Exhibit 10(dm)
MASTER DISTRIBUTOR AGREEMENT
(for the United States and Canada)
Master Distributor Agreement ("Agreement"), dated as of November 1, 2003
("Agreement") between Artera Group, Inc., ("Artera") a Delaware corporation, and
FairPoint Broadband, Inc., a Delaware corporation ("Distributor"),
WHEREAS, (i) Artera is engaged in the development, distribution and
operation of Internet and Intranet infrastructure products and services, (ii)
Distributor is engaged, directly, through its Affiliates (as defined below) and
through resellers, in the distribution and marketing of Internet and Intranet
products and services, (iii) Artera and Distributor are parties to an Exclusive
Marketing License Agreement dated October 11, 2002 ("Broadband Agreement")
whereby Distributor acquired certain rights to distribute Artera's products and
services, and a Memorandum of Understanding dated May 23, 2003 ("MOU")
pertaining to the Broadband Agreement, (iv) Artera and FairPoint Communications,
Inc., a Delaware corporation of which Distributor is a wholly-owned subsidiary
("Communications"), are parties to a License Agreement dated August 15, 2002
("Communications Agreement" and, collectively with the Broadband Agreement as
modified by the MOU, the "Prior Agreements") whereby Distributor acquired
certain rights to distribute Artera's products and services and (v) Artera,
Distributor and Communications now wish to amend and replace the Broadband
Agreement (as modified by the MOU) and the Communications Agreement with this
Agreement;
NOW, THEREFORE, in consideration of the covenants herein, and other
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
Article 1. DEFINITIONS
As used herein, the terms described below have the following meanings:
1.1 "Affiliate" shall mean any entity that, directly or indirectly, is
controlled by, in control of or under common control with the entity as to
which the term "Affiliate" is used.
1.2 "CRM System" shall mean Artera's customer relations management system that
as a part of the Service support system allows Subscribers of Distributor
or its Resellers to be uniquely identified from other subscribers to the
Service and allows Distributor, Resellers and Artera to interface with
Artera's records to initiate and authenticate Subscriptions, activate or
deactivate Subscribers' access to the Data Center and xxxx Subscribers.
1.3 "Data Center" shall mean the hardware, software and bandwidth providing the
Internet-side data optimization functions for the Service.
1.4 "Deliverables" shall mean the materials described on Schedule 4.3 hereto to
be delivered by Artera to Distributor under Section 4.3 hereof.
1.5 "End User" shall mean a client computer of an individual user, configured
to utilize the Service under a Subscription. In the case of a residential
Subscriber, the End User is also
1
the Subscriber. In the case of a Small Business or Government Entity
Subscriber, the End User is the client computer of the individual user of
the Service rather than the subscribing business or entity itself.
1.6 "Government Entity" shall mean a Federal, state, provincial, local or other
governmental unit or authority, or a department, division or segment
thereof.
1.7 "Know-how", in general, shall have its usual meaning, that is, among other
things, all factual knowledge and information not capable of precise,
separate description but that, in accumulated form, after being acquired as
the result of trial and error, gives one an ability to produce and market
something that one otherwise would not have known how to produce with the
accuracy or precision necessary for commercial success.
1.8 "Level 1 Support" shall mean support for Subscribers and End Users as
described in Schedule 1.8.
1.9 "Level 2 Support" shall mean support for Distributor and the Resellers to
assist them in providing Level 1 Support.
1.10 "License Fee" shall mean any license fee payable by Distributor to Artera
under Section 3.1 hereof.
1.11 "Reseller" shall mean a person or entity that, under the auspices of this
Agreement, enters into an agreement for the resale or distribution of the
Service to Subscribers in the Territory.
1.12 "Protected Account" shall mean a person or entity named in Schedule 2.2,
with respect to which the parties' rights and obligations shall be as
described in Section 2.2 and Schedule 2.2 of this Agreement.
1.13 "Service" shall mean the "Artera Turbo" service, as configured from time to
time, including its software, distributed to Subscribers as a bundled or
unbundled subscription service, including all updates, enhancements and
modifications thereof, together with the right to use all of the foregoing
in connection with the Data Center.
1.14 "Service Fee" shall mean the fee paid by a Subscriber for its Subscription,
excluding sales, use, VAT, excise and similar taxes.
1.15 "Small Business" shall mean a business or other organizational entity
(other than a Government Entity) that (i) does not have or use 250 End User
personal computers or computer terminals and (ii) does not sell, distribute
or market the Service.
1.16 "Subscriber" shall mean an individual, Small Business or Government Entity
that subscribes to the Service via a Reseller. In the case of a residential
Subscriber, the Subscriber is the End User. In the case of a Small Business
or Government Entity Subscriber, the Subscriber is the subscribing business
or entity rather than any individual client computer or user within that
business or entity.
2
1.17 "Subscriber Software" shall mean the Service software resident or installed
on the Subscriber's or its End Users' personal computer(s) or at the
Subscriber's location.
1.18 "Subscription" shall mean a subscription for a Subscriber to use the
Service on its personal computer(s), including the license to use the
Subscription Software and the Service, as set forth in Artera's Terms of
Service.
1.19 "Technical Information" shall mean technical, design and engineering
information pertaining to the design, manufacture, production and
distribution of the Service in the form of designs, plans, drawings,
specifications, reports, records, manuals, other written materials,
computer programs and software and other forms or media relating thereto.
1.20 "Territory" shall mean the United States and Canada.
Article 2. GRANT OF LICENSE AND RIGHTS
2.1 License. Artera hereby grants to Distributor, during the term of this
Agreement, a license to distribute the Service, directly or via its
Affiliates, to Subscribers in the Territory through resellers (which, upon
such distribution, shall become "Resellers" under this Agreement) in
accordance with the terms and conditions of this Agreement. Such resellers
may include but shall not be limited to ILECs and ISPs that are Affiliates
of Distributor ("Internal Resellers"). The license to Distributor hereunder
includes the right to make copies of the Subscriber Software to be provided
to Subscribers; to reproduce and distribute the Service documentation,
product descriptions and promotional materials; and, subject to Section 2.4
hereof, to modify such materials as requested by Resellers for the purpose
of identifying the Reseller in connection with the Service. Such license,
however, conveys no right to modify the Service, to prepare derivative
works of the Service, to use the Service for Distributor's own purposes or
to sell or copy the Service for any purpose other than for delivery to
Resellers or their Subscribers as contemplated by this Agreement.
2.2 Protected Accounts. During the term of this Agreement, there may be persons
or entities that are "Protected Accounts" under this Agreement. If a person
or entity is a Protected Account, Artera will not enter into or pursue
(other than on behalf of Distributor) an agreement with such person or
entity to sell or distribute the Service to residential consumers, Small
Businesses of Government Entities in the Territory, and will not actively
support or assist in any third party distributor's pursuit of such an
agreement, for a period of 3 months after the date of this Agreement. Only
persons or entities with at least 25,000 potential End Users or ILECs with
5000 potential End Users are eligible to be Protected Accounts. The persons
or entities, if any, that are Protected Accounts as of the date of this
Agreement are set forth in Schedule 2.2. Distributor may from time to time
in writing propose to add persons or entities to Schedule 2.2 as additional
Protected Accounts and shall include, in each such proposal, the name of
the proposed Protected Account, the pertinent division or geographical area
within the proposed Protected Account (if applicable), the name and title
of Distributor's contact at the proposed Protected Account, Distributor's
relationship to that contact and an estimate of the number of potential End
Users for the Protected Account. Such person or entity shall become a
Protected Account if Artera grants its written consent to such addition.
Such consent will be deemed granted unless denied by
3
Artera in writing within ten (10) business days of submission by
Distributor. Artera may withhold consent if a proposed Protected Account is
already being serviced or marketed and solicited by Artera or by others
with Artera's active support or assistance, and otherwise shall not
withhold or deny its consent except for good cause, as determined by it in
its good faith and reasonable business judgment. Artera may impose such
conditions time limits upon its approval as it deems necessary in its good
faith business judgment, and shall so notify Distributor within ten (10)
business days. Unless otherwise limited by Artera, approved Protected
Accounts shall remain so protected for a period of 3 months after
submission by Distributor Artera may condition such consent on
Distributor's securing a distribution commitment for the Service from the
applicable Protected Account within a specified period of time or on any
other conditions. Any time limitations or other conditions applying with
respect to initial Protected Accounts in Schedule 2.2 as of the date of
this Agreement are included within Schedule 2.2 as of the date hereof.
Notwithstanding anything to the contrary herein, (a) any entity that is or
becomes a protected account under that certain Finder Agreement between the
parties of even date herewith shall be automatically deemed to be a
Protected Account under this Agreement upon re quest of Distributor; and
(b) all Internal Resellers shall be deemed Protected Accounts throughout
the term of this Agreement.
2.3 Acceptance. Distributor hereby (a) accepts the rights granted to it by
Artera under this Agreement and (b) acknowledges that the rights that
Artera has granted to Distributor hereunder are limited to the distribution
and marketing of the Service to Resellers in the Territory, subject to the
other limitations set forth in this Agreement.
2.4 Intellectual Property Usage and Notices. All right, title and interest in
and to the Service, including all copyrights, trademarks, service marks,
logos, names, designations, patents and other intellectual property
embodied in the Service or provided by Artera in connection therewith
(including but not limited to the Subscriber Software and the xxxx "Artera
Turbo") shall remain the property of Artera. Distributor may use and copy
such trademarks, service marks and copyrighted material of Artera as
reasonably necessary to perform under this Agreement. All copies of the
Subscriber Software and all documentation and marketing materials
distributed or used by Distributor shall be marked with a legend
identifying Artera as the owner and developer of the Service, with the
appropriate patent, copyright and trademark notices, and Distributor shall
not remove any such notices from any Subscriber Software or other materials
provided to it by Artera; provided, however, that, in distributing the
Service to Subscribers, Distributor or the Resellers may reference their
own names or brands if in conjunction with the words "Powered by Artera
Turbo."
2.5 Reseller Agreements. All Service distribution agreements with Resellers
hereunder ("Reseller Agreements") shall be between Distributor and the
respective Resellers. Artera shall not be a party to or have any
obligations under any Reseller Agreement, except for such billing, data
center and support services as may be contracted for by such Reseller in
accordance with Article 3, and support, training, and service updates in
accordance with Article 6. Distributor shall have no authority to bind
Artera with respect to any Reseller, and Distributor shall not represent to
any Reseller or anyone else that it has such authority. No Reseller
Agreement may be inconsistent with this Agreement. Any representations or
warranties regarding the Service contained in a Reseller Agreement shall be
the sole
4
responsibility of Distributor, unless Artera expressly agrees otherwise in
writing in advance for the particular Reseller.
2.6 Subscription Agreements. All Subscription agreements hereunder
("Subscription Agreements") shall be between Resellers and their respective
Subscribers. Artera shall not be a party to or have any obligations under
any Subscription Agreement, except for Level 2 Support and Service Updates
pursuant to Article 6 hereof. Provided, however, that Artera shall have the
right to require that Subscribers agree to Artera's Terms of Service for
the Service, which Terms of Service incorporate the License to use the
Service. Artera may amend the Terms of Service from time to time.
Distributor shall have no authority to bind Artera with respect to any
Subscriber, and Distributor shall not represent to any Subscriber or anyone
else that it has such authority. No representation or warranty regarding
the Service contained in a Subscription Agreement shall be the
responsibility of Artera, unless Artera expressly agrees otherwise in
advance in writing for the particular Subscriber.
Article 3. FEES AND CERTAIN SUPPORT SERVICES
3.1. License Fee. License Fee. The License Fee discussed and agreed in the Prior
Agreement between FairPoint Broadband, Inc and Artera is hereby deemed paid
in full by reason of payments made to Artera under the Prior Agreements.
Upon signing of this Agreement, Artera hereby releases Broadband and
Distributor from any further obligations, claims or demands for any such
License Fee.
3.2. Royalty. For each calendar month (or part thereof) of each Subscription,
Artera shall be entitled to a Royalty. The Royalty shall be calculated on a
per End User basis. The amount or formula of the Royalty is set forth in
Schedule 3.2.
3.3. Billing, Collections and Payments. Service Fees shall be billed for and
collected, and Royalties shall be paid, as described in Schedule 3.3.
3.4. Provision and Operation of Data Center. For any Reseller, Distributor may
elect to have such Reseller, rather than Artera, provide and operate the
Data Center serving such Reseller's End Users. Distributor may elect to
operate a data center for Distributor's Internal Resellers. The minimum
specifications for a Reseller Data Center are set forth in Schedule 3.4.
3.5. Mergers, etc. In the event of a merger, acquisition or combination of
entities, one of which is a Reseller and the other of which is not,
Distributor's rights with respect to the surviving entity shall be as
follows: If the Reseller is the acquiror, the surviving entity shall be a
Reseller for purposes of this Agreement. If the Reseller is not the
acquiror, the surviving entity shall not be a Reseller for purposes of this
Agreement. If it is not reasonably clear which entity is the acquiror or if
the transaction is a merger of equals, the surviving entity shall be a
Reseller for purposes of this Agreement only if the Reseller was the entity
that had more End Users as of the date of the relevant transaction.
5
Article 4. DISCLOSURES and DELIVERies
4.1 Disclosure. The parties shall disclose to each other and Artera shall
disclose to Resellers such appropriate Technical Information as is
reasonably required to accomplish the purposes of this Agreement. Neither
party, however, that shall be obligated to disclose information, the
disclosure of which has been restricted by a third party.
4.2 Treatment. All disclosed Technical Information that is Confidential
Information shall be kept confidential by the receiving party in accordance
with Article 5 hereof and shall remain the property of the disclosing
party.
4.3 Deliverables. Artera agrees that the Service shall be available for
distribution and marketing by Distributor and Resellers and completely
functional to Subscribers in accordance with the availability dates set
forth in Schedule 4.3.
Article 5. CONFIDENTIALITY
5.1. Definitions. Each party possesses confidential information relating to its
business and technology that has substantial value to such party
("Confidential Information"). Subject to Section 5.4 hereof, Confidential
Information includes but is not limited to Deliverables, Technical
Information, Know-how, designs, improvements, inventions, techniques,
software documentation, financial statements, projections, prices, costs,
customer lists, supplier lists and anything else marked "Confidential
Information" or similarly designated as being confidential. Any
Confidential Information disclosed between the parties hereto orally or
visually, in order to be subject to this Agreement, shall be so identified
to the receiving party at the time of disclosure and confirmed in a written
summary appropriately marked within ten days after oral or visual
disclosure.
5.2. Treatment. Except as expressly permitted under this Section 5.2 and Section
5.4 hereof, each party shall, during the term of this Agreement and for
five years thereafter, hold in confidence and not disclose to third parties
all Confidential Information of the other party disclosed directly or
indirectly to it. The recipient of Confidential Information shall grant
access to it only to employees, contractors, agents and suppliers who need
to receive such Confidential Information in connection with this Agreement.
Such persons with access to Confidential Information shall be placed under
obligation (a) to hold in confidence all Confidential Information provided
to them in the course of their service; (b) to use such Confidential
Information only in the course of performing their duties; and (c) to
assign to their employer or the party retaining them all inventions or
improvements relating to such entity's business and conceived while in such
entity's employ or retained by such entity (unless such assignment is
prohibited by applicable law). All documents, writings and other
embodiments containing Confidential Information of the other party shall be
maintained by the receiving party in a prudent and secure manner.
Distributor may disclose Artera's Confidential Information to Resellers and
prospective Resellers as necessary to perform this Agreement, but only if
such Reseller or prospective Reseller has entered into a written
non-disclosure agreement with Artera, or has entered into a written
non-disclosure agreement with Distributor (for the benefit of Artera) in a
form substantially equivalent to the terms hereof. For purposes of this
Article 5, delivery by Distributor to a Subscriber, whether
6
directly or through a Reseller, of the Subscriber Software shall not
constitute a disclosure by Distributor of Confidential Information of
Artera. In no event shall the party receiving Confidential Information of
the other party disassemble, reverse engineer, re-engineer, redesign,
decrypt, decipher, reconstruct, re-orient, modify or alter any Confidential
Information of the disclosing party or any circuit design, algorithm, logic
or program code in any of the disclosing party's products, models or
prototypes that contain Confidential Information, or attempt any of the
foregoing.
5.3. Return. All documents and other embodiments of a party's Confidential
Information, as well as those created or derived from the disclosing
party's Confidential Information that incorporate the disclosing party's
Confidential Information, and all copies thereof, shall be returned
promptly to the disclosing party by the other party upon the expiration or
any termination of this Agreement; provided, however, that Distributor may
retain (subject to the restrictions in this Article 5) such Confidential
Information as is necessary for it to satisfy any post-termination support
obligations it may have under Section 7.4 hereof.
5.4. Exclusions. Confidential Information shall not include information that (a)
was at the time of disclosure in the public domain through no fault of the
party receiving it; (b) becomes part of the public domain after disclosure
to the party receiving it through no fault of such party; (c) was in the
possession of the party receiving it (as evidenced by written records) at
the time of disclosure and was not acquired directly or indirectly from the
other party or a third party under a continuing obligation of confidence of
which the party receiving it was aware; (d) was received by the party
receiving it (as evidenced by written records) after the time of disclosure
hereunder from a third party who did not require it to be held in
confidence and who did not acquire it directly or indirectly from the other
party under a continuing obligation of confidence of which the party
receiving it was aware; (e) is required by law, governmental regulation,
court order or the rules of a securities exchange to be disclosed
(provided, that a party required to so disclose Confidential Information
shall use best efforts to notify the other party of such potential
disclosure as soon as practicable so that such party may seek a protective
order for such Confidential Information); (f) was developed independently
by the receiving party and without the use of Confidential Information
received from the disclosing party; or (g) was disclosed by the party
owning it to third parties without restrictions on use or disclosure.
5.5. Other Agreements. This Article 5 shall not limit the generality of any
separate confidentiality or nondisclosure agreement in effect between
Artera and Distributor; provided, however, that if such other agreement and
this Article 5 cover the same information, the stricter of the two shall
apply with respect thereto.
Article 6. MARKETING AND SUPPORT OBLIGATIONS
6.1 Xxxxx 0 Xxxxxxx. Xxxxxxxxxxx xxxxx xx responsible for Level 1 Support to
the Subscribers and End Users. Distributor may satisfy such obligation by
providing the Level 1 Support itself, causing Resellers to provide the
Level 1 Support or causing third parties to provide the Xxxxx 0 Xxxxxxx.
Xxxxx 0 Support shall be provided not less than 8:30am to 5:30pm in the
respective time zones of the End Users, Monday through Friday.
7
6.2 Level 2 Support. Artera shall provide Level 2 Support, which shall be
available at no charge to Distributor and Resellers not less than 8:30am to
5:30pm Eastern time, Monday through Friday. Access to Level 2 Support shall
be by online methods and toll-free telephone.
6.3 Training. Artera shall make available to Distributor and Resellers Level 1
Support training and training on the CRM System. Such training may be in
regularly scheduled classes at Artera's offices or by such other means as
Artera may determine. The Level 1 Support training must be attended by
Distributor or the Reseller or third party providing Level 1 Service on its
behalf prior to the start of actual distribution of the Service by
Distributor or the applicable Reseller.
6.4 Service Updates, Etc. Artera shall provide all updates, enhancements,
improvements or modifications of the Service to Distributor or to Resellers
and their Subscribers at no cost via online downloads, and shall provide to
Distributor a master CD for each such upgrade, enhancement, improvement and
modification, for copying and distribution to Resellers.
Article 7. TERM and termination
7.1. Term. The term of this Agreement is from the date hereof until five years
thereafter, unless modified by written agreement of the parties or earlier
terminated under this Article 7.
7.2. Breach. Either party may terminate this Agreement for a material breach
(including any non-payment) by the other party, upon 30 (for payment
breaches) or 60 (for other material breaches) days' notice and opportunity
to cure; provided that a payment breach shall also require payment of
interest at the rate of 6% per annum from the due date to the payment date.
In the event of a material breach by Distributor not cured as described
above, Artera may elect, in lieu of termination of this Agreement,
irrevocably to terminate any distribution protections Distributor may have
under Section 2.2 of this Agreement.
7.3. Effect of Termination. Expiration or termination of this Agreement shall
not terminate any Subscription Agreements.
7.4. Royalties and Support Upon Certain Terminations. Upon any expiration or
termination of this Agreement other than termination by Artera under
Section 7.2 hereof, or by Distributor under Article 7.6 hereof, Distributor
shall continue to receive net payments out of Service Fees as described in
Schedule 3.3, with respect to those specific Subscribers for which Service
Fees were payable on the date of such expiration or termination. Such right
to net payments shall apply until the expiration or termination of the
respective Subscriptions of those Subscribers and shall be subject to
Distributor's continued satisfaction, with respect to those Subscribers, of
the Level 1 Support and other obligations pertaining to Subscribers that
are set forth in this Agreement.
7.5. Survival. Section 4.2, Article 5, Section 7.4, Article 9 and Article 10
shall survive the expiration or any termination of this Agreement.
8
7.6 Termination by Distributor. Distributor, in its sole discretion, may
terminate this Agreement in its entirety, upon 30 days' prior written
notice to Artera.
Article 8. NOTICES
Notices under this Agreement shall be in writing and sent by personal delivery,
facsimile, recognized commercial courier or certified or registered mail (with
return receipt), in each case with all charges prepaid, addressed as follows:
If to Artera: Artera Group, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Chairman & President
Facsimile: 000-000-0000
-- with a copy to: Artera Group, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
Facsimile: 000-000-0000
If to Distributor: FairPoint Broadband, Inc.
c/o FairPoint Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Chief Operating Officer
Facsimile: 000-000-0000
-- with a copy to: Xxxxxxx X. Xxxx, General Counsel
FairPoint Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Article 9. INDEMNIFICATION
9.1 Indemnification Obligations. Artera and Distributor each agrees to
indemnify, defend, and hold harmless the other party, its Affiliates, and
the officers, directors, employees and agents of all thereof (collectively,
the "Indemnified Party") against all losses, claims, liabilities and
expenses (including reasonable attorneys' fees) (collectively, "Losses")
incurred on account of a suit, claim or proceeding purporting to be based
on a failure by the other party (the "Indemnifying Party") to perform
obligations under this Agreement.
9.2. Indemnification Procedures. The Indemnified Party shall promptly advise the
Indemnifying Party of any suit, claim or proceeding for which
indemnification is to be sought and shall cooperate with the Indemnifying
Party in the defense or settlement thereof. The Indemnifying Party shall
select, retain and pay counsel in connection with such suit, claim
9
or proceeding, subject to the Indemnified Party's consent, which shall not
be unreasonably withheld. No settlement shall be made by the Indemnifying
Party without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld.
Article 10. WARRANTIES AND DISCLAIMER
10.1. Right to License. Artera represents and warrants that (a) it is the owner
or licensee of the Service (including the Subscriber Software); (b) it is
the owner, lessee or otherwise has the right to use the Data Center; (c)it
has the right, power and authority to grant Distributor the rights and
licenses as set forth in this Agreement; (d) to the best of its knowledge,
the Service does not infringe any intellectual property or other right of
any third party in the Territory.
10.2. Disclaimer. Except as specifically set forth in this Agreement, Artera
disclaims any express or implied warranty of the accuracy, reliability,
value or merchantability of the Service, or its suitability or fitness for
any purpose. Artera disclaims all other warranties of whatever nature,
express or implied.Except as otherwise set forth in this Agreement, Artera
disclaims all liability for Losses resulting from the use of the Service.
This disclaimer embraces special, incidental, punitive or consequential
damages and damages for interruption of use or loss or corruption
of data. Artera's terms of service shall contain similar disclaimers and
limitations of warranties with respect to Subscribers.
Article 11. MISCELLANEOUS
11.1. Books and Records. Upon request of either party hereto with ten days'
prior notice, the other party shall make available for review by the
requesting party such books and records as are reasonably required to
demonstrate compliance with the obligations of this Agreement. Requests
hereunder may be made no more than once per calendar year, and may pertain
only to the then current and immediately preceding calendar year.
11.2. Choice of Law, Jurisdiction and Venue. This Agreement shall be interpreted
in accordance with the laws of the State of Connecticut (U.S.A.), without
regard to its conflict of law provisions.
11.3. Interpretation. No provision of this Agreement shall be interpreted
against a party solely because such party or its attorney drafted such
provision.
11.4. Force Majeure. In the event of delay in performance under this Agreement
due to unforeseeable causes beyond a party's reasonable control, including
but not limited to acts of God, acts of the government, fires, floods,
strikes, unusually severe weather("Events of Force Majeure"), the time for
performance shall be extended for the period of the delay; provided,
however, that the party whose performance was so delayed shall use all
reasonable efforts to minimize the effects of any Event of Force Majeure.
11.5. Public Announcements. Neither party may issue a public announcement about
this Agreement unless the other party shall have approved the text thereof
(which approval shall not be unreasonably withheld) or unless required by
applicable law (including but not
10
limited to filings with the U.S. Securities and Exchange Commission).
11.6. Independent Contractors. Each party to this Agreement is an independent
contractor to the other and not the partner, employer, agent or
representative of the other.
11.7. Assignment. Neither party may assign this Agreement or any of its rights
or obligations hereunder except (a) to its Affiliates and with prior
written notice to the other party; or (b) with the prio written consent
of the other party which consent shall not be unreasonably withheld. This
Agreement shall inure to the benefit of and be binding upon the parties'
successors and permissible assigns.
11.8. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. This Agreement
supersedes and replaces the Prior Agreements in their entirety, except
that (a) Artera's collection, payment, and support obligations to
Distributor and Distributor's customers and End-Users (as defined in the
Broadband Agreement) shall continue in accordance with Article 8 read
thereof as if the Broadband Agreement had terminated by expiration of its
term; and (b) all other obligations of Affiliates, Distributors and
Broadband accrued through the date hereof made the Prior Agreements
(except for obligations with respect to License Fees under the Broadband
Agreement) shall survive the execution and delivery of this Agreement.
Artera and Distributor acknowledge, however, that they are parties to a
separate Finder Agreement of even date herewith, which Finder Agreement
stands alone and is governed by its own terms. Distributor, in its sole
discretion, may determine with respect to a specific potential reseller
whether to enter into a Reseller Agreement in accordance with this
Agreement, or to refer such potential reseller to Artera pursuant to the
Finder Agreement.
11.9. Amendments. No amendment of any provision hereof shall be binding unless
in writing and executed by both parties.
11.10. Severability. If any part of this Agreement is declared invalid or
unenforceable, such decision shall not affect the validity or
enforceability of the remainder hereof.
11.11. Waivers. No waiver of any right or claim under this Agreement shall
affect the right of the waiving party to enforce any other claim or
right hereunder.
11.12. Insurance. Artera shall at all times during the term of this Agreement
maintain (a) Commercial General Liability Policy including
products/completed operations with limits no less than $2,000,000 per
occurrence and $5,000,000 aggregate, (b) Workers Compensation and
Employers Liability per state statute and (c) property insurance
including extended coverage in amounts at least equal to its replacement
cost, providing coverage for all hardware owned by or leased to Artera,
and all of the other properties and facilities of Artera in the
Territory, necessary to the operation and use of the Service and the Data
Center. The insurance maintained pursuant to this Section 11.12 shall (x)
provide to Distributor thirty (30)days written notice of cancellation or
lapse in coverage, (y) contain an appropriate clause in, or an
endorsement upon, each policy pursuant to which the insurance company
waives subrogation and (z) except as to clause (a) above, provide that
any losses shall be payable notwithstanding negligence of Artera.
Furthermore, all such policies shall
11
be placed with an A- or better Best's Rated carrier and shall list
"FairPoint Communications, Inc. and its wholly owned subsidiaries" as
Additional Insured. Upon signing of this Agreement and every year during
the term of this Agreement, Artera shall provide proof of these policies
by issuing a certificate of insurance and/or sending copies of
insurance policies to the attention of the Risk Management Department at
Distributor.
IN WITNESS WHEREOF, Artera and Distributor have duly executed this
Agreement as of the date first written above.
ARTERA GROUP, INC. FAIRPOINT BROADBAND, INC.
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
---------------------------------- -------------------------------
Name: Xxx Xxxxxxxx Name: Xxxxx X. Xxxxx
------------------------- -------------------------
Title: Sr. VP, Global Sales Title: Chief Operating Officer
------------------------- -------------------------
The undersigned, FairPoint Communications, Inc., a Delaware corporation,
hereby executes this Master Distributor Agreement soley for purposes of its
agreement to the provisions of Section 11.8 hereof as such section relates to
the Communiactions Agreement , and for no other purpose. Faripoint
Communications is otherwise not a party to the foregoing Master Distributor
Agreement.
FAIRPOINT COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
-------------------------
Title: Chief Operating Officer
-------------------------
12
Schedule 1.8
------------
LEVEL 1 SUPPORT
The purpose of Level 1 Support is to assist Subscribers and End Users in the
basic installation and usage of the Service. This includes answering general
questions to help Subscribers and End Users understand what the Service is and
how it provides a benefit to them. Level 1 Support is responsible for assisting
Subscribers and End Users with the items listed below. This list may be refined
as experience is gained and the Service evolves over time.
1. Establishing an Internet connection (typically via Windows Dial-Up
Networking), launching a Web browser and surfing to various Web sites on
the Internet.
2. Assisting in downloading the Service's End User software, running the
Service's setup program, installing the Service software on the End User's
PC and, if necessary, surfing to the Service's Web site.
3. Launching and running the Service, including answering basic questions
about the system configuration needed for running the Service (i.e.,
Windows version, memory, hard disk space) as documented on the Service's
Web site.
4. Answering basic questions about navigating within the Service's End User
interface.
5. Showing Subscribers and End Users how to know if the Service is working.
This includes pointing out the Network View, Activity View and SpeedBar.
6. Confirming that the browser is actually forwarding its requests to the Data
Center, by reviewing the Activity View and the browser's proxy settings.
7. Assisting an End User who uses a dialer other than Windows Dial-Up
Networking (e.g., Juno or NetZero) or who uses a browser other than
Internet Explorer (requiring telling the End User how manually to set the
browser's proxy settings).
8. Verifying that the Subscriber or End User has a Data Center connection
online.
9. Assisting in uninstalling the Service.
10. Explaining the Service's Firewall and how to disable it if desired
(including explaining the ramifications of disabling it). Assisting in
opening additional ports in the Service's Firewall. The Subscriber or End
User should be told that they should not run the Service's Firewall with
any other firewall.
11. Assisting in adding sites into the Service's Site Blocking list and/or Ad
Blocking list. Explaining how Ad Blocking removes ads and replaces them
with "place holder" graphics, but that this can result in what appears to
be "missing" elements on the page. Explaining how to turn off Ad Blocking
if desired (including explaining that this will reduce the speed benefits
of the Service).
13
12. Explaining how to change the image quality within the Service. This
includes explaining how to refresh the page once quality has been set to
"Best Quality." The Subscriber or End User should be informed of how to
revert back to "Best Speed" image quality setting and that if they do not
revert back to "Best Speed," the speed benefits of the Service will be
reduced.
13. Explaining what a cache is, and how to adjust its settings within the
Service.
14. Explaining what settings in the browser are changed when the Service is
running (including proxy settings, the number of requests the browser will
issue at one time and disablement of the browser's cache). The Subscriber
or End User should be told that when the Service is not running, or is
uninstalled, these settings in the browser are changed back to their
original values.
15. Answering questions about obtaining (i.e., downloading) Service product
updates and installing them.
14
Schedule 2.2
------------
PROTECTED ACCOUNTS
Subject to Section 2.2 of this Agreement, this Schedule 2.2 lists the initial
Protected Accounts, including any time limitations or other conditions that
apply with respect thereto. Unless otherwise specified in writing, a person or
entity is a Protected Account for an initial period of 3 months. If a Protected
Account does not enter into a Reseller Agreement with Distributor during the
initial period, such person or entity automatically ceases to be a Protected
Account as of the end of the initial period unless Artera grants extension(s) of
the period in writing. Each such extension shall be for an additional
three-month period unless otherwise specified in writing. Artera shall be under
no obligation to grant any such extensions. If, after the date of this
Agreement, Distributor proposes to add to the list of Protected Accounts or to
extend a Protected Account period, Distributor shall provide Artera the
information set forth below and such other information as is requested by
Artera. Any misrepresentation contained in a proposal by Distributor to add to
the list of Protected Accounts or to extend a Protected Account period shall
void the addition or extension, notwithstanding any consent to the addition or
extension by Artera.
End Date Extended End
Name of Protected Division Start Date As Date As
Account or As Protected Protected Protected
(Person or Entity) Geographical Area Account Account Account
See Attached List
15
Initial Protected Accounts
(as of November 1, 2003)
AFFILIATES
----------
Big Xxxxx Telecom Inc.
Bluestem Telephone Company
Chautauqua and Erie Telephone Corporation
China Telephone Co.
Chouteau Telephone Company
Columbine Telecom Company
C-R Telephone Company
Ellensburg Telephone Company
Fremont Telcom Co.
GTC Inc
Maine Telephone Co.
Xxxxxxxx & Scenery Hill Telephone Company
Northland Telephone Company of Maine, Inc.
Odin Telephone Exchange Inc.
Peoples Mutual Telephone Company
Xxxxxx Telephone Company
Xxxxxxxx Telephone Co.
STE/NE Acquisition Corp. d/b/a Northland Telephone of Vermont
The Columbus Grove Telephone Company
Sunflower Telephone Company, Inc.
Taconic Telephone Corporation
The El Paso Telephone Company
The Xxxxxx Telephone Company
Xxxxx City Telephone Company
YCOM Networks. Inc. 25
-------------------
WHOLESALE GROUPS
----------------
XXXXXXXXX GROUP
GREAT LAKES GROUP
US CARRIER GROUP 3
WHOLESALE CLIENTS
-----------------
Bloomingdale Communications, Inc.
CP-Tel Network Services, Inc.
CT Communications, Inc.
Com Tech
Foothills Telephone Cooperative Corp.
GoldStar Communications, LLC
Green Mountain Long Distance Service
Xxxxxxx Communications, Inc.
Hayneville Long Distance
Heart of lowa Communications Cooperative
Xxxxxxx Mutual Telephone Company
Mid-Maine Long Distance
Millry Communication, Inc.
Mulberry Cooperative Telephone Co., Inc.
People's Rural Telephone Cooperative
Ringgold Telephone Company, Inc.
RTC Long Distance
Shoreham Long Distance
TalkingNets Holdings, LLC.
Waiwick Valley Telephone Company
Xxxxxxx-Xxxxxxx Cooperative
Westelcom Network, Inc. 22
Total 50
Fairpoint Communications Confidential 11/18/2003 Page 1
Schedule 3.2
------------
ROYALTY
The Royalty is payable in U.S.A. dollars. The monthly Royalty amounts, per End
User, are as follows:
1. Residential Subscribers. The monthly Royalty amount for each residential
End User is based on whether the Reseller through which Distributor is
distributing the Service is an Internal Reseller and on whether Artera or the
Reseller associated with such End User provides and operates the Data Center
serving such End User and/or performs billing with respect to such End User, as
described in this Agreement, as provided in the table below.
---------------------- ---------------------- ---------------------- ---------------------
Reseller Billing Artera Billing Reseller Billing Artera Billing
Reseller Data Reseller Data Artera Data Artera Data
Center Center Center Center
------------------- ---------------------- ----------------------- ---------------------- ---------------------
Internal Reseller $0.75 N/A $1.25 $N/A
------------------- ---------------------- ----------------------- ---------------------- ---------------------
Other Reseller $0.75 $1.35 $1.35 $1.95
------------------- ---------------------- ----------------------- ---------------------- ---------------------
2. Small Business and Government Entity Subscribers. The monthly Royalty
amount for each End User of a Small Business or Government Entity Subscriber is
based on the number of End Users within the applicable Subscriber and on whether
Artera or the Reseller associated with such End User provides and operates the
Data Center serving such End User as described in this Agreement, as provided in
the table below. Small Business or Government Entity Subscribers with under five
End Users shall be treated as if they had five End Users, with a Royalty that is
five times the amount in the table.
------------------------ ------------------------ -----------------------
No. of End Users Reseller Artera
Within Subscriber Data Center Data Center
------------------------ ------------------------ -----------------------
5 - 9 $2.15 $2.50
------------------------ ------------------------ -----------------------
10 - 24 $2.03 $2.38
------------------------ ------------------------ -----------------------
25 - 49 $1.90 $2.25
------------------------ ------------------------ -----------------------
50 or above $1.65 $2.00
------------------------ ------------------------ -----------------------
Road Warrior + $2.50
------------------------ ------------------------ -----------------------
"Road Warrior" refers to a version of the Service used with mobile computers
that at times may be connected to the Internet through a local area network
(LAN), and at other times may be connected to the Internet on a standalone
basis. The Royalty for a Road Warrior End User is the sum of (a) the applicable
ordinary Royalty amount described above plus (b) the applicable Road Warrior
amount described above.
16
Schedule 3.3
------------
BILLING, COLLECTIONS AND PAYMENTS
For each Reseller, Distributor shall designate whether such Reseller or Artera
shall perform Service Fee billing and related services, as follows:
1. Billing by Reseller:
(a) The Reseller shall xxxx the Subscriber each month. Upon receipt of the
Service Fee, the Reseller shall deduct and retain any amount due to it
under its Reseller Agreement. The Reseller shall pay the remainder of
such Service Fee to Distributor. From such amount received,
Distributor shall pay Artera the Royalty. Payments by the Reseller to
Distributor shall be made by the 15th day of the calendar month, for
Service Fees received by the Reseller during the previous calendar
month, by wire transfer to an account specified by Distributor.
Payments by Distributor to Artera shall be made by the end of the
calendar month, for amounts received by Distributor from the Reseller
between the 15th day of the previous calendar month and the 15th day
of the current calendar month, by wire transfer to an account
specified by Artera. If a Reseller is late in its payment to
Distributor, Distributor will send to Artera a planned course of
action within five (5) days of due date and Artera and Distributor
will agree on a course of action within five (5) days of receipt of
recommendation, including agreement on which party shall bear future
collection risk if such risk is not otherwise eliminated by the
parties' agreed course of action. If Artera and Distributor are unable
to agree upon a course of action, Distributor, in its sole discretion,
may immediately terminate such Reseller, and upon notice thereof to
Artera, Distributor shall have no liability to Artera for Royalties on
Subscriptions related to such Reseller and accrued after the date of
such notice.
(b) To further assist Artera in calculating the Royalty and to enable
Resellers to activate and de-activate End User the Reseller shall
implement an electronic interface, as reasonably agreed upon by Artera
and the Reseller, between the Reseller's back office and the CRM
System. Such interface shall be via the Service's application program
interface (the "API") and shall pass to the CRM System, at a minimum,
the End User's (or prospective End User's) name, e-mail address and
unique identifier number from the Reseller, the Reseller's unique
identifier number from Artera and the Artera product identification
number. The Reseller shall also establish a non-public Web page and
provide its address and access to it to Artera, so that Artera may
report Service activations, de-activations and similar transactions
with Subscribers as described in the API documentation. Distributor
shall take reasonable steps to evaluate the creditworthiness of a
prospective Reseller prior to authorizing it to resell the Service.
2. Billing by Artera: Artera shall xxxx the Subscriber each month. Upon
receipt of the Service Fee, Artera shall deduct and retain the Royalty.
Artera shall pay the remainder of such Service Fee to Distributor.
Distributor shall, in timely fashion, pay the Reseller any amount due to it
under its Reseller Agreement. Payments by Artera to Distributor shall be
made by
17
Artera to Distributor by wire transfer once per month unless such payments
are greater than ten thousand dollars ($10,000) per month in which case
payments shall be made no less frequently than twice monthly, on the 1st
day (for amounts received from the 16th day through the last day of the
proceeding calendar month) and the 16th day of the calendar month, for
Service Fees received by Artera from the 1st day through the 15th day of
the then current month., by wire transfer to an account specified by
Distributor.
3. Subscription Periods Greater Than One Month: Notwithstanding the foregoing,
Subscription periods may be greater than one month (e.g., annual
Subscriptions). In such event, (a) the Royalty shall be based on the number
of months within the Subscription period notwithstanding any discount given
by the Reseller to the Subscriber (unless Artera agrees otherwise in
writing in advance); and (b) the Royalty for the entire Subscription period
shall accrue to Artera in the first month of such Subscription period.
4. Service Fee: The following Service Fee billing practices apply:
(a) the billing is full month for each Subscriber who licenses a Licensed
Product billed in advance for the current subscription period;
5. Collection Risk: The risk of uncollectibility from Subscribers shall be
borne by the Reseller, regardless of the party that performs the billing
with respect to the Subscriber in question (or if performed by a Reseller,
then as between Artera and Distributor, by Distributor.) Master Distributor
or its Reseller Distributor's agreements with its Reseller shall require
that, if such Reseller performs the billing, they remit the Services Fee to
Distributor, regardless of whether the Reseller has actually collected the
Service Fee from the Subscriber. Unless modified by the parties pursuant to
an agreed course of action pursuant to the final sentence of paragraph 1(a)
above, the risk of uncollectibility from Resellers shall be borne by
Distributor
6. Collection Agency: Distributor and Artera acknowledge and agree that by
providing billing services under this Agreement and Schedule (for instance,
as provided in paragraph 2 above), Artera is acting solely as a collection
agent for Distributor, and as such it holds all Service Fees received in
trust for Distributor. Artera is authorized, in its role as collection
agent, to cause itself to be paid its Royalties on all Service Fees it
collects, in a manner consistent with this Schedule 3.3.
7. Setoffs: In the event either party fails to remit to the other when due any
amounts payable under this Schedule 3.3, within ten (10) days of the due
date, such other party shall have the right to offset or withhold any
amounts unpaid from any payments otherwise due from it to the party failing
to remit under this Schedule 3.3.
8. Miscellaneous: Subject to the provisions of paragraph 5 above, Royalty
payments shall be based on subscriptions to the Service, irrespective of
actual Service Fee collections and irrespective of amounts paid by the
Reseller to Distributor. For Small Business and Government Entity
Subscribers, the designation of who performs billing, collections and
payments as described above shall not affect the Royalty amount. The one
performing
18
billing, collections and payments with respect to a Subscriber shall (a)
collect and pay to the appropriate governmental authorities all sales, use,
VAT, excise and similar taxes due with respect to the Service Fees so
processed and satisfy all reporting and filing requirements associated
therewith; and (b) keep records of all such billing, collection, payment
and tax transactions in sufficient detail to demonstrate compliance with
the procedures set forth herein. Artera and Distributor may agree in
writing from time to time, generally or in connection with specified
Resellers, to modify the procedures set forth herein, consistent with the
overall purposes and intent of this Agreement. If a Reseller is performing
billing, collections and payments, its Reseller Agreement shall require
such Reseller to take the actions described for it herein.
19
Schedule 3.4
------------
RESELLER DATA CENTERS
1. Each Data Center shall be located at the applicable Reseller's premises
unless Artera agrees otherwise in writing in advance.
2. Artera shall remotely install its Data Center software on the Reseller's
Data Center server (the "Server") so that the software functions in
accordance with Artera's specifications. Artera shall maintain such
software on the Server and shall remotely install on the Server any
upgrades to such software as they become available.
3. The minimum technical specifications for each Data Center, based on an
assumption of 7,000 total End Users, are as follows:
o Intel Pentium III, 1.3GHz or better (single processor)
o 1GB RAM
o 40GB hard drive
o CD-ROM drive
o Windows 2000 Server or Windows 2000 Advanced Server
o Dual on-board NICs (10x100)
o 5Mb of bandwidth, burstable to 10Mb
For a Data Center serving 14,000 total End Users, the minimum technical
specifications are as above, but with one additional Intel Pentium III,
1.3GHz or better processor and 1GB of additional RAM. For Data Centers
serving other numbers of total End Users, the minimum technical
specifications shall be as proposed by Artera and agreed upon with the
applicable Reseller.
4. Irrespective of its configuration or the number of End Users served by it,
the Reseller's Data Center shall provide performance levels comparable to
Artera's own Data Centers and shall have the following additional
characteristics:
o Dedicated Server approved in advance by Artera
o Server must have unrestricted outbound access to the Internet
o End Users must have inbound access to the Server on port 8081
o Artera must have access to the Server via PC Anywhere or Terminal
Services
o Reseller must provide Artera with the public Internet Protocol (IP)
address of the Server so that Artera may provide the proper End User
software
o Artera must have a trial dial-up account from Reseller to confirm
proper configuration, access and quality of service performance of the
Server
5. If a Reseller's Data Center ceases to be operational, the End Users served
by such Data Center shall be automatically redirected to Artera's own Data
Center, by which such End Users shall be served until the Reseller's Data
Center is once again operational. The Reseller shall use best efforts to
return its Data Center to operational status. If this is not
20
achieved within 72 hours of the start of the outage and the outage was not
caused by Artera's Data Center software, then, after the end of such 72
hours, for each calendar day (or part thereof) that an End User accesses
Artera's Data Center, the Royalty payable by Distributor for such End User,
for the applicable month, shall be increased by $.10.
6. The Reseller Agreement of each Reseller providing and operating a Data
Center shall incorporate the specifications and procedures set forth
herein.
21
Schedule 4.3
------------
DELIVERABLES
Within 30 days of the date of this Agreement, Artera will supply Distributor
with the following Deliverables:
1. Subscriber Software downloadable from the Internet.
2. Service documentation downloadable from the Internet.
3. Reproducible Subscriber Software installation CD, which includes
documentation.
4. Sales presentations and literature in electronic form.
5. Technical presentations in electronic form.
6. Password necessary for access to the CRM System.
22
