTEGO is responsible, at its expense, for provision of
"second level technical assistance" for GI and GI's wholesale customers in
support of the Service provided pursuant to this Agreement. This support will be
provided during CONTEGO's normal business hours. For the purposes of this
agreement. "Second level technical support" is limited to assistance in the
resolution of product "bugs" or technical issues which could not be resolved by
appropriately trained first level technical support personnel.
(ii) GI and/or GI's customers shall be responsible, at their
expense, for first level customer support and Service inquiries. For the
purposes of this agreement, "first level customer support" will include all
end-user registration and installation assistance, as well as end user
assistance for all normal product education and operation. First level customer
support will also include registration authority operational responsibility in
support of Customers. CONTEGO will license GI and GI's customers for the
registration authority application for an initial setup charge and monthly
license fee to be set by CONTEGO.
(iii) CONTEGO reserves the right to offer "first level support"
services on a contract basis to GI and other Service Customers.
(h) LITERATURE AND MATERIALS. CONTEGO will furnish GI at no charge
with reasonable quantities of non-proprietary sales aids, Technology briefs,
brochures and similar literature and materials normally made available at no
charge with respect to CONTEGO Technology. However, GI shall incorporate
information regarding the Service into its Customer literature and materials and
its web sites at GI's cost. CONTEGO manuals and other materials will be
available to GI at CONTEGO's cost. The Parties shall mutually agree upon the
content and planning of press releases announcing the Service.
(i) TRAINING AND ASSISTANCE. CONTEGO will provide GI with initial
familiarization and sales training, with respect to the Service, at no charge
for up to a maximum of three (3) such training sessions to be held at a location
reasonably designated by GI. CONTEGO will provide GI with additional sales
training upon GI's request and GI agrees to reimburse CONTEGO for the cost of
such training. CONTEGO shall have the option to participate, at its cost, in
trade shows attended by GI.
4. LICENSE.
(a) GRANT. For the term of this Agreement and subject to its
provisions, CONTEGO grants to GI and GI accepts, non-exclusively, a) the right
to contract for the use of the Service by existing and new Customers, (b) the
license to use certain software and hardware provided by CONTEGO for purposes of
integration of the Trusted Domain Server into the System and its utilization
pursuant to the terms of this Agreement, (c) the right to reproduce and
distribute copies of the Trusted Domain Client Application solely pursuant to
the end user agreement to be added to the Agreement as Exhibit C and solely to
Customers, (d) to use the Trusted Domain Server, solely internally for the
purpose of providing the Service on the System,
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<PAGE> 5
(e) to sublicense resellers (pursuant to the reseller agreement to be added to
this Agreement as Exhibit Do to reproduce and distribute the Trusted Domain
Client Application solely to Customers and (a the right to use CONTEGO's
trademarks identified in Exhibit B hereto for such purposes.
(b) EXCLUSIONS. No other right or license is granted by CONTEGO to
GI. either express or implied. GI agrees to integrate the Technology into and
market the Service as part of the System in the regular course of its business
and to obtain use of the Technology from CONTEGO under this Agreement solely for
incorporation into its System. Any Technology integrated shall remain the sole
property of CONTEGO and GI does not acquire any rights in the Technology as a
consequence of such integration into its System, except for the license
expressly granted herein. GI shall not sell, distribute, lease, or otherwise
directly or indirectly provide the Service to any other party than Customers,
unless CONTEGO has given prior written permission. The rights stated in
Subsection (a) are nondivisible, nonassignable, and non-sublicensable, except as
expressly provided in such Subsection (a). GI shall not use CONTEGO's trademarks
in any manner not specifically authorized by this Agreement. No license is
granted hereunder for publicity purposes, in combination with other products or
services, as gifts or giveaways, as premiums used for the purpose of
publicizing, promoting, or increasing sales of any other products or services,
or in connection with any similar method of merchandising, except with prior
written permission obtained from CONTEGO. CONTEGO retains all rights not
expressly and exclusively conveyed to GI hereunder, and, except as expressly
stated herein, CONTEGO may use or grant licenses to others. The appointment
contained herein does not constitute a grant of any specific territory or
geographic area.
(c) RESERVED MARKETING RIGHTS. CONTEGO reserves the right to market
and solicit sales of any aspect of PKI Technology and the Service directly,
through other distributors, and through any other channel of distribution at any
time and from time to time in CONTEGO's business or otherwise as in CONTEGO's
sole judgment CONTEGO deems desirable, and GI will not be entitled to any
commission, discount or any other compensation with respect to or on account of
such sale. CONTEGO shall further have the right to sell any other PKI Technology
related product, or service that is not integrated into the System, directly to
Customers and GI shall not be entitled to any compensation for such direct
sales. In case GI wishes to itself engage in sales of such services and
products, the Parties shall in good faith negotiate and execute a separate
agreement regarding the terms thereof.
5. MOST FAVORED TREATMENT. Notwithstanding anything in this Agreement
to the contrary, during the term of the Agreement, with the exception of EQUANT,
CONTEGO shall not integrate its Technology into the network system of any other
network provider operating primarily in the U.S. Further, GI shall be
automatically availed the most favorable wholesale price terms CONTEGO maintains
with any other party, for comparable quality and volume of service, if such
terms are more favorable than provided in this Agreement. For the term of this
Agreement, GI shall not sell, market, endorse, recommend or integrate into its
System any other authentication using any type of PKI technology and CONTEGO
shall be the sole provider of digital keys and certificates to GI and/or its
Customers.
6. TAXES. GI shall be solely responsible for and pay all federal,
state, county, local and other government taxes, duties, or excise taxes, in
connection with the sale, licensing, or use
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<PAGE> 6
of the Service. Without limitation, GI shall receive and remit all applicable
transaction and sales tax regarding the provision of the Service to Customers.
7. CUSTOMER WARRANTY. GI will enclose, as part of every Service
agreement, a limited warranty to be prepared by the Parties and to be included
in Exhibit C and D ("Warranty"). Such Warranty shall not require any duties of
CONTEGO in excess of the warranty provided in Section 7 hereof. GI and CONTEGO
agree to fulfill their respective responsibilities under the Warranty. The
Parties agree that the Warranty furnished by GI is the only warranty to be made
with respect to Customers or third parties.
8. WARRANTY TO GI. CONTEGO warrants that, during the term of
contractual authorization by CONTEGO to use the software and Service, the
software and Service will, during normal use within the operating environment
designated in documentation provided by CONTEGO ("Documentation"), substantially
conform to the functions detailed in the Documentation. CONTEGO does not warrant
(a) that the software or Service is error-free, (b) use of the software or
Service will be uninterrupted, (c) the software or Service will meet GI's
requirements or be fit for any particular purpose required by GI other than as
set out in the Documentation, (d) the software or Service will operate in
combination by any means and in any form with any computer hardware or software
not documented for such use in the Documentation, or not specifically approved
in writing for such use by CONTEGO, or (e) the software or Service will provide
any function or adequately perform in any operating environment not designated
in the Documentation. CONTEGO may at its sole option correct, replace, or
discontinue the defective software or Service or defective portions thereof and
the night to have CONTEGO exercise that option shall be the only recourse under
this warranty. THIS WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY. THERE SHALL BE
NO OTHER WARRANTIES EXPRESS OR IMPLIED REGARDING THE SERVICE, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR USE OR PURPOSE OR
NONINFRINGEMENT OF THIRD PARTY RIGHTS.
9. LIMITATION OF LIABILITY. IN NO EVENT SHALL CONTEGO BE LIABLE FOR ANY
LOSS, EXPENSE, OR DAMAGE, DIRECTLY OR INDIRECTLY, BASED ON CLAIMS BY GI OR GI'S
CUSTOMERS, OR ANY THIRD PERSON, ARISING FROM THE USE OR INABILITY TO USE THE
SERVICE FOR ANY PURPOSE, OR FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
EVEN IF INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.
10. CHANGES TO TECHNOLOGY. CONTEGO shall have the right to change the
design and/or specification of the PKI Technology, the Trusted Domain Service
Software, the Trusted Domain Client Application, or hardware at any time.
CONTEGO shall have the right to decrease the number and types of Technology
available hereunder or to discontinue the availability of any or all such
Technology without liability to CONTEGO upon sixty (60) days prior written
notice to GI.
11. TRADEMARKS. GI agrees that it will properly identify CONTEGO's
trademarks on all Service related materials and end-user applications referring
thereto. GI shall add a "TM" to each and every use of the trademarks. However,
GI shall not affix or use CONTEGO's trademarks or a "TM" without CONTEGO's prior
written approval, nor shall GI use any other
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<PAGE> 7
trademark or trade name in connection with the Service without CONTEGO's prior
written approval, nor shall GI use any part or modification of CONTEGO's name,
other trademarks, trade dress, or similar rights, without CONTEGO's prior
written approval. Should, during the term, in CONTEGO's sole discretion, the
need arise to replace any of the trademarks or trade names by another trademark
or trade name of CONTEGO to be licensed under this Agreement, GI will, at the
expense of CONTEGO, cooperate and do such acts as are reasonably requested by
CONTEGO to assist such replacement, including but not limited to the
modification of this Agreement to reflect the replacement. In addition, CONTEGO
may, at any time increase or decrease the number of trademarks or trade names,
or otherwise change the trademarks or trade names licensed under this Agreement
by written notice.
12. COPYRIGHTS. GI agrees that it shall not at any time during or after
the term of this Agreement claim any title to any trade secret. proprietary or
confidential information, copyright, patent, or other intellectual property
right CONTEGO or CONTEGO's licensor has in the Service or the Technology, and
title therein shall remain exclusively in CONTEGO and/or CONTEGO's licensor. GI
furthermore agrees that it does not, and shall not at any time during or after
the term of this Agreement claim any title to any programs, methods of
processing, the specific design, screen formats, and structure or interaction
employed as to the Service, Technology, adaptations of Technology, or any part
thereof, and those rights shall remain exclusively in CONTEGO and/or CONTEGO's
licensor. GI shall reproduce and include CONTEGO's copyright and/or trade secret
notices on all copies and adaptations in any form of the Service.
13. TRANSFER OF RIGHTS. In case GI obtains a title or right in
violation of Sections 11 or 12, GI shall at any time during or after the term of
this Agreement promptly do such acts and execute, acknowledge, and deliver all
documents that may be necessary or desirable, in the sole discretion of CONTEGO,
to obtain, maintain, protect, and/or vest in CONTEGO and/or CONTEGO's licensor
the entire right, title, and interest in connection with the rights affected.
14. TERMINATION. Each Party may terminate this Agreement upon the
occurrence of any of the following events:
(a) INSOLVENCY. Except as may be prohibited by the bankruptcy laws
of the United States, in the event of the other Party's insolvency or its
inability to pay debts as they become due, or the filing of a voluntary or
involuntary bankruptcy proceeding by or against such other Party, or the
appointment of a receiver or assignee for the benefit of such other Party's
creditors.
(b) BREACH. A party fails to perform any substantial obligation
herein to be performed on its part, unless such breach is cured within twenty
(20) days following written notice by the other Party.
15. WINDING DOWN. Upon expiration or termination:
(a) All rights granted to GI under this Agreement shall
automatically revert to CONTEGO and GI shall execute any and all documents
required by CONTEGO to evidence the automatic reversion.
7
<PAGE> 8
(b) GI shall, without delay, return to CONTEGO all software,
hardware, and any other materials and documentation provided by or on behalf of
CONTEGO relating to the Service. GI shall cease to order, sell or market the
Service or any part thereof. GI agrees to make no use of CONTEGO's trademarks
whatsoever, including, without limitation, regarding the Service or in
advertising, publicity, promotional or display materials, and GI shall, in
CONTEGO's discretion, either deliver to CONTEGO all patterns, proofs, and any
materials that reproduce the trademarks or give to CONTEGO satisfactory proof of
their destruction.
(c) All sublicenses to Customers shall be assigned to CONTEGO
16. INDEMNIFICATION, HOLD HARMLESS.
(a) CONTEGO INDEMNITY. CONTEGO agrees to defend, indemnify and hold
GI harmless against any and all damages, costs, liabilities, expenses and
settlement amounts incurred in connection with any suit, claim, or action by any
third party, arising prior to termination of this Agreement, alleging that, as
of the Effective Date of this Agreement, the Trusted Domain Client Application
or the Trusted Domain Server (the "Software") infringes any U.S. patent or
copyright or trade secret enforceable in the U.S. The foregoing indemnity
obligation shall not extend to any claims of infringement arising out of or
related to (i) a modification of the Software by anyone other than CONTEGO; (ii)
a combination of the Software with any third party software or hardware where
such combination is the cause of such infringement, including without
limitation, the System; or (iii) the use of a version of the Software other than
the then-current version if infringement would have been avoided with the use of
the then-current version. CONTEGO's obligation to indemnify hereunder is subject
to GI (i) giving CONTEGO prompt written notice of any such claim; (ii) giving
CONTEGO sole control over the defense and settlement of any such claim; (iii)
providing full cooperation for the defense of any such claim, at CONTEGO's
expense; and (iv) not entering into any settlement or compromise of any such
claim without CONTEGO's prior written approval. In the event the Software is
held or are believed by CONTEGO to infringe any third party rights, CONTEGO may,
at its sole option and expense, elect to (i) modify infringing Software so that
they are non-infringing; (ii) replace the infringing Software with
non-infringing Software which are functionally equivalent or superior in
performance; (iii) obtain a license to continue to use the Software, as
applicable, as provided hereunder; or (iv) terminate the license for the
infringing Software. THE RIGHTS GRANTED TO GI UNDER THIS SECTION SHALL BE GI'S
SOLE AND EXCLUSIVE REMEDY FOR ANY ALLEGED THIRD PARTY INFRINGEMENT OF ANY
PATENT, COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHTS.
(b) GI INDEMNITY. GI agrees to defend, indemnify and hold CONTEGO
harmless against any and all damages, costs, liabilities., expenses and
settlement amounts incurred in connection with any suit, claim, or action by any
third party (i) alleging that the System infringes any copyright, patent,
trademark, trade secret or other proprietary right or (11) against CONTEGO as a
result of (a) the distribution of the Software; (b) negligence,
misrepresentation, error or omission on the part of GI or its representatives
relating or concerning the Software or the Trusted Domain Service; or (c) GI's
breach of its obligations under Section 19 ("Export"). GI's obligation to
indemnify CONTEGO pursuant to this paragraph is subject to CONTEGO giving GI
prompt written notice of any such claim; (ii) giving GI sole control over the
defense and settlement of any such claim; (ill) providing full cooperation for
the defense of any such
8
<PAGE> 9
claim, at GI's expense; and (iv) not entering into any settlement or compromise
of any such claim without GI's prior written approval. THE RIGHTS GRANTED TO
CONTEGO UNDER THIS SECTION SHALL BE CONTEGO'S SOLE AND EXCLUSIVE REMEDY FOR ANY
ALLEGED THIRD PARTY INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER
PROPRIETARY RIGHTS.
17. INFORMATION. The Parties shall provide each other with all
information reasonably needed for carrying out their obligations under the
Agreement, and shall promptly answer any reasonable request for information made
by the other Party. Without limitation, GI shall exercise due diligence to keep
CONTEGO informed about GI's and Customers' activities, market conditions and the
state of competition.
18. LEGAL COMPLIANCE. It shall be GI's sole responsibility to conform
its marketing and sale of the Service with the laws, regulations, and standards
applicable. Without limitation, GI's shall provide, at its expense, all required
permits for applying the Service to its System. Except as stated herein, the
Parties will comply with all laws, regulations and other legal requirements that
apply to them under this Agreement, including tax regulations.
19. EXPORT. GI acknowledges that the laws and regulations of the United
States and Australia restrict the export and re-export of certain commodities
and technologies of the respective country's origin, including cryptographic
software, in any medium. GI agrees that it will not knowingly, without prior
authorization if required, export or re-export restricted technologies, either
directly or through resellers, in any medium without the appropriate United
States and/or foreign government licenses. GI further warrants that it shall not
engage in any acts or omissions causing or constituting a violation of licensing
agreements between CONTEGO and its licensor or the RSA licenses applicable to
CONTEGO as these agreements and licenses are disclosed to GI from time to time.
20. CONFIDENTIALITY. GI shall keep the non-public descriptions,
specifications, and plans relating to the Service and its underlying technology
confidential and as a trade secret. The Parties further agree to keep all
non-public information related to the business of each other, including but not
limited to CONTEGO's PKI Technology, the Technology, the Service, and technology
sources, the Parties' strategies, planning information, marketing, existing and
potential customers. financial information, and any other non-public records
(all of the above collectively "Confidential Information") confidential and
agree not to disseminate or allow dissemination of any such Confidential
Information to third parties during and after the term of this Agreement, except
as may be required by law or as reasonable to exercise a Party's rights and
duties under this Agreement under similar confidentiality requirements. The
Parties understand that dissemination of the Confidential Information would be
detrimental to the other, and that the Confidential Information is the exclusive
property of the other. The Parties agree that they shall not, at any time,
directly or indirectly furnish or divulge any Confidential Information to any
person or entity, or use Confidential Information in any way, except to the
extent necessary for the fulfillment of this Agreement or its purposes. Upon
termination of this Agreement, the Parties shall immediately return to each
other all Confidential Information belonging to the other, including., but not
limited to, computer readable disks or tapes, originals and copies of any of any
drawings, documents, records, reports, notes, memoranda, customer lists, plans,
and any other document containing Confidential Information. The confidentiality
clause contained in this Sec-
9
<PAGE> 10
tion is reasonable and necessary to protect the legitimate interests of the
Parties and any violation thereof will result in an irreparable injury to the
other Party. The Parties agree that in the event of any violation of this
Section by one Party, the other shall be entitled to injunctive relief and
damages, which remedies shall be cumulative and in addition to any other rights
or remedies to which such other shall be entitled.
21. GENERAL PROVISIONS.
(a) NOTICES. All notices, requests, demands and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given to a Party only if the
notice is faxed to such Party's telefax. number set forth below and delivered by
second day delivery, addressed as set forth below. Notwithstanding the above,
the notice shall be effective at the time the fax transmission is received:
To CONTEGO: (650) 286-4122 To GI: (770) 998-9096
Any Party may change its address or fax number by giving notice of such changes
in conformity with the provisions of this Subsection for the giving of notice.
(b) WAIVER. No waiver of any provision of this Agreement shall be
valid unless it is in writing and signed by the Party against whom or which it
is sought to be enforced. No waiver of any provision of this Agreement at any
time shall be deemed a waiver of any other provisions of this Agreement at such
time or of the same provision at any other time.
(c) INDEPENDENT PARTIES. CONTEGO and GI are independent parties.
Nothing herein shall be construed to make GI an agent, employee, franchisee,
joint venturer, partner or legal representative of CONTEGO. Except as otherwise
provided in this Agreement, GI will neither have nor represent itself to have
any authority to act on CONTEGO's behalf and may not assume any obligation of
any kind, implied or expressed on behalf of CONTEGO. In no event shall this
Agreement confer any right or benefit onto any person or entity that is not a
Party to this Agreement.
(d) FORCE MAJEURE. Neither Party will be liable for any failure or
delay in performing an obligation under this Agreement that is due to causes
beyond its reasonable control, including but not limited to governmental acts or
omissions, laws or regulations, failure to obtain or maintain government
licenses or licensing agreements with third parties for any reason, defaults or
breaches of contract by third parties, natural catastrophes, acts of war, labor
strikes or difficulties. If any of these causes continue or are reasonably to be
expected to continue to prevent or delay performance for more than 90 days, a
Party shall have the right to terminate this Agreement.
(e) SURVIVAL. The provisions of Sections 3(d) (as to payment
obligations), 3 (e)(as to accounting obligations), 4(b), 6, 8, 10 through 12,
and 14 through 21 shall survive the termination of the Agreement.
(f) GOVERNING LAW. This Agreement shall be construed pursuant to
the laws of the United States and the State of California.
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<PAGE> 11
(g) MODIFICATION; AMENDMENT. No modification or amendment of this
Agreement shall be binding unless it is in writing and signed by all of the
Parties hereto.
(h) ASSIGNMENT OF AGREEMENT. Except as stated herein, this
Agreement or any part thereof shall not be assignable without the other Party's
written approval. Any attempt to do so without the other Party's approval shall
be void. Notwithstanding the above, the Parties shall have the right to assign
this Agreement without any prior approval to any successor pursuant to a merger
or consolidation of a Party or the sale of all or substantially all of a Party's
business assets, provided that such successor undertakes to fulfill all
obligations of the assigning Party under this Agreement. Additionally, a Party
shall have the right to assign this Agreement or delegate its obligations
hereunder to any affiliate, provided that the assigning Party guarantees the
obligations to be performed by such affiliate. For purposes of this Agreement,
the term "affiliate" shall mean any corporation or business entity controlled
by, controlling, or under common control with such Party. This Agreement shall
be binding upon and inure to the benefit of the Parties' successors and assigns
to the extent assignment is permitted under this Subsection.
(i) ENTIRE AGREEMENT OF PARTIES. This Agreement contains the entire
agreement and understanding among the Parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
(j) ARBITRATION.
(i) General. Any dispute arising, out of or in connection with
the present Agreement shall be finally settled by compulsory arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"), as modified or supplemented under this Section; provided,
however, that in the event of any such controversy or claim, (I) neither Party
will initiate arbitration within the first thirty (30) days after the aggrieved
Party first notifies the other Party of the controversy or claim and (ii) during
such 30-day period, the chief executive officers or designated representatives
of both Parties shall convene in San Francisco, California, U.S.A. to endeavor
in good faith to amicably resolve the controversy or claim.
(ii) Proceeding. To initiate arbitration, either Party shall
file the appropriate notice at the Regional Office of the AAA in San Francisco,
California, U.S.A. The arbitration proceeding will take place during a period
not exceeding two (2) days by telephonic conference call, and will consist of
one (1) arbitrator appointed by the AAA. Any communication between a Party and
the arbitrator will be directed to the AAA for transmittal to the arbitrator.
The Parties expressly agree that the arbitrator will be empowered to (1) issue
an interim order or award and (ii) grant injunctive relief.
(iii) Award. The arbitration award shall be the exclusive
remedy of the Parties for all claims, counterclaims, issues or accountings
presented or plead to the arbitrator. The award will (i) be granted and paid in
U.S. Dollars exclusive of any tax, deduction or offset and (ii) include interest
from the date of breach or other violation of the Agreement until the
11
<PAGE> 12
award is fully paid, computed at four percent (4%) over the then current prime
rate provided by Bank of America. Judgment upon the arbitration award may be
entered in any court that has jurisdiction thereof. Any additional costs, fees
or expenses incurred in enforcing the arbitration award will be charged against
the Party that resists its enforcement.
(k) REMEDIES. The rights and remedies provided for in this
Agreement shall not be mutually exclusive, nor shall they be exclusive of any
other remedies.
(l) ATTORNEY FEES. In the event of any adversarial proceeding
between the Parties with respect to this Agreement or the transaction
contemplated by this Agreement, the prevailing Party shall be entitled to
reasonable attorney's fees, expenses, and costs incurred therein from the other
Party.
(m) SEVERABILITY. If any provision of this Agreement is declared
void or unenforceable or contrary to mandatory law, such provision shall be
deemed severed from this Agreement to the extent affected and this Agreement
shall otherwise remain in full force and effect and shall be construed to effect
the objectives stated in this Agreement to the largest extent permissible by
law. However, if a Party reasonably deems a provision severed essential to this
Agreement, that Party shall have the right to terminate this Agreement.
(n) AUTHORITY TO BIND. Each person executing this Agreement hereby
warrants that the person has full and legal authority to execute this Agreement
for and on behalf of the respective Parties and to bind such Parties.
(o) JOINT RESPONSIBILITY. Each Party is willing to and does assume
joint responsibility for the form and composition of each and all the contents
of this Agreement, and further agrees that this Agreement and its Exhibits shall
be interpreted as though each of the Parties participated equally in the
composition of this Agreement, its Exhibits, and each and every part thereof.
(p) UNITED STATES GOVERNMENT. The Trusted Domain Client Application
and the Trusted Domain Server are "commercial computer software", as such term
is used in 48 C.F.R. 12.212 of the Federal Acquisition Regulations ("FAR") and
its successors and 48 C.F.R. through 227.7202-4 (June 1995) of The Department of
Defense FAR Supplement and its successors. All U. S. Government customers
acquire the Trusted Domain Client Application only with the rights set forth in
The applicable end user agreement.
(q) CAPTIONS. The captions of Sections and Subsections contained in
this Agreement are for convenience of reference only, and they neither form a
part of this Agreement nor are they to be used in the construction or
interpretation hereof
(r) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and if executed in counterpart by all required Parties, each
executed copy shall be deemed an original, but all counterparts together shall
constitute one and the same agreement.
(s) TIME IS OF THE ESSENCE. In the performance of any and all of
the terms, covenants, provisions, warranties, and conditions of this Agreement,
time is of the essence.
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<PAGE> 13
IN WITNESS WHEREOF, the Parties have executed this Agreement the day,
month and year set forth beneath their signatures below.
CONTEGO, L.L.C. GRIDNET INTERNATIONAL
Date: 12/12/97 Date: 12/11/97
By: /s/ Keith R. Dennis By: /s/ Lee Provow
-------------------------------- --------------------------------
as its authorized representative as its authorized representative
13
<PAGE> 14
EXHIBIT A
"Trusted Domain Service" Integration Overview
The following is a high-level overview of how the Contego network authentication
is currently intended to be Integrated into the existing GridNet System to
enable the provision of the "Service". This design may change for any number of
reasons, and is provided here only for information purposes.
Existing Components:
NETWORK ACCESS SERVER - This is the dial-up entry point for clients attempting
to access the GridNet VPN. The Access Server manages various widely used client
authentication authorization protocols such as CHAP and PAP, and communicates
with back-end Authentication Servers using both TACACS and RADIUS. It's worth
noting that GridNet must support a heterogeneous mix of vendors for this
component including; CISCO. Ascend Communication and possibly others.
BABY - This system serves primarily as a front end to the Tandem Security
Servers. By implementing an efficient (proprietary) protocol between the BABY
and the Tandems, GridNet can realize performance efficiencies, but for all
practical purposes, this box is transparent to our implementation.
TANDEM SECURITY SERVER - This is the system which is responsible for managing
user databases as well as authentication, authorization and accounting for all
network usage. This system directs the Access Server as to who to allow on the
network, where to let them go, and what to allow them to do. All permissions are
based on the customer's and end-user's profiles, maintained in the local
database. There are multiple Tandems distributed at the GridNet supernodes
providing redundancy and fail-over to assure continuous availability. The user
databases are updated in near real-time.
GRIDNET NETWORK ACCESS CONTROL (GNAT) - This system's primary role is one of IP
address translation, which is the foundation of the GridNet VPN scheme. Once an
address translation is configured into it (which is done at log-on time), all
packets have their IP addresses translated as they pass through the GNAT.
NEW COMPONENTS:
TRUSTED DOMAIN CLIENT APPLICATION - This is the Contego specific Win95
application which will interface to the Windows WIN32 API which will support a
PPP server connection to the GridNet network and interface with the Trusted
Domain Server. The TD-Client provides the end-user interface and will perform a
two-phase logon to the GridNet - first, a simple PAP or CHAP logon, which if
successful will then complete a second cryptographically authenticated logon
through the Trusted Domain Server.
TRUSTED DOMAIN SERVER - This is a server application built on top of SECURserver
or SECURuser. This server will perform the second cryptographically
authenticated logon dialog with the
A-1
<PAGE> 15
Trusted Domain Client Application using a proprietary protocol. It will also
communicate with the GNAT to set up, and change, IP address translations for the
sessions it has authenticated.
SERVICE ID - The Service ID is a designator [*] the UserID which is assigned to
each user configured in the GridNet User Database. The Service ID is [*]. This
Service ID is used by the GNAT to determine what IP address or range of IP
addresses a user will be granted access to within a specific VPN. A single user
may have multiple Service ID's.
The following diagram is provided as a reference for the authentication and
authorization sequence to follow:
[DIAGRAM - [*]]
1. The Trusted Domain Client Application will initiate the logon request,
requiring the user to enter their user ID, [*] and password. From the
user's perspective this is no different than what is done today. This
service identifier information [*] file delivered to the end user when
they are registered for the "Trusted Domain" (TD) Service. The Contego
client application will retrieve this information from the file when
the certificate is imported.
2. The Access Server will support the existing authentication protocols
(e.g. PAP, CHAP) [*], and will request user authorization [*].
3 Based upon the service identifier, [*] and will respond to the
Contego client, assigning a [*] IP address to the client
application.
4. The [*] sends [*] with [*] address and [*] addresses as parameters [*].
The [*] address will be the [*] address assigned to the client
application. This tells [*] from a client with the specified IP
address. The [*] address is the address [*] to the client within the
VPN once the client has been authenticated by the [*] Server. In
addition, [*] a service to this session that will only allow the new
user to access the [*] of the [*] Server.
A-2
<PAGE> 16
5. Upon receipt of the [*], the Contego client will initiate a [*]. This
is [*] the Contego client application with no additional input required
by the user. This application request will be routed to [*] which has a
[*]. This is the [*] application [*] at this point.
6. The [*] responds to the client application [*].
7. The [*] application [*] and [*] the [*] with the user's [*] and sends
it [*] to the [*].
8. The [*] verifies the [*] from the [*].
If the [*] is [*]:
The [*] sends [*] to [*] with the [*] for this [*] along with the [*] with a [*]
to the front of the [*].
IF THE [*] IS [*]:
The [*] sends [*] to [*] with [*] and [*].
A-3
<PAGE> 1
EXHIBIT 10.6
[ALTIGA NETWORKS LOGO]
ALTIGA NETWORKS INC.
AUTHORIZED DISTRIBUTOR AGREEMENT
between Altiga Networks Inc.
124 Grove Street
Franklin, MA 02038
("MANUFACTURER" OR "We")
and Intelispan, Inc.
14505 North Hayden Road
Suite 300
Scottsdale, Arizona 85260
("Distributor" or "You")
Effective date: June 23, 1999
Altiga Networks Inc., ("MANUFACTURER"), and Distributor agree that the following
terms and conditions will govern the sale, licensing, distribution and support
of the data communications Products covered by this Agreement. All schedules
and other appendices attached to this Agreement are incorporated in its terms.
Section 1. Scope of Agreement
1.1 During the term of this Agreement, we appoint you as an
Authorized Distributor of the Products ("Products") listed on Schedule A,
Authorized Distributor Price Schedule. You may also bundle and/or integrate the
Products with your own services and products. Schedule A may be amended from
time to time by mutual agreement.
1.2 In qualifying as an Authorized Distributor, you have demonstrated
the capability to add substantial value, such as network system analysis,
design or implementation. We rely on your technical expertise in making this
appointment. You understand that you must maintain this capability to continue
as an Authorized Distributor. Your ability to perform agreed upon pre- and
post-sales support and service to your customers is material to this contract;
if you are unable to meet those responsibilities, then we may terminate this
Agreement as specified in Section 2, below. Also, in order to ensure adequate
technical and marketing support to end users, your eligibility to resell
selected Products may be subject to certain reasonable registration or
certification criteria mutually agreed to.
1.3 This Agreement is a non-exclusive one; you acknowledge that we
are free to
[*]Material marked with an asterisk throughout this exhibit has been omitted
pursuant to a request for confidential treatment. This material has been
filed separately with the Securities and Exchange Commission.
1
<PAGE> 2
[ALTIGA NETWORKS LOGO]
appoint additional distributors in the Territory, use other distribution
channels, or furnish the Products to any customer in any territory without
being liable to you for doing so.
1.4 MANUFACTURER and Distributor agree that your primary area of
responsibility for the sale and distribution of the Products will be:
United States
-------------
("the Territory"). You are free to distribute the Products outside the
Territory within the United States. But you agree that your sales performance
will be measured by sales goals for the Territory, and you are expected to
concentrate your sales activities within it.
1.5 You agree you will not sell the Products outside the US or export the
Products, documentation or technical data furnished to you under this
Agreement. You will bear sole responsibility for any violation by you of any
laws, regulations or export controls which may occur in connection with any
such sales or exports. In addition, you understand and agree that the prices
offered in this Agreement are contingent upon Products being used, sold or
resold only in the United States.
1.6 When ordering the Products, your purchase order should reference this
Agreement and provide the following information: (a) the model number or
product code; (b) quantity; (c) price and/or license fees; (d) requested
shipping date; (e) list of accessory items, if any; (f) delivery instructions,
including ship-to address; and (g) any other special information required by
this Agreement. Each of your purchase orders and each of our acknowledgement
forms will incorporate the terms of this Agreement, whether or not this
Agreement is specially mentioned.
1.7 Each of your orders will be subject to our acceptance. All orders are
subject to availability of the Products, and we reserve the right to reject any
order if we cannot fulfill it. If we accept your purchase order we will send
you a MANUFACTURER acknowledgement. Once we have accepted your order, you
cannot cancel or reschedule it except under the conditions expressly stated in
this Agreement.
1.8 We reserve the right to modify any of the specifications or
characteristics of the Products, to remove any product from the market, and/or
to cease manufacturing or supporting it.
Section 2. Term and Termination
2.1 Term of Agreement. This Agreement will begin on the Effective Date
listed above and will continue for 12 months unless terminated earlier in
accordance with its terms. After the first 12 months, the Agreement will be
renewed for additional 12-month terms, unless either party provides 30 days
prior written notice of its intent to terminate. Applicable terms and
conditions of this Agreement will continue to apply until the completion of
their intended purpose.
2
<PAGE> 3
[ALTIGA NETWORKS LOGO]
2.2 Termination. Either of us may terminate this Agreement at any time
for any reason by giving at least 120 days prior written notice to the other.
If we terminate this Agreement for our convenience (and not because of your
default), we will honor any accepted purchase orders which you may have
submitted prior to our notice of termination if they provide for delivery not
more than 90 days after termination of the Agreement. Except as expressly
stated in this Agreement, neither party will be liable to the other for any
damages or compensation due to the termination of this Agreement, provided such
termination is in accordance with this Agreement. Termination may also occur as
specified in Section 15, below.
Section 3. Distributor's Responsibilities
3.1 You agree to:
(a) use your reasonable commercial efforts to actively promote the sale of
Products in the Territory and to meet or exceed the written sales goals
which we mutually establish;
(b) maintain adequate, well-trained sales and technical organizations to assure
reasonable distribution and market penetration in the Territory;
(c) offer or sell the Products only with our product specifications and not make
any claims or representations about the Products other than those contained
in the current product literature we furnish you;
(d) promote the sale of the Products and your association with MANUFACTURER
through all appropriate media, including trade show exhibits, catalog and
direct mailings, advertising and sales aids and clearly acknowledge
Manufacturer's name in connection with advertising and marketing, where such
attribution is commercially reasonable. This provision does not preclude You
from privately branding your services that include the Products;
(e) carry at least the minimum level of demonstration Products and inventory
that we agree to so that you can demonstrate the Products and respond to
customer requests for immediate delivery; and
(f) maintain accurate and detailed records of sales of the Products and provide
same to Manufacturer, promptly upon request, records will include customer
name, address, date of purchase, quantities and prices of products sold;
(g) provide adequate storage for the Products conforming to Manufacturer's
reasonable requirements;
(h) will not appoint sub-distributors unless approved by Manufacturer in advance
and in writing, except that your third-party reseller channel may sell your
bundled products and
3
<PAGE> 4
[ALTIGA NETWORKS LOGO]
services that integrate our Products without such approval being necessary;
(i) keep a sufficient quantity of inventory of Products to meet reasonable
anticipated orders;
(j) comply with all applicable laws and regulations.
Section 4. Manufacturer's Support Responsibilities
4.1 We agree to:
(a) supply you with reasonable quantities of catalogs, product
brochures, manuals and other publications to assist your sale of the Products,
which may be subject to our standard fees for particular promotional items or
quantities of literature;
(b) exercise all reasonable efforts to provide you with timely
notice of new models, releases, updates, and improvements in functionality or
product performance;
(c) provide sales and technical training for your qualified
personnel at the times, locations and expenses we establish;
(d) assist you in making direct sales calls on your customers or
prospects upon your request and with our concurrence;
(e) sell you those available accessories, supplies and attachments
and spare parts and sell or license to you that documentation which we
generally make available to our customers at our standard prices at the time of
your order; and
(f) provide any cooperative promotion, marketing, training or other
program which we may make available to our Distributors.
Section 5. Shipment and Risk of Loss
5.1 Title to equipment and risk of loss or damage to Products will
pass to you FOB. Unless you provide us with special written instructions
regarding shipment, we will choose the method of shipment and carrier to be
used. Intelipsan will pay for all transportation, shipping, handling and
insurance costs.
5.2 We will use reasonable efforts to meet the shipment date you
request for each item. We may delay the scheduled shipment date if unforeseen
problems prevent us from meeting it and we will promptly notify you when any
shipment will be delayed. If we fail to ship the Products within a reasonable
time, you may cancel the order (and/or terminate this Agreement) without being
liable to us for any of the Products except those units which have already
shipped. But we will not be liable to you for any expenses or damages because
of that delay.
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5.3 We will have no obligation to ship any Products at any time when you
are delinquent in payment for Products previously shipped.
Section 6. Order Cancellation and Reschedule
6.1 You may cancel or reschedule an order for any MANUFACTURER standard
product by giving us written notice. You will owe us a cancellation charge
equal to 10 percent of the price of the product which you cancel or reschedule
within 30 days of its scheduled shipment date. You may reschedule an order only
once and any additional attempt to reschedule will be treated as a cancellation.
Section 7. Prices
7.1 We will furnish the Products to you at the prices specified on
Schedule A, Distributor Price Schedule, as that Schedule may be amended by
Manufacturer from time to time and upon at least sixty (60) days' prior notice.
7.2 Price increases will become effective sixty (60) days after our
written notice to you of the increase. Price increases will not apply to orders
we have accepted before the effective date of the increase.
7.3 Price decreases will become effective on the "Effective Date"
specified in our notification. The price decrease will apply to unshipped items
specified on orders we have accepted prior to the effective date of the
decrease. You may be entitled to a credit for the difference between the price
paid for Products in your inventory on the effective date of the decrease and
the new lower price provided the Products are still in inventory and were
delivered to you no earlier than 7 months before the effective date of the
price decrease. Similar price adjustments will also be made for Products in
transit to you on the effective date of the price decrease if we invoiced you
for the Products at the higher price. To qualify for the credit, you must be
able to identify each unit by product code, shipment date, equipment serial
number, invoice number and net invoice price. Your request for a credit must be
submitted to us within 30 days after we notify you of the reduction. We will
issue the credit upon verification of your request. We reserve the right to
require an independent audit of your inventory if we cannot agree on which
Products are eligible for the credit.
Section 8. Payment
8.1 We will invoice you for a product when we ship it to you and payment
will be due within Net 30 days of the date of the invoice.
8.2 Any amount due which you have not paid by its due date will be
considered delinquent. In that event, we may invoice and collect from you all
costs (including reasonable attorneys fees) which we may incur to collect the
delinquent amount. You will also owe us a late payment charge on the delinquent
balance equal to 1.5 percent per month
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or the legal maximum, whichever is less.
8.3 We reserve a purchase money security interest in each product
delivered and in any proceeds of the product, including accounts receivable, to
secure payment of the charges outstanding for Products. You authorize us to
file a financing statement and related documents if permitted by law. At our
request, you will execute whatever documents we need to perfect this security
interest.
8.4 All payments made by you to the MANUFACTURER shall be in United
States dollars.
8.5 Provided that MANUFACTURER executes an appropriate confidentiality
agreement and such disclosure is not prohibited by law, You will provide
MANUFACTURER with adequate information to provide MANUFACTURER with reasonable
assurance of payment, which may include financial statements, bank references,
trade references and other similar information. MANUFACTURER reserves the right
without liability to suspend performance of this Agreement if you have not
provided reasonable assurances of payment.
8.6 You shall have full responsibility for the invoicing and collection
of fees from your customers, and shall bear all expenses in connection
therewith.
Section 9. Taxes and Other Additional Charges.
9.1 You will pay all sales, use, excise and other taxes on the Products
(except those based on our net income or net worth) unless you furnish us with
a valid resale or exemption certificate. You will also be responsible for
reporting Products acquired by you for personal property tax purposes. You will
pay all transportation costs, insurance and like charges. Our prices for the
Products do not include such taxes or charges; where applicable, they will be
added to the total invoice amount.
Section 10. Software and Firmware
10.1 Products ordered for your own use or for distribution to your end
user customers will be provided subject to the terms and conditions of our
standard software license.
10.3 Products you purchase from us may contain firmware programs built
into their circuitry. Your purchase of that equipment includes a non-exclusive
license to use and sub-license the firmware only as part of the equipment and
only under the following conditions: (a) MANUFACTURER (or its supplier) retains
all title and ownership to the programs; (b) the firmware may not be copied,
disassembled, de-compiled or reverse engineered under any circumstances; and
(c) you will only transfer possession of the programs in conjunction with a
sale of the Products (which includes a sale of your products that integrate the
Products).
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Section 11. Warranty
11.1 We warrant that any equipment furnished to you under this Agreement
will conform in all material respects to our then-current published
specifications and will be free from material defects in materials and
workmanship under normal use and service. This warranty begins on the date of
shipment and is limited to the period specified in the Authorized Distributor
Price Schedule current on the date of your order.
11.2 Our sole obligation to you and your exclusive remedy under this
warranty is to repair or replace without charge any defective unit if you
return it to us, freight prepaid, to the factory or service center we
designate. If we are unable within a reasonable time to repair or replace your
item, we may instead elect to accept return of the unit and refund to you the
purchase price you paid for it. We will pay freight costs to ship any repaired
or replacement unit to you. You agree to assist us in identifying the
circumstances under which the equipment may have failed. If the problem was
reported in bad faith, you agree to pay us at our standard rates for the time
and materials we spent investigating it.
11.3 This warranty does not apply to any individual product which has been
subjected by you or another party to (a) operating or environmental conditions
contrary to our written specifications or recommendations; (b) damage, misuse
or neglect; or (c) improper installation, repair or alteration. For certain
designated Products, which we will specify to you in writing, MANUFACTURER must
perform installation and related implementation services in order for this
warranty to apply. This warranty also excludes expendable items, such as lamps,
fuses, or other parts which fail from normal use. We do not guarantee the
integrity of data or warrant that the Products will operate uninterrupted or
error-free.
11.4 The warranty for software is specified in the applicable software
license.
11.5 THE WARRANTIES IN THIS SECTION 11 ARE IN LIEU OF AND REPLACE ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 12. Infringement Indemnity
12.1 We agree to defend, at our expense, any suits against you based upon
a claim that any Products furnished to you under this Agreement directly
infringe a U.S. patent or copyright (excluding claims based on alterations of
the Products by you or another party, combinations with other Products we did
not supply, or our compliance with your or your customer's software,
specifications or instructions) and to pay costs in a final court award or a
settlement we negotiate. But you must give us prompt written notice of the
suit, cooperate fully with us in its defense and give us sole authority to
control the case and related settlement negotiations. If the use, sale or
license of any Products furnished under this
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Agreement is enjoined as a result of such suit, we will at our option and at no
expense to you obtain for you the right to use or sell such Products,
substitute an equivalent product reasonably acceptable to you or accept return
of the product and refund the price you paid, less a reasonable amount for use
or damage. IN NO EVENT WILL WE BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES ARISING FROM INFRINGEMENT OR ALLEGED INFRINGEMENT OF
PATENTS, TRADEMARKS, COPYRIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS.
Section 13. Limitation of Liability and Remedies
13.1 Your exclusive remedies concerning our performance or
nonperformance are those expressly stated in this Agreement. UNDER NO
CIRCUMSTANCES WILL WE BE LIABLE FOR TERMINATION DAMAGES, INDEMNITY FOR
CLIENTELE, LOSS OF DATA, REPROCUREMENT COSTS, LOST REVENUE OR PROFITS, OR FOR
ANY OTHER SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND,
EVEN IF THEY WERE FORESEEABLE OR YOU HAVE INFORMED US OF THEIR POTENTIAL.
13.2 Our total liability to you for damages under this Agreement will
not exceed the greater of $50,000 or the payments you made for the
individual product at issue in the claim. This limitation will apply regardless
of the form of action (i.e., whether the lawsuit is in contract or in tort,
including negligence). But this limitation will not apply to claims under
Section 12 or claims by you for bodily injury or damage to real or tangible
personal property if MANUFACTURER is solely liable for such damage.
Section 14. Proprietary Information
14.1 Each party may be given access to confidential or proprietary
information of the other ("Proprietary Information"). We will each maintain in
confidence the Proprietary Information of the other with the same standard of
care which the receiving party uses to safeguard its own proprietary
information, but in no event less than reasonable care, if it is furnished on a
confidential basis and marked or identified as confidential or proprietary when
first disclosed. The obligations under this Section 14 will survive any
termination of this agreement.
Section 15. Default
15.1 If either party fails to perform any material obligation under
this Agreement, including the obligation to pay amounts when due, the
non-defaulting party may terminate this Agreement if the other has failed to
take corrective action within 30 days after its receipt of the notice of
default which shall specify the basis for the default. We may immediately seek
injunctive relief if your actions threaten our (or our supplier's) proprietary
rights.
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Section 16. Ownership
16.1 Distributor represents that it is not owned by any person or entity
that is a direct competitor of the Manufacturer and that Distributor will give
Manufacturer 90 days written notice of any change of ownership that changes this
representation, provided such notice is not prohibited by applicable securities
laws.
Section 17. Trademarks
17.1 During the term of this Agreement, you may indicate to the public and
the trade that you are an Authorized Distributor of the Products specified on
Schedule A. With our prior written approval, you may also use the MANUFACTURER
trademarks and tradenames to promote and solicit sales and licensing of
Products if you strictly comply with our instructions regarding that use. But
you will not adopt or use those trademarks or tradenames, or any confusingly
similar word or symbol, as part of your company name or (to the extent you have
the power to prevent such use) allow others to use such names or marks. You
will not acquire any interest in any of these trademarks or tradenames by
virtue of this Agreement or your activities under it, or any relationship with
MANUFACTURER.
17.2 At the expiration or termination of this Agreement, you will
immediately discontinue any use of the MANUFACTURER names and trademarks, as
well as any other combination of words, designs, trademarks or tradenames that
would indicate that you are or were an Authorized Distributor of the Products.
Section 18. Assignment
18.1 Neither party may assign this Agreement or delegate its performance
under it without the prior written consent of the other, which shall not be
unreasonably withheld; provided that Intelispan may assign this Agreement to a
subsidiary of Aquis Communications Group, Inc. with which Intelispan has signed
a letter of intent to merge. You agree, however, that we may assign this entire
agreement to our parent or other affiliate or sell, transfer or assign to a
financing institution our rights to receive payment from you.
Section 19. US Government Sales
19.1 If you intend to re-market or resell Products and/or services to the
U.S. Government, a U.S. Government prime contractor or subcontractor, or intend
to enter into any other resale agreement which obligates you to flow down to
MANUFACTURER any representation, certification, clause or other provision
dealing with the acquisition of Products and/or services by the U.S. Government,
then a separate agreement must be negotiated with MANUFACTURER before we accept
your order. Any proposals, price quotations and/or agreements determined to be
in violation of this Section shall be null and void.
19.2 We make no representations, certifications or warranties, express or
implied,
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that Products and/or services acquired under this Agreement conform to any
statutes, regulations, or clauses governing the acquisition of Products and/or
services by the U.S. Government or that the sale to you under this Agreement
was conducted in accordance with statutes, regulations or clauses that apply
when resale for U.S. Government end use is contemplated.
Section 20. General.
20.1 Each party is an independent contractor and not an agent, joint
venturer, or representative of the other, and neither party may create any
obligations or responsibilities on behalf of or in the name of the other.
20.2 None of the Products is specifically designed or intended for use
as a component in the maintenance or operation of a nuclear facility; you agree
to indemnify us against any claim arising out use of a product if you resold a
product for such an application. We may require additional contractual
safeguards for such applications.
20.3 Notices under this Agreement must be sent by certified mail or
reputable overnight delivery service to the appropriate party at its address
stated on the first page of this Agreement (or to a new address if the other
has been properly notified of the change). A notice will not be effective until
the addressee actually receives it.
20.4 This contract and its schedules represent the entire agreement
between the parties regarding this subject and the Products listed on Schedule
A. It supersedes any terms or conditions contained on printed forms submitted
with purchase orders, sales acknowledgements or invoices. It also supersedes
catalog sales terms and conditions and all previous oral or written
communications between the parties regarding the subject, and it may not be
modified or waived except in writing and signed by an officer or other
authorized representative of each party. Neither party will be liable to the
other for any delay or failure to perform if that delay or failure results from
a cause beyond its reasonable control. If any provision is held invalid, all
other provisions shall remain valid, unless such invalidity would frustrate the
purpose of this Agreement.
20.5 Massachusetts law (without giving effect to its conflicts of laws
provisions) governs this Agreement. MANUFACTURER and Distributor will attempt
to settle any claim or controversy arising out of it through consultation and
negotiation in good faith and a spirit of mutual cooperation. Any dispute which
cannot be resolved through negotiation or mediation may be submitted to the
courts within Massachusetts for resolution.
20.6 No waiver by either party of any default hereunder by the other
shall operate as a waiver of any other default or of a similar default on a
future occasion. No waiver of any term or condition hereof by either party
shall be effective unless the same shall be in writing and signed by such party.
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20.7 In the event that any provision of this Agreement (other than a
provision that goes to the essence of the consideration for this Agreement) is
declared invalid, unenforceable or void to any extent by a court of competent
jurisdiction, such provision shall be modified, if possible, by reducing its
duration and scope to allow enforcement of the maximum permissible duration and
scope. In any event, such declaration shall not affect the remaining
provisions, and this Agreement shall be enforced as modified, or if no
modification is enforceable, as if such invalid clause had not been included.
You acknowledge that you have read this Agreement, understand it, and agree to
be bound by its terms.
In WITNESS WHEREOF this AGREEMENT is executed by and on behalf of Distributor
and MANUFACTURER. As of the date first written above:
Altiga Networks Inc. Intelispan, Inc.
BY: /s/ Martin Falaro BY: /s/ Kent Dallas
-------------------------- ----------------------------
Signature Signature
Print Name: Martin Falaro Print Name: Mr. Kent Dallas
Title: Vice President Title: Vice President
Date: 6/30/99 Date: June 22, 1999
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SCHEDULE A PRICE LIST
<TABLE>
<CAPTION>
PRODUCT OFFERINGS ORDERING CODES LIST PRICE DISCOUNTED PRICE [*%]
<S> <C> <C> <C>
HARDWARE
VPN Concentrator, Model C50 C50-02-02 $49,005 $[*]
VPN Concentrator, Model C20 C20-02-02 $19,005 [*]
VPN Concentrator, Model C10 C10-02-02 $ 9,005 [*]
SOFTWARE
With Unlimited Client CSF-00-00 $ 995 [*]
OPTIONS
Power Supply CPS-00-00 $ 1,500 [*]
SEP Module CSE-00-00 $12,500 [*]
Fan-replacement CFN-00-00 $ 400 [*]
Document Set
(User/Getting Started Guide) CDS-00-00 $ 150 [*]
</TABLE>
One set of software must be purchased with each C-series concentrator purchased.
12
