Exhibit 10.1

CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT
MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY
DISCLOSED.  OMISSIONS ARE DESIGNATED AS [***].

 

[gkm45hyxwi5a000001.jpg]  

CHANNEL PARTNER PROGRAM ENROLLMENT FORM

 

INFORMATION TABLE

 

“Microsoft” or “MS”:

Microsoft Corporation

“Company”:

BSQUARE CORPORATION

A company organized under the laws of State of Washington, U.S.A.

A company organized under the laws of United States

 

AGREEMENT NUMBER  

[***]

EFFECTIVE DATE

March 01, 2019

 

COMPANY TAX ID

 

COMPANY CONTACT FOR

NOTICES

[***]

BSQUARE CORPORATION  

110 110th Ave. NE Ste. 300  

Bellevue, Washington 98004

United States

[***]

 

COMPANY

ADMINISTRATOR

INFORMATION

[***]

 

 

 

TERRITORY(IES)

Canada, United States, Argentina, Brazil, Chile, Mexico, Peru, Venezuela, Puerto
Rico, Cuba, Haiti, Dominican Republic, Jamaica, Trinidad and Tobago, Guadeloupe,
Martinique, Bahamas, Barbados, Saint Lucia, Curacao, Aruba, Saint Vincent and
the Grenadines, U.S. Virgin Islands, Grenada, Dominica, Cayman Islands, Saint
Kitts and Nevis, Sint Maarten,

Turks and Caicos Islands, Saint Martin, British Virgin Islands, Sint Eustatius,

Saba, Anguilla, Montserrat, Colombia, Saint Barthelemy, Antigua and

Barbuda

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INCORPORATION OF TERMS & SIGNATURES

This Channel Partner Program Enrollment Form incorporates by reference all the
terms and conditions of the documents identified below (including any other
documents or online resources expressly incorporated by reference into such
documents) and forms the “Agreement” for purposes of Company’s participation in
the Channel Partner Program.  

 

Section Title

Reference Number & Associated Information

 

GLOBAL PARTNER

AGREEMENT

[***]

CHANNEL PARTNER

TERMS

CHANNEL PARTNER

AUTHORIZATION

 

Program Appendix

Reference Number

IOT Disti PAX

Program/Product

Enrollment

IoT Disti Products

 

CHANNEL PARTNER

PROGRAM ADDENDA

 

Addendum Included

 

INVESTMENT PROGRAM

EXHIBITS

 

 

Exhibit Title

Exhibit Term

  

  

to

  

To the extent that a provision in any one of the foregoing documents is
expressly inconsistent with a provision stated in another document comprising
the Agreement, the following order of precedence will apply:

•Additional Terms contained in Product Terms Documents will prevail over any
inconsistent provisions in Global Partner Terms, Channel Partner Terms, Program
Appendices, or Program Execution Guides;

•Provisions in Program Execution Guides will prevail over any inconsistent
provisions in Global

Partner Terms, Channel Partner Terms, or Program Appendices;

•Provisions in Program Appendices will prevail over any inconsistent provisions
in Global Partner Terms or Channel Partner Terms;  

•Provisions in Channel Partner Terms will prevail over any inconsistent
provisions in Global Partner Terms; and

•Provisions in this Channel Partner Program Enrollment Form, and any Addenda or
Exhibits will prevail over any of the foregoing documents.

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When this Channel Program Enrollment Form is executed by both parties’
authorized

representatives, it represents the parties’ entire Agreement related to
Company’s participation in Microsoft’s Channel Partner Program, and merges and
supersedes all related prior or contemporaneous oral or written communications
or agreements on this subject.  

 

MICROSOFT

COMPANY

AUTHORIZED

SIGNATURE

[gkm45hyxwi5a000002.jpg]

 

 

[gkm45hyxwi5a000003.jpg]

OEMSigner2SignHere

 

SIGNER NAME &

COMPANY ROLE (TITLE)

 

 

Simon Pettifer

 

Processor

 

 

Peter Biere

 

OCFO

 

OEMSigner2FullName

 

OEMSigner2Title

 

SIGNATURE DATE

 

MSOPSSignerDateSigned2/21/2019

 

OEMSigner1DateSigned2/15/2019

OEMSigner2DateSigned

. .

 

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IOT DISTRIBUTOR PROGRAM APPENDIX ENROLLMENT TABLE

IOT DISTRIBUTOR PROGRAM APPENDIX 5200005249

PAX BILLING

CONTACT

[***]

BSQUARE CORPORATION  

110 110th Ave. NE Ste. 300  

Bellevue, Washington 98004

United States

[***]

ADDITIONAL

COMPANY

CONTACT(s)

FOR NOTICES

[***]

BSQUARE CORPORATION  

110 110th Ave. NE Ste. 300  

Bellevue, Washington 98004

United States

[***]

.

[***]

BSQUARE CORPORATION  

110 110th Ave. NE Ste. 300  

Bellevue, Washington 98004

United States

[***].

 

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[gkm45hyxwi5a000004.jpg] 

GLOBAL PARTNER AGREEMENT

CORE TERMS (“Core Terms”)

These Core Terms, when combined with Program-specific terms, govern how we work
together on a Program. “Microsoft” and “Company” mean the respective entities
designated in the Enrollment.

1. DEFINITIONS

“Confidential Information” means a party's non-public information, know-how, or
trade secrets that

(a) the party designates as being confidential; or (b) given the nature of the
disclosure or circumstances surrounding the disclosure, the receiving party
should treat as confidential.

“Data Protection Laws” means any Laws applicable to Company or Microsoft,
relating to data security, data protection, and/or privacy, including Regulation
(EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on
the protection of natural persons with regard to processing of Personal Data and
the free movement of that data (“GDPR”).

“Enrollment” or “Program Enrollment” means a form, document, or online
enrollment process that identifies contracting parties, as well as the terms and
conditions and other documents that relate to a Program, which collectively
constitute the “Agreement” for purposes of that Program.

“Excluded License” means any license that includes the following requirement as
a condition of use, modification, or distribution of any material subject to
that license: such software, or anything combined or distributed with such
material, is required to be: (a) disclosed or distributed in source code form;
(b) licensed for the purpose of making derivative works; or (c) redistributable
at no charge.

“Force Majeure Event” means fire, casualty, or an act caused exclusively by
forces of nature, riot, terrorist act, war, labor dispute, material changes in
applicable Laws or court decree. A Force Majeure Event does not include theft or
loss, or events caused by the negligent or intentional acts or omissions of the
affected party.  

“Guide” means a document delivered to Company or published on a Partner Portal
that specifies the execution and operational details, policies, and requirements
applicable to a Program.

“Investment” means the Microsoft funds, incentives, rebates, assistance, Product
use rights, and other benefits that Microsoft may provide to Company.

“Laws” means all applicable international, national, and local laws (including
regulations and binding judicial law) as amended, extended, repealed and
replaced, or re-enacted.

“Microsoft Affiliate” means an entity that owns, is owned by, or is under common
ownership with the Microsoft entity identified in the Enrollment. Ownership
means control of more than 50% of equity interests of, or the right to direct
the management of, an entity for so long as such control exists.

“Partner Portal” means, with regard to a given Program, the website(s) through
which Microsoft may provide Company access to tools, documents, and
communications related to that Program.

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“Personal Data” means any information relating to an identified or identifiable
natural person, i.e., one who can be identified directly or indirectly by
referencing an identifier such as a name, an identification number, location
data, an online identifier, or to one or more factors specific to the physical,
physiological, genetic, mental, economic, cultural, or social identity of that
natural person. “Product(s)” means the online services, tools, software,
hardware, professional support or consulting services that Microsoft may make
available to Company under a Program.

“Program” means an engagement between Microsoft and Company under which
Microsoft may make available to Company certain rights, Investments, or other
benefits related to using, interoperating with, integrating, sublicensing,
distributing, re-selling, promoting, or marketing Products.

“Taxes” means any federal, state, provincial or local taxes, fees, charges,
surcharges, or other similar fees or charges arising as a result of or in
connection with the transactions contemplated under the Agreement and include,
sales and use taxes, value added, gross receipts taxes, utility user’s fees,
municipal occupation and license taxes, excise taxes, business and occupations
taxes, 911 taxes, franchise fees, universal service fund fees or taxes,
regulatory cost recovery and other surcharges, taxes imposed or based on or with
respect to or measured by any net or gross income or receipts (other than taxes
based upon Microsoft’s net income and any gross receipts taxes imposed in lieu
of taxes on the income or profits of Microsoft), franchise taxes, stamp taxes,
taxes on doing business, duties, tariffs, levies, and withholding taxes.

2. PROPRIETARY RIGHTS AND CONFIDENTIALITY

 

2.1

Reservation of Rights.  Except as otherwise expressly granted in the Agreement:
(i) each party owns and retains all right, title, or interest in and to its own
respective intellectual and other proprietary rights, and neither party grants
such rights to the other party; and (ii) all permitted use of Products under a
Program is by license only, and is not subject to the “first sale” or similar
doctrine under copyright or other applicable intellectual property rights Laws.
Any use in the Agreement of words such as “distribute,” “sell,” “price,” “fees,”
or similar words is for convenience only, and not to be construed that title to
any underlying intellectual property rights in the Products is being
transferred.

 

2.2

Excluded License.  Company’s rights to any Products under any Agreement do not
include any license, right, power, or authority to subject the Products to any
of the terms of an Excluded

License.  Company may use or distribute Products with other material that is
subject to an Excluded License only if such Products are used or distributed in
a manner that does not subject, or purport to subject, the Products (or any
Microsoft intellectual property related to the Products) to the terms of an
Excluded License.

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2.3

Proprietary Notices.  Neither party will remove any copyright, trademark,
patent, or similar notices from the other party’s materials without express
written consent from the other party.

 

2.4

Use of Marks.  Except as expressly provided in the Agreement, or any separate
license agreement that is incorporated into the Agreement by reference, the
Agreement does not grant either party any right, title, interest, or license in
or to any of the other party's trademarks, trade names, trade dress, or logos
(collectively, “Marks”). Company may use Microsoft’s corporate name, Product
names, and trademarks (“Microsoft Marks”) in plain text (but not logos, trade
dress, designs, or word marks in stylized form) to accurately identify and refer
to Microsoft and its technology and services. However, in making such
references, Company must refrain from use that is likely to cause confusion
about Company’s relationship with Microsoft and must comply with Microsoft’s
usage guidelines at:
https://www.microsoft.com/en-us/legal/intellectualproperty/Trademarks/ENUS.aspx
. Company will promptly correct any misuse on notice from Microsoft.  

 

2.5

No Reverse Engineering.  Company must not reverse engineer, decompile, or
disassemble any Products, except and only to the extent expressly permitted by
applicable Laws.

 

2.6

Antipiracy.  Each party will implement and enforce reasonable internal controls
to prevent unauthorized access to (or manufacture, duplication, distribution,
delivery, or use of) counterfeit, stolen, pirated, or unlicensed technology,
products, or services of the other party by the party’s employees, subsidiaries,
subcontractors, and representatives. Each party agrees to promptly report to the
other party any suspected counterfeiting, theft, piracy, unauthorized access, or
infringement of copyright, trademark, patent, or other intellectual property
rights owned or licensed by the other party, and agrees to reasonably cooperate
with the other party in the investigation of such unauthorized activities.

 

2.7

Confidentiality and Publicity  

 

(a)

If separate nondisclosure agreement is in place between Microsoft and Company,
such agreement will govern all Confidential Information exchanged between the
parties.  

 

(b)

If no such agreement is in effect, the following provisions apply to the
parties’ exchange of Confidential Information:

 

(i)

Company and Microsoft must not disclose any Confidential Information of the
other for 5 years following the date of disclosure. However, there is no time
limit on disclosure of Confidential Information that contains Personal Data. The
receiving party will not be liable for disclosure of information which: (1) it
already knew without an obligation to maintain the information as confidential;
(2) it received from a third party without breach of an obligation of
confidentiality owed to the other party; (i3) it independently developed; or
(iv) becomes publicly known through no wrongful act of the receiving party.

 

(ii)

If either party is required by a court order or applicable Laws to disclose the
other party’s Confidential Information, prior to disclosure, the disclosing
party must seek the highest level of protection available, and must give the
other party reasonable prior notice when possible to allow it to seek a
protective order.

 

(iii)

Neither party is required to restrict work assignments of employees who have had
access to Confidential Information. Neither party can control the incoming
information the other will disclose in the course of working together, or what
its employees will remember, even without notes or other aids. Neither party
will bring a claim under trade secret law, or for breach of this Agreement, to
the extent arising out of use of Confidential Information in such employees’
unaided memories in the development or deployment of each party’s respective
products or services.

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(c)

Except as otherwise required by applicable Laws or as otherwise expressly
authorized under the Agreement, neither party will issue any press release,
publicity, or other disclosure in any form that relates to the terms of the
Agreement or to a party’s relationship with the other party, including in client
presentations or client lists, without the other party’s prior written approval.

3. INVESTMENT PROGRAMS

 

3.1

Availability and Terms.  Microsoft (directly or through a Microsoft Affiliate)
may make Investments available to Company to support Company’s use,
distribution, promotion, or marketing of Products through an Investment
Program.  Microsoft may communicate available Investment Programs through
various Enrollment processes. Such communications may include reference to an
Investment Program as a Program covered by a broad Enrollment, or through a
standalone Enrollment specific to an individual Investment Program.  In each
instance, the related Investment Program will describe or identify the
eligibility, criteria, term length, and other terms and conditions applicable to
the Investment Program.  The Investment Program and related documents, including
Guides, may be delivered directly to Company or published on a Partner
Portal.  Unless a different notice period is set forth in the Investment Program
terms, Microsoft may change the terms of, or discontinue, any Investment Program
or related Guide for any reason or no reason, on 30 days’ notice to Company.

 

3.2

Participation and Eligibility.   To participate in an Investment Program,
Company must meet the Investment Program eligibility criteria. To receive
Investments under an Investment Program, Company must perform and comply with
the Investment Program terms, and must comply with any separate agreements that
may be prerequisites for Company’s participation in the Investment Program.
Participation by Company is voluntary.  Payment terms for an Investment Program
will be set forth in the applicable Investment Program terms or related Guides.

 

3.3

Verifying Investment Program Compliance.  Company must keep complete and
accurate records relating to Company’s use of any funds provided by Microsoft,
and proof of execution of activities, related to an Investment Program.
Microsoft reserves the right to execute a review or an audit of such records by
itself or through its authorized agents. If Microsoft discovers a discrepancy in
amounts paid versus amounts earned (whether through audit or through other
means), Company agrees to cooperate with Microsoft in connection with any
reviews and audits, including to provide relevant documents, and to reconcile
any errors or omissions, and promptly pay Microsoft any funds owed. In addition
to other remedies, Microsoft reserves the right to withhold amounts due to
Company under an Investment Program to offset amounts owed by Company. Provided
that a material breach of an Investment Program is not disclosed or discovered
in a previous audit, audits under this section will not be conducted more than
once in a calendar year.  

 

3.4

Termination or Suspension for Breach.  In addition to any other termination
rights specified elsewhere in the Agreement, and unless otherwise expressly set
forth in the Investment Program terms, Microsoft may terminate or suspend
Company’s participation in an Investment Program immediately for cause if
Company materially breaches any terms of any separate agreements that are
prerequisites for participation in that Investment Program.

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3.5

Taxes Related to Investment Programs.  If Microsoft (or a Microsoft Affiliate)
makes Investments available to Company, the stated amount of such Investments
will include all applicable Taxes, including net income or gross receipts Taxes.
Company will be responsible for all such Taxes that arise because of, or are
related to, such Investments. If any Taxes are required to be withheld on
payments made by one party to the other, the paying party may deduct such Taxes
from the amount owed and pay them to the appropriate taxing authority, provided,
however, that the paying party promptly secures and delivers an official receipt
for those withholdings and other documents reasonably requested by the other
party to claim a foreign tax credit or refund. The parties will use reasonable
efforts to minimize any Taxes withheld to the extent possible under applicable
Laws.

4. BUSINESS INTEGRITY PRINCIPLES

 

4.1

Compliance with Laws.  Each party will conduct its respective business
activities in full compliance with all applicable Laws. Without limiting the
foregoing, each party will:

 

(a)

comply with (i) Laws that apply to the other party’s materials or to the use,
transfer, import, export, or re-export of any Products licensed or distributed
under the Agreement (including the U.S. Export Administration Regulations and
the International Traffic in Arms Regulations); (ii) any end-user, end-use, and
destination restrictions of the U.S. and other governments; and (iii) the
guidelines related to exporting Microsoft Products
at:  http://www.microsoft.com/enus/exporting.

 

(b)

comply with all Laws (and pay the related fees and taxes that it owes) that
govern environmental protection, including Laws related to use, import,
collection, treatment, recovery, recycling, disposal, and reuse of Products
(including packaging);

 

(c)

comply with Laws that govern the rights to and protection of the other party’s
copyrights, trademarks, patents, trade secrets, and other forms of intellectual
property;  

 

(d)

comply with Laws that govern labor practices, human rights, and health and
safety;  

 

(e)

obtain any required local government approvals, each at its own expense; and

 

(f)

timely provide (at the requesting party’s commercially reasonable request and
expense), information and assistance as necessary to comply with Laws, or to
register or report to any governmental agency or certification body that
regulates or certifies the use, licensing or distribution of Products.

 

4.2

Customer Privacy and Data Security.  Each party will comply with Data Protection
Laws (as defined herein). Without limiting the foregoing, each party will:

 

(a)

not use or share Personal Data received from the other party (or its customers)
for any purpose for which it has not obtained consent;  

 

(b)

establish independent procedures for managing and responding to any
communication from a customer seeking to exercise its rights under Data
Protection Laws;  

 

(c)

provide reasonable assistance to the other in responding to any requests,
investigation, consultation, or claims from a customer, regulator, or
supervisory authority concerning Data Protection Law;

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(d)

take appropriate security measures that are required by Data Protection Laws,
and in accordance with good industry practice relating to data security; and

 

(e)

refrain from transmitting unsolicited commercial communications in any manner
that would violate applicable Laws.  

 

4.3

Business Conduct.  Each party will conduct its respective business activities
with integrity, and in full compliance with all applicable Laws relating to
business conduct. Without limiting the foregoing, each party will:

 

(a)

comply with anti-corruption Laws, such as the U.S. Foreign Corrupt Practices
Act, and other Laws prohibiting bribery, corruption, inaccurate books and
records, inadequate internal controls, and money-laundering;  

 

(b)

ensure that none of its representatives directly or indirectly pays or offers to
pay anything of value (including gifts, travel, hospitality, charitable
donations, or employment) to any candidate for political office or to any
official or employee (including elected officials or any private person acting
on behalf of a public sector entity) of any governmental entity, public
international organization, or political party, to improperly influence any act
or decision of such person for the purpose of promoting the business interests
of either party;  

 

(c)

refrain from making any unauthorized representation or commitment on behalf of
the other party;

 

(d)

ensure that all communications to its customers and the other party are
complete, truthful, accurate, not misleading, and include any required
disclosures; and  

 

(e)

refrain from retaliating against anyone who has, in good faith, reported a
possible violation of the foregoing commitments.

 

4.4

Business Conduct Training

 

(a)

Microsoft will provide regular annual training on anti-corruption laws and
business integrity principles to its employees who resell, distribute, or market
Products. For additional information on Microsoft’s commitment to
anti-corruption, see
http://www.microsoft.com/enus/legal/Compliance/anticorruption/default.aspx.

 

(b)

For Company employees in a position to influence the pricing, terms, or
conditions under which Microsoft Products are distributed, resold, or marketed
(but excluding employees engaged solely in distribution of Products to end
consumers), Company will:  

 

(i)

provide regular training on anti-corruption laws and business integrity
principles to its employees who use, resell, distribute, or market Products; or

 

(ii)

ensure (and certify upon request) that such employees regularly complete online
anticorruption training made available free of charge by Microsoft at
https://partner.microsoft.com/en-us/training/required-training .

 

4.5

Monitoring and Reporting.  If either party has a good-faith reason to believe
that the other party is in violation of anti-corruption laws in connection with
business or sales activity relating to the Agreement, it will notify the other
party with a general description of the nature of the concern, and the reason
for its belief. Company may contact Microsoft’s Anti-Corruption Alias
(ANTICPT@microsoft.com) or the Business Conduct Alias (BUSCOND@microsoft.com)
with questions or requests for further information or guidance. The parties will
confer in good faith on an appropriate and lawful approach to addressing the
concern.

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5. GENERAL

 

5.1

Relationship of the Parties

 

(a)

Non-Exclusive relationship.  The parties are working together on a non-exclusive
basis. Engagements between the parties will not be interpreted to limit either
party’s right to obtain, promote, or distribute products or services from other
sources, and will not restrict either party’s freedom to set prices for its
products.

 

(b)

Right to independent development.  Neither party is restricted from
independently developing or acquiring new products or services, improving
existing products or services, or marketing any new, improved, or existing
products or services.

 

(c)

Independent contractors.  Any use of the term “partner” is for reference
purposes only. The parties are independent contractors and do not intend to
create an employer-employee relationship, partnership, joint venture, agency
relationship, or fiduciary relationship.

 

(d)

Costs.  Each party will bear its own costs of performance under the Agreement,
unless otherwise specified.

 

5.2

Applicable Law and Venue

 

(a)

Each party consents to the exercise of personal jurisdiction by the applicable
courts and the choice of law set forth in Exhibit A (if attached), or as
otherwise designated in a Program Enrollment or Investment Program terms.

 

(b)

The United Nations Convention on Contracts for the International Sale of Goods
does not apply to the Agreement.  

 

(c)

Either party may pursue injunctive relief against the other party in any forum
to protect its intellectual property rights arising out of or related to the
Agreement.  

 

(d)

If either party employs attorneys to enforce any rights related to the
Agreement, the primarily prevailing party will be entitled to recover its
reasonable attorneys’ fees, costs and other expenses if permitted by Laws.

 

5.3

Assignment.  Microsoft may assign the Agreement (or delegate certain duties) to
a Microsoft Affiliate at any time upon 30 days’ notice, provided that such
assignment (or delegation) will not materially impair Company’s rights and
remedies under the Agreement. Except for such right, neither party may assign
the Agreement (whether by merger, asset sale, operation of law, or otherwise)
without the prior written approval of the other party, and any attempted
assignment in violation of the Agreement shall have no effect.

 

5.4

Notices

 

(a)

Legal notices under the Agreement (for example, notices related to assignment,
termination, audit, and indemnification) must be in writing (which may be in
electronic form if permitted by applicable Laws), signed by an authorized
representative, and addressed to the contacts provided by the receiving party.
Legal notices will be deemed received 7 business days after notice has been sent
via email, air express courier (charges prepaid), or by postal service (postage
prepaid, certified or registered, prepaid recorded delivery). If permitted by
the Agreement, business notices (for example, notices related to Guide updates,
and Price List changes) may be subject to different notice requirements or
delivery methods, including delivery on a Partner Portal.  

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(b)

If Microsoft makes a Partner Portal available to Company in connection with a
Program, Company will ensure that its relevant employees, agents and permitted
customers (“Company Representatives”) become familiar with the Partner Portal
and consult it on a regular basis to receive communications and business notices
from Microsoft. Company is solely responsible for managing which Company
Representatives are authorized to access and transact with the Partner Portal on
Company’s behalf.  

 

5.5

No Waiver.  Failure to enforce any provision of the Agreement will not
constitute a waiver. Any waiver must be in writing and signed by the waiving
party.  

 

5.6

Amendments.  Except as otherwise expressly permitted in the Agreement, no
amendment or modification of any provision of the Agreement will be effective
unless it is in a writing signed by authorized representatives of both parties.

 

5.7

Force Majeure.  Neither party will be liable for failing to perform under the
Agreement to the extent that a Force Majeure Event caused the failure. The party
subject to the Force Majeure Event must notify the other party and must perform
the obligations that were not performed as soon as the Force Majeure Event
stops.

 

5.8

Severability and Counterparts.  If a court of competent jurisdiction finds any
term of the Agreement illegal, invalid, or unenforceable, the remaining terms
will remain in full force and effect. The Agreement may be signed in
counterparts, which together constitute one instrument.

 

5.9

References.  The section headings and titles of the provisions of all parts of
the Agreement are for convenience only and do not affect the interpretation of
any provision. Unless specifically stated, the plural shall include the
singular. URLs are understood to also refer to successor URLs, URLs for
localized content, and information or resources linked from within the websites
at the specified URLs. All references to days will mean calendar days unless
otherwise specified.

 

5.10

English Language.  Unless required by Laws or as otherwise provided in the
Agreement, the English language version of all parts of the Agreement controls,
and communications and notices under the Agreement must be in the English
language to be effective. Any translations of the Agreement, in whole or in
part, that Microsoft may provide as a courtesy are not official or binding. If
Company is in Canada, it is the express wish of both parties that the Agreement,
and any associated documentation, be written and signed in English. C’est la
volonté expresse des parties que la présente convention ainsi que les documents
qui s’y rattachent soient rédigés en anglais.

 

5.11

Survival. Except as otherwise expressly provided, the provisions of the
Agreement requiring performance (or applying to events that may occur) after
termination will survive termination or expiration, including all terms
pertaining to confidentiality, indemnification, allocation and limitation of
risk and liability, any perpetual licenses, and ownership.

 

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EXHIBIT A

APPLICABLE LAW AND VENUE

 

MICROSOFT CONTRACTING ENTITY

CHOICE OF LAW AND VENUE

Microsoft Corporation Americas Operation Center 6100 Neil Rd.  

Reno, NV 89511

The laws of the State of New York govern the Agreement, regardless of conflict
of laws principles. The federal courts in Washington State or New York State are
the exclusive venues for all disputes arising from this Agreement. The state
courts of Washington State are the exclusive venue if there is no federal
subject matter jurisdiction. Each party consents to the exercise of personal
jurisdiction by these courts. Each party agrees that it cannot revoke this
consent.

Microsoft Ireland Operations Limited

One Microsoft Place  

South County Business Park

Leopardstown

Dublin 18, Ireland D18 P521

If Microsoft executes the Agreement by Microsoft Ireland Operations Limited, the
laws of Ireland govern this Agreement, regardless of conflict of laws
principles. The courts of Dublin, Ireland are the exclusive venues for all
disputes arising from this Agreement. Each party consents to the exercise of
personal jurisdiction by these courts. Each party agrees that it cannot revoke
this consent.

Microsoft India Corporation  

DLF Cyber Greens, 9th Floor, Tower A

DLF Cyber City, Sector 25 A

Gurgaon 122002

 

This Agreement is construed and controlled by the laws of

Singapore. Any dispute arising out of or in connection with this Agreement,
including any question regarding its existence, validity or termination, must be
referred to and finally resolved by arbitration in

Singapore under the Arbitration Rules of the Singapore International Arbitration
Centre (“SIAC”), which rules are deemed to be incorporated by reference into
this section. The language of the arbitration will be English.  The decision of
the arbitrator will be final, binding and incontestable and may be used as a
basis for judgment thereon. The courts of New Delhi shall have exclusive
jurisdiction to entertain any suits relating to enforcement of the award and/or
for award of any interim protection.

Microsoft China Company Limited

1st Floor, Microsoft Tower, LSH Plaza,

8 Wangjing Street, Chaoyang District

Beijing

100102, PRC

 

The Agreement will be construed and controlled by the laws of the People’s
Republic of China. Company consents to submit any dispute relating to the
Agreement and any addendum to binding arbitration. The arbitration will be at
the China International Economic and Trade Arbitration Commission in Beijing
(“CIETAC”) according to its then current rules.

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GLOBAL PARTNER AGREEMENT CHANNEL TERMS (“CHANNEL TERMS”)

These Channel Terms apply to Company’s distribution of Products through an
authorized distribution channel.

1. DEFINITIONS

“Claim” means a third-party action, cause of action, suit, or judicial claim
brought by a party other than Company or a Company Affiliate.

“Company Affiliate” means an entity that owns, is owned by, or is under common
ownership with Company.  Ownership means control of more than 50% of the equity
interests of, or the right to direct the management of, an entity for so long as
such control exists.

“Customer” means an individual or legal entity within the Territory that meets
the qualifying customer criteria set forth in a Program Appendix.

“Customer Agreement” means an agreement between a Customer and Microsoft, or a
Microsoft Affiliate, and the associated Microsoft license terms that govern a
Customer’s use of a Product.

“Material Discrepancy” means either (i) a material breach of the Agreement; or
(ii) amounts revealed to be owed by Company to Microsoft in excess of the
specific percentage or dollar amount threshold set forth in the Enrollment or
Program Appendix.  

“Offset” means the withholding or deduction from the payment of any invoice
amount or amount due by offset, counterclaim, or otherwise.

“Price List” means the then current list of Products from which Company may
order Products for a Product Fee under a Program Appendix.  

“Product Fee” means the royalty, commission, fee, or price to be paid for a
Product under a Program Appendix.

“Product Materials” means the materials, disclosures, and Customer Agreements
associated with a specific Product.  

”Product Terms” or “Additional Terms” means the additional terms, conditions, or
restrictions that apply to specific Products in connection with a Program.

“Relevant Records” means, collectively, the books, documents, data, records,
papers, and other information and materials related to transactions and
obligations contemplated by the Agreement.

“Program Appendix,” “PAX” or “Program Authorization” means the additional terms
applicable to a specific channel authorization, which terms may include
authorizations, license grants, restrictions, eligibility or competency
requirements, and similar terms.  

“Territory” means the geographic region designated in the Enrollment or in a
Program Appendix and in which Company is authorized to exercise its rights in
connection with the related Program.  

“Unauthorized Disposition” means theft, loss, transfer, sale, or distribution of
Product other than as expressly permitted by the Agreement, including transfer,
sale, or distribution of Product outside of the Territory or to an unauthorized
party.  

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2. GENERAL RESTRICTIONS AND OBLIGATIONS

 

2.1

General Restrictions

 

(a)

Third-Party Rights.  Except as required by Law, Microsoft grants no rights to
Company to sublicense Products, or any rights under the Agreement, to any third
parties (including Company Affiliates or subcontractors) unless such rights are
expressly provided in a Program Appendix.  

 

(b)

No Internal Use Rights.  Company may not (i) use Products acquired under the
Agreement for its own internal use; or (ii) distribute or otherwise transfer
Products acquired under the Agreement to any of its Affiliates unless, and then
only to the extent that, a Program Appendix or any Additional Terms expressly
permit such use.  

 

(c)

No Modifications.  Company may not modify any Product (or any packaging or
Product Materials) unless Microsoft directs or permits Company to do so in
writing.

 

(d)

No Conflicting Commitments.  Company may not make any representation, warranty,
guarantee, or promise with respect to any Product that would conflict with or
expand Microsoft’s obligations to a Customer or end user. Company’s instructions
to Customers on the use of Products must be consistent with any warranty
document, services terms, or end user documentation provided by Microsoft and
the Customer Agreement.

 

2.2

General Obligations

 

(a)

Technology.  Company agrees to do the following as required to perform its
obligations under the Agreement (i) provide the necessary equipment, technology,
and infrastructure; and (ii) take necessary steps, on an ongoing basis and as
applicable, to access and use Microsoft online tools and Partner Portals.  

 

(b)

Security and Unauthorized Disposition.  Company will take commercially
reasonable measures to protect Products and Product Materials under its
possession or control from any damage, destruction, or Unauthorized Disposition,
and will comply with any additional security requirements otherwise set forth in
the Program Appendix and any associated Guide.  Each party agrees to (i)
promptly notify the other party if it becomes aware of any material Unauthorized
Disposition; and (ii) reasonably cooperate to investigate the suspected
activities, and to share relevant information in furtherance of the Agreement.

 

(c)

Customer Support.  Company agrees to use commercially reasonable efforts and
professional care and skill in providing service and support to its Customers as
may be otherwise required by the Agreement.

3. PRODUCT FEES AND ORDERING, GENERAL

 

3.1

Available Products and Price Lists.  Microsoft will designate one or more Price
Lists for each Program.  The Price List(s) will include the Product Fee for each
Product.  The Program Appendix or an associated Guide will set forth the process
for ordering Products from Microsoft, and how Microsoft will make such Products
available to Company under the related Program authorization.  

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3.2

Ordering.  Company agrees to submit orders to Microsoft only in quantities that
Company can distribute in the normal course of its business.  Microsoft will
have no obligation to fulfill orders or liability to Company due to lack of
Product availability, any Product shortage, or any delay in fulfillment.
Fulfillment times are estimates only.  Microsoft may allocate Products or limit
the amount of Product available for order, including in advance of new releases
or price changes. Any terms or conditions that Company includes with its orders,
invoices or web portals, or otherwise provides to Microsoft in connection with
this Agreement, are hereby excluded and will be deemed void and will not amend
or modify this Agreement.

 

3.3

Change Management

 

(a)

Notice of Changes.  Microsoft may implement updates and changes to its Price
List, the Product Fees, available Products and Product features, Product Terms,
Product Materials, Guides, and similar documents on notice to Company as set
forth in the Program Appendix.    

 

(b)

Acceptance of Changes.  Company agrees that its ordering of a Product represents
its acceptance of the Agreement at the time the order is placed, including the
Guides, Product Fees and the Product Terms that are applicable to such Product
and also in effect at the time the order is placed.

 

3.4

Company Pricing.  Except as otherwise provided in the Agreement, Company has
full discretion to set its own pricing for the resale or distribution of
Products.  

4. REPORTING, INVOICING AND PAYMENT, GENERAL

 

4.1

Reporting.  Company will comply with any reporting obligations described in the
Program Appendix and any associated Guide. If Company fails to timely or
completely report, Microsoft may, and without waiving any other rights it may
have, suspend Company’s orders or withhold amounts due under Investment Programs
until Microsoft receives all past due reports.  Microsoft will not invoke its
right to remedies in this regard if Company reporting is late due to a Microsoft
reporting systems issue.  

 

4.2

Payment

 

(a)

Microsoft will invoice Company for Product Fees owed to Microsoft, and Company
must pay Microsoft such Product Fees on the due date and in the currency stated,
in accordance with the payment and invoicing process set forth below.  Company
will decide whether to extend credit to its Customers or resellers.  A
Customer’s or reseller’s failure to pay Company will not relieve Company of its
payment obligations to Microsoft.

 

(b)

All payments to Microsoft by Company must be made by electronic funds
transfer.  Company must provide payment remittance details at or before the time
of payment. Remittance detail must indicate the Microsoft invoice number(s) and
credit memo number(s) issued which are being paid and claimed respectively. Any
remittance sent to Microsoft’s bank after the cut-off time will not be
considered received until the following day and may become subject to late
payment penalties.

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4.3

Offsets

 

(a)

Company Offsets.  Company may not take any Offsets before Microsoft issues a
credit under a Program (and then only in the amount of such credit communicated
by Microsoft).  This includes returns, rebates, credits for Investment Programs,
price adjustments, billing errors, shipping claims, handling fees, allowances,
remittance costs, commissions, disputes, and other charges.  

 

(b)

Microsoft Offsets.  Microsoft may Offset accruals for any credit or Investments
that Company is due to amounts owed by Company to Microsoft under the
Agreement.  

 

4.4

Invoice or Payment Discrepancies.  If Company identifies a discrepancy between
any quantity, Product Fee, Investment or other amount (a) as invoiced or payable
by Microsoft, versus (b) as reported by Company or reflected in Company’s
records, then Company must report that discrepancy to Microsoft within 25 days
after the invoice issue date (or as otherwise stated in the Program Appendix or
Guides) and provide adequate and timely assistance to Microsoft to investigate
and resolve the discrepancy.  If Microsoft determines that Company has overpaid,
Microsoft will give Company a credit.  Any payment disputes will be treated
separately from Company’s obligation to pay invoices and other amounts when due,
and Company may not withhold or Offset any amounts due before the dispute is
resolved and any related credits are issued (and then only in the amount of such
credit).  

 

4.5

Late Payment.  If Company fails to cause the full invoice payment to be received
by Microsoft by the payment due date, an audit reveals an underpayment, or
Company takes an unauthorized Offset, Microsoft may take any (or any
combination) of the following actions to the maximum extent permitted by Laws,
and without waiving any other right or remedy it may possess:

 

(a)

charge interest (of no less than 1% per month, unless prohibited by Law) and
late fees on the past due amount from the first day the amount is past due until
the amount is paid in full;

 

(b)

suspend all pending orders, further shipments, or Company’s access to Products
under the

Agreement or one or more Program Appendices;

 

(c)

require the prepayment of Product Fees on future orders, place Company’s account
on hold, reduce Company’s credit limit, or require that Company provide a bank
guarantee or other form of security; or

 

(d)

withhold the past-due amount from any other amounts payable by Microsoft to
Company under the Agreement.

 

4.6

Taxes.  Company is responsible for Taxes and will pay to Microsoft any
applicable Taxes that Company owes solely from entering into the Agreement and
which are permitted to be collected by Microsoft under Laws. Microsoft will not
collect any Taxes covered by a valid exemption certificate that Company
provides. If any Taxes are required to be withheld on payments made by Company
to Microsoft, Company may deduct such Taxes from the amount owed to Microsoft
and pay them to the appropriate taxing authority, but only if Company promptly
secures and delivers an official receipt for those withholdings and other
documents reasonably requested by Microsoft to claim a foreign tax credit or
refund. Company must deliver the receipt within 60 days of payment of the Tax,
or maximum time allowed for delivery of the receipt under Laws. Company will use
reasonable efforts to ensure that any Taxes withheld are minimized to the extent
possible

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under Laws. The withholding taxes referred to in this section apply to
withholding taxes required by the taxing authorities on payments to Microsoft
only and do not include any withholding taxes suffered by Company for payments
made to Company by its Customers.  For clarity, Company will be responsible for
Taxes withheld on payments to or between Company and any Company Affiliates. If
Company does business in a jurisdiction that collects VAT, GST, or other similar
Tax, Company must provide a tax ID or business number, as applicable, upon
request.  

 

4.7

Company’s Financial Condition

 

(a)

Microsoft is under no obligation to extend credit to Company, and Microsoft
reserves the right to impose or adjust at any time the limits on any line of
credit granted to Company.  

Company will provide financial statements audited by an independent third party
to Microsoft upon Microsoft’s request to verify Company’s financial condition.  

 

(b)

If Company does not provide the requested financial statements, Microsoft may:
(i) request advance payment for any pending or future order; (ii) suspend
acceptance of orders until Microsoft receives the financial statements; or (iii)
place the account on hold or reduce the credit limit to levels deemed
appropriate by Microsoft. Furthermore, in the event of contract renewal or
extension, Microsoft may delay the renewal of the contract until the latest
financial statements, requested guarantees or satisfactory answers to
clarification(s) requested have been provided. At any time during the Term,
Microsoft may require one or more bank guarantees or other forms of security, in
amounts, in a form, and with a bank acceptable to Microsoft.

 

(c)

Company agrees to promptly notify Microsoft in case of any changes in the
structure of its organization that will materially impact how Microsoft and
Company engage under the Agreement, including: (i) significant changes in
ownership; (ii) changes in company name (both legal name, trade name and/or
business name); (iii) mergers/amalgamations/divestments; (iv) location changes;
and (v) changes in the operational activities of the organization. Changes in
relation to the legal name or registered address of the Company must be
supported by an updated tax certificate showing the tax/ VAT registration
numbers after the change and any other information or documentation reasonably
requested by Microsoft. Company must also promptly notify Microsoft of any
change of any Company notice contact name, email or other address, or other
information required by a Guide. If a Microsoft agreement number has been
assigned, the notice must also reference the applicable Microsoft agreement
number.

 

(d)

A “financial statement” means a balance sheet as of the last day of the calendar
quarter or fiscal year, an income statement, statement of cash flows, and any
related notes for the quarter and year-to-date, prepared in accordance with
“GAAP,” international financial representation standards, or other generally
accepted accounting principles in Company’s jurisdiction.  Company must clearly
note any departure in the quarterly statements from these principles.  Company’s
authorized officer must sign the statements as being legitimately representative
of Company’s books and accounts.  

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5. AUDIT, GENERAL

 

5.1

Duty to Maintain Records.  During the term of the Agreement, and for 2 years
after its termination or expiration (the “Audit Period”), Company will maintain
complete and accurate Relevant Records. The Relevant Records must not contain
any false, misleading, incomplete, inaccurate, or artificial entries.  

 

5.2

Right to Audit.  Microsoft may use a third-party auditor (“Auditor”) to review
Relevant Records and audit Company’s premises, operations, processes, and
Relevant Records during the Audit Period, to verify performance under the
Agreement.  Any third-party Auditor will (a) be independent and internationally
recognized, certified or chartered, (b) not be hired on a contingency basis; and
(c) be instructed by Microsoft to treat Company’s Confidential Information in
accordance with applicable professional standards and the confidentiality
requirements in Section 2.7 (Confidentiality and Publicity) of the Core Terms.
Except for with respect to Investment Programs, Microsoft will not audit Company
more than one time per calendar year to verify performance under this Section 5
unless a prior audit has revealed a Material Discrepancy or noncompliance with
Section 4 (Business Integrity Principles) of the Core Terms.  

 

5.3

Audit Procedure

 

(a)

Microsoft will provide not less than 30 days’ prior notice to Company before
beginning an audit. Audits will take place during Company’s regular business
hours, and the Auditor will use commercially reasonable efforts to avoid
disrupting Company’s operations. Company personnel may escort the Auditor on
Company’s premises.  If an audit is conducted with notice, Company will have all
Relevant Records and operations available to the Auditor at the beginning of the
audit.  Microsoft may have the Relevant Records audited at multiple sites to
verify performance under the Agreement. At Microsoft’s option, Company will make
all Relevant Records, available to Auditor at one location. If Relevant Records
are co-mingled with Company’s other non-relevant and confidential information,
Company may redact the Relevant Records with respect to the other non-relevant
and Confidential Information.  Company will provide reasonable access to
Microsoft or its Auditor to facilitate the audit and permit Microsoft or its
Auditor to copy records. At Microsoft’s request, Company will make relevant
employees available to the Auditor during the audit. Microsoft will provide
Company with a summary of the audit findings upon request.

 

(b)

If Microsoft has credible and reliable evidence that counterfeiting, piracy or
corruption may have occurred, Microsoft or its Auditor may enter Company’s
premises without notice to investigate compliance with the Agreement. Company
must use reasonable efforts to cooperate with Microsoft to carry out an
investigation of the suspected activities. If an investigation results in a
referral to law enforcement agencies, or if Microsoft initiates other legal
action to enforce its rights against responsible parties, Company agrees to
provide reasonable and timely cooperation and information.

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5.4

Payment of Audit Costs and Amounts Due.  Microsoft will pay the cost of audit
expenses for verifying Company’s compliance with the Agreement except as
provided below. If the audit reveals any discrepancy, Company must promptly pay
Microsoft any unpaid amounts due, together with any applicable late fees and
interest, calculated from  the date on which such amount became due to Microsoft
from the Company, and promptly correct any errors or omissions disclosed by the
audit. If the audit reveals a Material Discrepancy, Company must also promptly
reimburse Microsoft for the reasonable costs of the audit.  

6. WARRANTIES, DISCLAIMERS AND REMEDIES, GENERAL

 

6.1

NO IMPLIED WARRANTIES OR REPRESENTATIONS.  EXCEPT AS EXPRESSLY PROVIDED IN A
PROGRAM APPENDIX, ALL PRODUCTS ARE PROVIDED TO COMPANY “AS IS.” THE FOREGOING
“AS IS” WARRANTY, AND ANY WARRANTIES EXPRESSLY SET FORTH IN A PROGRAM APPENDIX,
ARE THE ONLY WARRANTIES MADE BY EITHER PARTY TO THE OTHER.  NEITHER PARTY MAKES
ANY OTHER WARRANTIES, REPRESENTATIONS, CONDITIONS OR GUARANTEES TO THE OTHER
RELATED TO THE AGREEMENT.  TO THE MAXIMUM EXTENT PERMITTED BY LAWS, EACH PARTY
DISCLAIMS ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR
PURPOSE.

 

6.2

HIGH RISK USE WARNING.  THE PRODUCTS ARE NOT DESIGNED OR INTENDED FOR HIGH RISK
USE SCENARIOS WHERE FAILURE OR FAULT OF ANY KIND OF THE PRODUCT COULD REASONABLY
BE SEEN TO LEAD TO DEATH OR SERIOUS BODILY INJURY, OR TO SEVERE DAMAGE TO
TANGIBLE OR INTANGIBLE PROPERTY OR THE ENVIRONMENT.

 

6.3

NO WARRANTIES FOR OTHER ITEMS.  EXCEPT AS EXPRESSLY PROVIDED IN A PROGRAM
APPENDIX, MICROSOFT MAKES NO WARRANTIES, REPRESENTATIONS, OR CONDITIONS AS TO
ITEMS DISTRIBUTED UNDER A THIRD-PARTY NAME, COPYRIGHT, TRADEMARK OR TRADE NAME
THAT MAY BE OFFERED OR COMBINED WITH OR INCORPORATED INTO THE PRODUCTS.  TO THE
MAXIMUM EXTENT PERMITTED BY LAWS, MICROSOFT WILL HAVE NO LIABILITY IN CONNECTION
WITH THE THIRD-PARTY ITEMS (SUCH AS ANY SUPPLY OR FAILURE TO SUPPLY THEM).

7. DEFENSE OF THIRD-PARTY CLAIMS, GENERAL

 

7.1

Application.  Each Program Appendix will identify whether indemnity or defense
obligations apply to that channel authorization and the related terms.  In the
event that a Program Appendix requires a party (a “Defending Party”) to defend
at its own expense the other party (the “Tendering Party”) in a Claim, and to
pay a judgment or settlement in such Claim, such requirement will be subject to
the conditions and limitations set forth in the Agreement, including those in
Section 7.2 below  

 

7.2

Conditions

 

(a)

The Tendering Party must promptly notify the Defending Party in writing of the
Claim, specifying the nature of the claim and the relief sought.  

 

(b)

Except as set forth below, the Defending Party will have sole control over the
defense and/or settlement of the Claim, and the Tendering Party must provide the
Defending Party with reasonable assistance in the defense of the Claim (for
which the Defending Party will reimburse the Tendering Party’s reasonable out of
pocket expenses).  The Tendering Party will have the right to employ separate
counsel and participate in the defense at its own expense.  

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The Defending Party may not settle the Claim without the Tendering Party’s prior
written consent, which consent cannot be unreasonably withheld, conditioned or
delayed (except if the settlement requires no expense to or affirmative action
by Tendering Party).  Neither party will acknowledge or admit fault or liability
on the other’s part nor publicize any settlement without the other’s prior
written consent, which consent cannot be unreasonably withheld, conditioned or
delayed.  

 

(c)

In a multi-party action that includes Claims for relief directed to both
Microsoft and Company, each party will reasonably cooperate on a defense
strategy to limit the overall liability for all parties across all Claims in the
action.  Such cooperation will include providing specific information,
witnesses, and evidence to support Microsoft and Company’s legal theories.

 

(d)

If Microsoft receives information concerning a covered intellectual property
Claim, Microsoft may, at its option and expense, and in addition to its other
rights under the Agreement, undertake further actions to mitigate or resolve the
Claim such as: (i) procure the copyright, trademark, or patent rights, or
licenses to address the Claim; (ii) replace or modify the Product or trademark
to make it non-infringing; or (iii) if Microsoft reasonably determines, after
the exercise of commercially reasonable efforts,  that neither of the foregoing
are feasible, refund the Product Fees paid for affected Products in accordance
with the provisions set forth in the associated Guides.  

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8. LIMITATIONS ON LIABILITY, GENERAL

 

8.1

TO THE EXTENT PERMITTED BY LAWS, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
ANY DAMAGES FOR LOSS OF PROFITS OR REVENUES, BUSINESS INTERRUPTION, OR LOSS OF
BUSINESS INFORMATION OR DATA, OR FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL,
INDIRECT, OR PUNITIVE DAMAGES.

 

8.2

THE TOTAL CUMULATIVE LIABILITY (IF ANY) OF EITHER PARTY TO THE OTHER UNDER A
PROGRAM APPENDIX (INCLUDING ASSOCIATED INVESTMENT PROGRAMS) IS LIMITED TO DIRECT
DAMAGES IN AN AMOUNT NOT TO EXCEED 100% OF THE PRODUCT FEES PAID, DUE OR OWING
BY COMPANY TO MICROSOFT UNDER THE PROGRAM APPENDIX DURING THE 12-MONTH PERIOD
PRIOR TO THE DATE ON WHICH THE RIGHT TO ASSERT A CLAIM FIRST AROSE, MINUS ANY
AMOUNTS PAID BY THE LIABLE PARTY DURING THE SAME PERIOD FOR ANY PRIOR LIABILITY
UNDER THE PROGRAM APPENDIX, OR AN AMOUNT AS OTHERWISE INDICATED IN THE PROGRAM
APPENDIX. UNLESS OTHERWISE PROVIVED IN THE PROGRAM APPENDIX, IF THE PROGRAM
APPENDIX HAS BEEN IN EFFECT FOR LESS THAN 12 MONTHS, DIRECT DAMAGES WILL NOT
EXCEED THE AVERAGE MONTHLY PRODUCT FEES PAID, DUE OR OWING MULTIPLIED BY 12. IF
A PRODUCT DOES NOT REQUIRE PAYMENT OF PRODUCT FEES, THE AMOUNT USED FOR
CALCULATING THE CAP WILL BE $10.00 PER UNIT OF PRODUCT USED OR DISTRIBUTED BY
COMPANY DURING THAT PERIOD.  

 

8.3

THE LIMITATIONS ON LIABILITY AND ALLOWABLE DAMAGES WILL NOT APPLY TO EITHER
PARTY'S (I) LIABILITIES FOR UNAUTHORIZED USE OR UNAUTHORIZED DISPOSITION OF THE
OTHER PARTY’S INTELLECTUAL PROPERTY (INCLUDING VIOLATION OF ANY LICENSE GRANTS
AND LIMITATIONS, OR CONFIDENTIALITY OBLIGATIONS IN THE AGREEMENT); (II)
OBLIGATIONS TO DEFEND AND PAY THIRD-PARTY CLAIMS; (III) BREACH OF THE BUSINESS
INTEGRITY PRINCIPLES SET FORTH IN THE CORE TERMS; OR (IV) FRAUD AND GROSS
NEGLIGENCE.  MICROSOFT AND COMPANY AGREE THAT ALL LIMITATIONS ON LIABILITY AND
EXCLUSIONS ON ALLOWABLE DAMAGES SHALL APPLY EVEN IF ANY REMEDIES FAIL OF THEIR
ESSENTIAL PURPOSE.  

 

8.4

MICROSOFT AND COMPANY AGREE THAT A PARTY’S LIABILITY FOR ANY DAMAGES OR
INDEMNITY SHALL BE REDUCED TO THE EXTENT THAT THE OTHER PARTY OR ITS AGENTS
CAUSED OR CONTRIBUTED TO THE HARM GIVING RISE TO THE DAMAGES OR INDEMNITY
OBLIGATION.

9. INSURANCE REQUIREMENTS, GENERAL

 

9.1

General Requirements.  Throughout the Agreement term, Microsoft and Company will
each maintain sufficient insurance or a program of self-insurance to cover its
risks and obligations under the Agreement. Upon request, a party will provide a
certificate of such coverage to the other party to verify its compliance with
this provision.

 

9.2

Program Requirements.  Microsoft and Company each agree to comply with any
additional insurance requirements specific to a Program as may be required by
the related Program Appendix.

 

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CHANNEL PARTNER PROGRAM  IOT DISTRIBUTION PROGRAM APPENDIX (“IoT Disti PAX”)

This IoT Disti PAX enables Company to distribute Products through Microsoft’s
IoT Distribution channel subject to Company’s ongoing compliance with the
Agreement.

1. DEFINITIONS

“Additional Term” or “AT” means a term, condition or restriction described in
the Product Terms Document to apply to a specific Product, in addition to the
generally-applicable license provisions set forth in the Agreement.

“Associated Product Material” or “APM” means the materials associated with a
specific Product that must be distributed together with that Product if
specified by Microsoft. APM does not include Authenticity Tags.  

“Authorized Replicator” or “AR” means a Microsoft-authorized replicator and
supplier of APM or Authenticity Tags.

“Authenticity Tags” means physical labels or other Microsoft-designated indicia
of authenticity related to a given Product, such as a COA.

“Authorized Subcontractor” means a third-party installer (previously referred to
as “Third-party Installer” or “TPI”) or integrator that has entered into an
agreement with a Qualified Customer as required in the CLA to engage in certain
limited activities with Microsoft on a Qualified Customer’s behalf under the
Agreement.

“Certificate of Authenticity” or “COA” means a Microsoft authenticity
certificate or label designated for certain Products

“CLA” means the OEM Customer License Agreement for Customer Systems executed by
and between Microsoft and a Qualified Customer.

“Customer System” means computing devices that a Qualified Customer distributes
with Product, as further specified in this IoT Disti PAX and any applicable
Additional Terms.  

“Default Charge” means an amount owed as liquidated damages for each
Unauthorized Disposition or other specified event of default.

“Embedded Application” means an industry or task-specific software program
and/or function with the following attributes:

 

(a)

it provides the primary functionality of the Customer System; and

 

(b)

it is designed to meet the functionality requirements of the specific industry
into which the Customer System is marketed and distributed, and it may offer
functionality in addition to the Product.  

“Image” means the Microsoft Binaries and the OEM Binaries.  

“Microsoft Binaries” means the redistributable portions of the Product, in
object code form, that a Qualified Customer includes in an Image.

“OEM Binaries” means all software, other than Microsoft Binaries, installed on a
Customer System by or on behalf of a Qualified Customer. OEM Binaries includes
Embedded Applications.

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“Price List” means, for the purpose of this IoT Disti PAX, the list of Products
and associated Product Fees, as may be amended by Microsoft from time to time.

“Product(s)” means, for purposes of this IoT Disti PAX, the online services,
tools, software, hardware, professional support or consulting services,
including Updates, that Microsoft may make available under this IoT Disti PAX.

“Product Components” means Product, associated Authenticity Tags, any recovery
image provided on media approved by Microsoft, Product Keys and Associated
Product Materials.

“Product Key” means a unique identifier key, that is required to activate a
Product.

“Product Recall” means the recall of any Product that Microsoft voluntarily
decides to recall or that Microsoft is legally required to recall.  

“Product Terms Document” means the document, published by Microsoft on the
Partner Portal, containing Additional Terms.

“Qualified Customer” means an original equipment manufacturer of one or more
Customer Systems that has an active signed CLA.  

“Recovery Image” means a copy of the Image as originally installed on the
Customer System. A Recovery Image is used to reinstall the Image.  

“Reporting Guidelines” means the Sales-Out and Royalty Reporting Guidelines
posted on the Partner Portal.

“Sample Code” means the software marked as “sample” or delivered in a folder
marked “sample” that may be included as a part of the Product. Sample Code may
be in source code or object code format.  

“Standards” means publicly available technical specifications or standards for
interoperability that are developed or published by a government-sponsored,
industry-sponsored, or contractually-formed group (or any similar organization)
that creates or licenses such specifications or standards and that may require
licensing for use of patents. “Standards” are deemed to include such
specifications or standards developed or published by a single company or
organization other than Microsoft (e.g., the VP9 codec specification and other
technical specifications independently developed by third parties).

“Suppliers” means Microsoft, or a Microsoft Affiliate designated by Microsoft,
and other licensors or suppliers of Product or portions of Product.

“Telecommunication Standards” means telecommunications Standards and any related
successors or derivatives, including Global System for Mobile (Communications)
(GSM), General Packet Radio Services (GPRS), Code Division Multiple Access
(CDMA), Single Carrier Radio Transmission Technology

(CDMA/1xRTT), Long Term Evolution (LTE), Worldwide Interoperability for
Microwave Access (WiMAX),

Evolution-Data Only or Evolution-Data Optimized (“EV-DO”, “EVDO”), Enhanced Data
rates for GSM Evolution (“EDGE”), and other such Standards that Microsoft may
periodically identify on the Partner Portal.

“Time Sensitive Event” means a Claim, a Product Recall, a material Product
defect or deficiency, or a governmental or regulatory request that Microsoft
determines requires Company to cease distribution.  

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“Unauthorized Disposition” means, for the purposes of this IoT Disti PAX, means
theft, loss, transfer, sale, or distribution of Product, Product Keys or
Authenticity Tags other than as expressly permitted by the Agreement, including
transfer, sale, or distribution of Product, Product Keys or Authenticity Tags
outside of the Territory  

“Update” means a royalty-free replacement or re-release of a Product.

“Updated Image” means an Image that includes

 

(a)

an updated version of the Microsoft Binaries (including an Update);

 

(b)

an updated version of the OEM Binaries; or

 

(c)

an updated version of the Microsoft Binaries and an updated version of the OEM
Binaries.

An Updated Image may include the previously distributed version of the Microsoft
Binaries or the OEM Binaries, but not both. Additionally, an Updated Image need
not be a full replacement Image and may consist only of an Update. All
references to Updated Image shall also pertain to Updates unless specifically
stated otherwise.

2. GENERAL RIGHTS, RESTRICTIONS, AND OBLIGATIONS

 

2.1

Distribution Rights and Restrictions under this IoT Disti PAX

(a) License.  Company may distribute Products together with all required Product
Components, as specified in the Additional Terms and Guides, to Qualified
Customers located in the Territory, and may also distribute Products to
Authorized Subcontractors s worldwide (subject to any additional terms
applicable to worldwide distribution in the Guides). Except as expressly allowed
in the Agreement, Company will not distribute, sublicense, lease, rent, loan or
otherwise transfer the Authenticity Tags, APM, or the Product to any third
party.

(b) Restrictions

 

(i)

No Modification of Product Components.  Except as expressly permitted in the
Agreement, Company will not modify or translate any of the Product
Components.  Company will distribute the Product in the same form/packaging as
received from the AR or Microsoft, or a Microsoft Affiliate designated by
Microsoft. Company will not modify or remove any part of the contents or
packaging of the Product.

 

(ii)

Removal of Product from Partner Portal.  If Microsoft has removed a Product from
the Partner Portal, Company may only continue to distribute the Product until
the earlier of:

 

(A)

the Product distribution end date that is set by Microsoft; and

 

(B)

termination or expiration of the Agreement or this IoT Disti PAX.

 

(iii)

No Distribution to Other Microsoft IoT Distributors.  Unless otherwise provided
in writing from Microsoft, Company may not deliver Product to any other company
that has an effective IoT Disti PAX.

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2.2

Distribution to Qualified Customers.  Company must verify via the designated
Partner Portal that each Qualified Customer has an active CLA. If a potential
Qualified Customer does not have an active CLA in place, Company must ensure
that the potential Qualified Customer executes a CLA prior to distributing
Product to such potential Qualified Customer. Upon request, Company will assist
the potential Qualified Customer in signing a CLA in accordance with the
procedures described in this section.  

 

(a)

Potential Qualified Customers.  Company will perform the following steps for
each potential Qualified Customer that elects to sign a CLA as required by this
IoT Disti PAX:

 

(i)

ensure that the potential Qualified Customer’s physical or street address is
within the Territory before the potential Qualified Customer signs a CLA;

 

(ii)

notify each potential Qualified Customer that only an authorized signatory of
the prospective Qualified Customer may execute the CLA;

 

(iii)

ensure that the potential Qualified Customer signs the most current CLA form;

 

(iv)

instruct the potential Qualified Customer to review the applicable Product Terms
Document before the Qualified Customer first licenses any Product; and

 

(v)

verify that the information provided by the potential Qualified Customer is
complete and correct.

 

(b)

Qualified Customers.  Company:

 

(i)

may provide Recovery Images and Update Images to Qualified Customers as received
from an AR and in accordance with the Guide;  

 

(ii)

may provide Updates on external media and any related Additional Terms to
Qualified

Customer as received from an AR or Microsoft; and  

 

(iii)

will forward to Microsoft the Qualified Customer-signed originals of any
hardcopy CLAs returned to Company in time for sales-out reporting.

(c) Notices to Qualified Customers

 

(i)

Company will instruct each Qualified Customer that Qualified Customers may only
distribute Products:

 

(A)

as part of the Qualified Customers’ Customer Systems;

 

(B)

that were obtained by the Qualified Customers directly from a
Microsoft-authorized distributor; and  

 

(C)

in accordance with the CLA and the Product Terms Document.

 

(ii)

Company will instruct each Qualified Customer that Qualified Customers may only
reproduce and distribute Update Images, Updates, and Recovery Images in
accordance with the CLA.

 

(d)

Early Product Distribution.  Microsoft agrees that between the time Company has
been notified that the Qualified Customer has signed the CLA and the date
Microsoft countersigns the CLA (a) Company may distribute Products to the
Qualified Customer, and (b) that, as between Microsoft and Company, the CLA will
be deemed countersigned by Microsoft.  

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(e)

Cease Distribution to Qualified Customers.  Company will cooperate with
Microsoft in investigating instances of unauthorized distribution of Products by
Qualified Customers. Upon notice from Microsoft, Company will promptly
discontinue distribution of Product to Qualified Customers. Company will make
commercially reasonable efforts to retrieve any Products previously distributed
to such Qualified Customers.

 

(f)

No Conflicts.  Company will ensure that any agreement that it has with a
Qualified Customer is consistent with Company’s rights and obligations under the
Agreement. Company will not provide to Qualified Customers any non-Microsoft
information that conflicts with, supersedes, or purports to supersede the CLA or
the Product Terms Document.

 

2.3

Ordering Product from Authorized Replicators

 

(a)

Company may only acquire APM and Authenticity Tags from ARs. A list of ARs is
available on the Partner Portal. Microsoft may update that list from time to
time. Unless Company has prior written authorization from Microsoft, Company
must require ARs to ship the APM and Authenticity Tags to premises owned or
controlled by Company in the Territory.  

 

(b)

Company will order and acquire from an AR (or Microsoft, or a Microsoft
Affiliate designated by Microsoft) only those Products listed on the designated
Partner Portal.

 

(c)

Company may order Recovery Images and Update Images (on behalf of Qualified
Customers) that are based on Products listed on the designated Partner Portal.
Recovery Images and Update Images may only be distributed to Qualified
Customers, or Authorized Subcontractors on behalf of Qualified Customers.

 

(d)

Microsoft may require ARs to refuse or limit orders placed by Company in
quantities greater than Microsoft reasonably determines that Company will be
able to make timely payment for or distribute. Microsoft will give Company
written notice if it takes this action.

 

2.4

Internal Development, Testing, and Qualified Customer Support. Company may
acquire Product software and a commercially reasonable number of Product Keys
strictly for internal development, testing, training, and/or Qualified Customer
support purposes only in nonproduction environments on Company premises.

 

2.5

Product Support.  Company agrees to use commercially reasonable efforts and
professional care and skill in providing service and support for the Products to
Qualified Customers. Company will advise Qualified Customers to contact Company
for support. During the Term, Company will maintain a valid technical support
services contract for the Products through Microsoft OEM Services for Embedded
Partners or with a third party for an equivalent level of such services. Company
may demonstrate to Microsoft that Company itself provides an equivalent level of
such services. Should Microsoft, in its sole discretion, determine that
Company’s services are of an equivalent level, Microsoft may deem that such
services may be relied upon in lieu of such contract.  Company will provide
Microsoft with 90 days’ prior written notice of any substantive change in
Company’s support policy for Products. If Company chooses to acquire support
through Microsoft, Company agrees that Microsoft may charge applicable support
fees under such contract.

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2.6

Other Parties

 

(a)

Independent Controllers.  Unless Microsoft and Company enter into additional
terms addressing processing of Personal Data, they agree that they are each
acting as independent controllers for purposes of any Personal Data used or
shared under this Program and, as such, they will each independently comply with
any applicable Data Protection Law that pertains to independent controllers.

 

(b)

Microsoft Affiliates.  Microsoft Affiliates are third-party beneficiaries of the
Agreement. If the doctrine of third-party beneficiaries is not recognized in the
applicable jurisdiction, the parties agree that while Microsoft’s Affiliates are
not parties to the Agreement, the Microsoft entity designated in the Enrollment
is a trustee of Microsoft’s Affiliates for the limited purpose

of holding in trust those rights in favor of Microsoft’s Affiliates. The parties
agree that a Microsoft Affiliate may enforce such rights without being required
to add the Microsoft entity designated in the Enrollment as a party to any
proceedings for such enforcement.

 

(c)

Company Affiliates.  Company may not authorize a Company Affiliate to perform
Company’s obligations under this IoT Disti PAX without Microsoft’s prior express
written approval.  

 

2.7

No Company CLA.  Company will not execute a CLA unless expressly permitted by
Microsoft. Company is not permitted to act as a Qualified Customer.

3. AVAILABLE PRODUCTS  

 

3.1

Available Products and Price List

 

(a)

The Price List will identify the specific Products that Company is authorized to
distribute under this Program. The Price List or the Enrollment may also
identify any related Product Terms and Guides specific to the authorized
Products. Company’s eligibility to continue distributing Products under this IoT
Disti PAX under any special pricing, discounts, or incentives may be subject to
Company meeting certain distribution volumes and capabilities.  

 

(b)

Product Fees are stated as a base list price, before applying any taxes, duties,
fees, excises, or tariffs. Listed Product Fees do not reflect any: (i)
incentives, discounts, or rebates for which a Product may be eligible; (ii)
additional Default Charges that Company may owe to Microsoft as the result of
its breach of the Agreement; or (iii) possible additional charges from third
parties for media, Authenticity Tags, or APM, for which Company is responsible.
Any exceptions applicable to Company’s duty to pay the Product Fees for a given
Product will be set forth in the Guide.

 

3.2

Change Management.  Microsoft may implement updates and changes to its Price
List, the Product Fees, the Territory, available Products and Product features,
Product Terms, Product Materials, and Guides by providing written notice
directly to Company or by notice issued via the Price List or a Partner
Portal.  

 

(a)

Changes to Product Fees.  Microsoft may lower or raise Product Fees for existing
Products at any time and for any reason or no reason via an update to the Price
List.

 

(b)

Changes to Available Products and Product Features and Functionality. At least
15 days prior to the first day of each month, Microsoft will post the Price List
for the upcoming month on the Partner Portal.  Microsoft may modify the Price
List upon any monthly update cycle.

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Submission of Product orders to ARs or distribution of Product after the
effective date of any modifications to the Price List will constitute Company’s
acceptance of such modifications. The new Price List will be effective on the
date specified on the Price List or, if no date is specified, upon notice of the
change.

 

(i)

Microsoft may add new Products to the Price List at any time without notice.

 

(ii)

Microsoft may remove a Product (or form factor, version or SKU) from the Price
List at any time without notice. Microsoft will use reasonable efforts to
provide 30 days’ notice before such removal becomes effective unless the removal
relates to a Time Sensitive Event a currency fluctuation event, or a cease
distribution event.

 

(iii)

Microsoft may modify an existing Product to add new features or functionality or
remove existing features or functionality at any time without notice. Microsoft
will use reasonable efforts to provide 30 days’ notice before a material
modification becomes effective unless

the modification relates to a Time Sensitive Event, a currency fluctuation
event, or a cease distribution event.  

 

(c)

Changes to Guides.  Microsoft may modify any Guide arising under this IoT Disti
PAX with 30 days’ prior notice.

 

(d)

Changes to Territory.  Microsoft may change the approved Territory at any
time.  Microsoft will give Company at least 90 days’ prior notice before it
reduces the geographic regions included in approved Territory.

 

3.3

Cease Distribution Events.  Company will not distribute or market any Products
for which it has received notice from Microsoft to cease distribution.  Upon
receipt of such notice from Microsoft, Company will use reasonable efforts to
cease distribution and marketing of affected Products within the time periods
described in subsections (a) and (b) below and will cooperate and comply with
Microsoft’s instructions regarding the disposition of such Products.

 

(a)

Time Sensitive Cease Distribution Events.  In the event of a Time Sensitive
Event, Company will use reasonable efforts to cease distribution and marketing
of the affected Product immediately upon notice from Microsoft.

 

(b)

Other Cease Distribution Events.  In scenarios other than a Time Sensitive
Event, Company will cease distribution and marketing of the affected Product
within 30 days of the date of notice from Microsoft.

 

(c)

Responsibility for Product Fees.  Microsoft will issue a credit to Company for
the Product Fee paid for the affected Product if it issues a cease distribution
notice under Sections 3.3(a) or (b), unless the applicable Product Terms or
Guide provide otherwise.  

 

(d)

Duty to Mitigate.  If Microsoft issues a notice to cease distribution to Company
and Company continues to distribute and market the affected Product after the
time periods described in subsections (a) and (b) above, then Microsoft will
have no duty or liability arising from Company’s continued distribution and
marketing in violation of such notice, including under Section 7 (Defense of
Third Party Claims, General) of the Channel Terms or Section 7 below.  

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3.4

Product Ownership.  This IoT Disti PAX does not give Company title to any
Product, packaging, papers, materials, or other property of Microsoft related to
a Product. Microsoft retains title to all APM and Authenticity Tags (and related
materials) from the time that the Product is acquired by Company until Company
distributes the Product to the Qualified Customers or an OM on behalf of the
Qualified Customer. In no circumstances will any receiver or trustee of Company
be entitled to sell or distribute any Product obtained by Company pursuant to
this IoT Disti PAX.

4.  REPORTING, INVOICING, PAYMENT, AND RETURNS

 

4.1

Reporting.  Within 15 days after the end of each calendar month, Company will
provide a report as required by the then-current Reporting Guidelines. Company
must provide a final report 15 days after the Agreement or this IoT Disti PAX
terminates or expires. If Company does not provide a sales-out report within the
time-period provided in this Section 4.1 and fails to provide a salesout report
after 30-day notice sent by Microsoft, Microsoft may place on hold new orders
from Company. Company will be unable to place new orders under this IoT Disti
PAX until all past due sales-out reports are submitted.

 

4.2

Invoicing and Payment

(a) Invoices.  For each unit of Product distributed by Company, Company agrees
to pay Microsoft the Product Fee in the Price List in effect during the month in
which Product is shipped by Company. For each Product licensed under this IoT
Disti PAX, Microsoft will invoice Company for the royalties and other amounts
due for each month. Microsoft will post any applicable invoice on the Partner
Portal within 3 business days after the date of invoice. Microsoft will also
provide invoices by mail if required by Laws or requested by Company.  

(b) Payment

 

(i)

Payment Due Date. Company must remit one payment to Microsoft as specified in
the Reporting and Payment Schedule. Payments are due no later than 45 days after
the end of each calendar month in which Company is reporting (“Payment Due
Date”). Company will pay each invoice by the Payment Due Date. Company must
include the Microsoft Agreement number and the Microsoft invoice numbers with
each payment. Payments exclude any taxes, duties, fees, excises or tariffs
imposed on any of the Company’s activities in connection with the Agreement.
Company must pay these charges, taxes and other fees. Royalties also exclude any
charges by the AR for Authenticity Tags or APM.  

 

(ii)

Currency. All payments will be made in US Dollars, unless otherwise specifically
provided in this IoT Disti PAX, the Program Enrollment, or a Guide. If Microsoft
(China) Company Limited is the Microsoft contracting entity or a Microsoft
Affiliate under the Agreement, with respect to Company’s transactions with
Microsoft (China) Company Limited, all payments must be in Renminbi (CNY) and
amounts owed will not be satisfied by a tender or any recovery pursuant to any
judgment that is expressed in or converted by Microsoft to any currency other
than CNY. Microsoft will establish the exchange rate for a given month by using
the London spot close foreign exchange rate published in Reuters two business
days prior to the last business day of the previous month. Such exchange rate
will apply against orders fulfilled during the applicable month and will be
reflected in the corresponding invoice. Notwithstanding this, Microsoft reserves
the right to modify the process of conversion from US Dollars to Renminbi (CNY),
provided that Microsoft gives 90 days prior notice to Company.

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(c)  Late Payment. In addition to the remedies set forth in Section 4.5 (Late
Payment) of the Channel Terms, if Company fails to pay any royalty or other
payment due under this IoT Disti PAX by the applicable due date, then Microsoft
may:

 

(i)

assess a non-recurring late charge of 1% on the past due amount;  

 

(ii)

assesses a recurring late charge on the past due amount at an annual rate equal
to 12% (accruing daily from the Payment Due Date through the date of actual
payment); and

 

(iii)

require ARs to suspend all pending Company orders. Microsoft will charge late
fees to the extent permitted by Laws. If Microsoft charges late fees, it will be
without prejudice to any other right or remedy available.

 

4.3

Reporting Error.  If Company discovers a reporting error, Company will report
the error to Microsoft in writing within 3 calendar months after the end of the
calendar month in which the Product was distributed.

 

4.4

Returns. Company will manage any returns of Product in accordance with the
applicable Guide.  

5.  AUDIT.  The following audit requirements are in addition to those set forth
in Section 5 (Audit, General) of the Channel Terms.

 

5.1

Relevant Records.  For the purposes of this IoT Disti PAX, “Relevant Records”
will include complete financial statements and all documents related to
acquisition, reproduction, installation, distribution, and other disposition of
each unit of Product Component (including manufacturing processes and systems
related to the management of Product, Authenticity Tags and Product Keys). If
Relevant Records are co-mingled with other non-relevant and Company Confidential
Information, Company may provide complete records that redact such non-relevant
Confidential Information.

 

5.2

Material Discrepancy Threshold.  For purposes of this IoT Disti PAX, the
Material Discrepancy threshold will be met if an audit reveals amounts owed by
Company to Microsoft in excess of US$25,000.00, or, if Microsoft (China) Company
Limited is the Microsoft contracting entity or a Microsoft Affiliate under the
Agreement, with respect to Company’s transactions with Microsoft

(China) Company Limited, CNY 200,438.00, for the applicable Products during the
audited period.  

6.  AUTHENTICITY TAG AND APM MANAGEMENT, DEFAULT CHARGE  

 

6.1

Authenticity Tag and APM Management.

 

(a)

Company assumes all risk of loss of, or damage to, Authenticity Tags or APM
during transit between suppliers and Company. Company must implement digital and
physical security measures, inventory management policies, and controls designed
to prevent the loss, theft, or other unauthorized use or distribution of all
Authenticity Tags and APM. Company must track and maintain accurate records of
the location of all Authenticity Tags and APM.  

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(b)

If Company becomes aware of any Unauthorized Disposition, or of any loss or
damage caused by a Force Majeure, Company must immediately notify Microsoft.
Company must give Microsoft reasonable assistance if Microsoft chooses to
investigate the Unauthorized Disposition. If Microsoft presents Company with
credible and reliable evidence that an Unauthorized Disposition of Authenticity
Tags or APM in Company’s control has occurred, Company must use reasonable
efforts to cooperate with Microsoft to carry out an investigation of the
suspected activities.  Notwithstanding any limitations set forth in Section 5
(Audit, General) of the Channel Terms, upon request from Microsoft, Company
agrees to provide Microsoft with access to records, IT systems and physical
sites directly related to Company’s management of Authenticity Tags and APM.  If
an investigation results in a referral to law enforcement agencies, or if
Microsoft initiates other legal action enforce its rights against responsible
parties, Company agrees to provide reasonable and timely cooperation and
information.

 

6.2

Default Charge.  Company must pay the Default Charge for each unit of Product
(including Authenticity Tags) distributed in violation of the terms of the
Agreement, including this IoT Disti PAX.  If Company cannot account for Product,
those missing Products will be deemed to have been distributed in violation of
the Agreement. The parties agree that the Unauthorized Disposition of Product
would result in damages to Microsoft that are impractical and difficult to
ascertain. The parties also agree that the Default Charge is a reasonable and
genuine estimate of the loss to Microsoft.  The Default Charge for each Product
is 130% of the royalty for the Product (excluding discounts and rebates), less
any royalty paid. Payment of the Default Charge and any late fees will
constitute Microsoft’ sole and exclusive compensatory remedy in case of
unauthorized distribution of Product software, recovery media or Authenticity
Tags, provided, that this does not limit Microsoft’ ability to seek equitable
relief in case of Unauthorized Disposition of same.

 

6.3

Damaged Materials.  For Authenticity Tags damaged irreparably during the
ordinary course of Company’s business, Company will:

 

(a)

Maintain a log of each damaged or destroyed COA. For each such COA, the log must
include the date damaged or destroyed, Product name, COA serial number and cause
of damage or destruction; and

 

(b)

Return each damaged COA to the AR and/or Microsoft Affiliate from which the COA
was acquired as outlined in the Returns and Destruction Process on the Partner
Portal.

 

6.4

Materials in Transit.  Company assumes all risk of loss or damage to
Authenticity Tags and APM in transit between AR and Company.

 

6.5

Replacement Units.  No additional royalty will accrue to Microsoft for Product
or Recovery Media that is shipped to replace a defective unit. Company must
distribute such replacement units directly to Qualified Customer at no charge,
except for the reasonable costs Company incurs for materials, shipping, and
handling.

7.  DEFENSE OF THIRD-PARTY CLAIMS.  The following defense obligations are
subject to the conditions and other terms in Section 7 (Defense of Third-Party
Claims, General) of the Channel Terms.  

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7.1

Microsoft Obligations

 

(a)

Subject to any Product-specific defense limitations or exclusions contained in
the Product Terms and any other conditions and limitations in the Agreement,
including subsection (b) below, Microsoft will, at its own expense, defend
Company based on a Claim, and pay a judgment or settlement in such Claim, to the
extent:  

 

(i)

arising from Microsoft's gross negligence, or intentional acts or omissions;  

 

(ii)

alleging that the Product, or Company’s use of Microsoft trademarks in
connection with promotion of Products, infringes a third party’s trademark;  

 

(iii)

alleging that the Product, alone, without combination or modification, either
(1) directly infringes an asserted patent claim or (2) embodies all the
essential inventive elements of an asserted patent claim; except for patents
that are alleged to be infringed by or essential to an implementation of a
Standard, provided that this exception does not apply to third party claims
where Company has merely distributed the Products in compliance with this
Agreement and in the form as it was provided to Company by Microsoft; or

 

(iv)

alleging that the Product infringes a third party’s copyright; or

 

(v)

alleging that the Product misappropriates a trade secret (as “misappropriates”
and “trade secret” are defined in the Uniform Trade Secrets Act or, if the
Agreement is governed by the laws of a jurisdiction outside the United States,
“misappropriates” will mean “intentionally unlawful use” and “trade secret” will
mean “undisclosed information” as specified in Article 39.2 of the Agreement on
Trade-Related Aspects of Intellectual Property Rights, including Trade in
Counterfeit Goods (TRIPS Agreement); Microsoft has no duty or liability to the
extent that the trade secret Claim is based on Company acquiring a trade secret
(1) through improper means, (2) under circumstances giving rise to an
independent duty by Company or a Company Affiliate to maintain secrecy or limit
the use of the trade secret, or (3) from a party (other than Microsoft or its
suppliers) that owed a duty to maintain the secrecy or limit the use of the
trade secret to the party asserting the trade secret claim).

Any such claim, as defined above, being a “Company Claim” or “Claim” where the
context requires.  

 

(b)

Limitations.  Notwithstanding the foregoing, Microsoft has no obligation or
liability (i) based on Company’s manufacture, use, sale, offer for sale,
importation or other disposition or promotion of Product or trademark in
violation of the Agreement, but only to the extent that the Claim results from
such violation; or (ii) with respect to Sample Code.

 

(c)

Other Claims

 

(i)

Regarding any claim (other than a Company Claim) related to a Product, Company
will promptly notify Microsoft in writing of such claim. Microsoft has no duty
to defend Company or pay damages arising out of such claim.  

 

(ii)

Company agrees that Microsoft has the right, in its sole discretion, to assume
at any time the defense of any such claim. If Microsoft assumes the defense of
any such claim:

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(A)

Microsoft will notify Company in writing of Microsoft’s election;  

 

(B)

Microsoft must have sole control over the defense and settlement of the claim;  

 

(C)

Company will provide Microsoft with reasonable assistance in the defense of the
claim;  

 

(D)

Microsoft will defend Company against that claim; and  

 

(E)

Microsoft will pay any adverse final judgment (or settlement that Microsoft
consents to) resulting from defending such claim.

 

(d)

Notices; Injunctions

 

(i)

Microsoft may provide Company with notice of a recommendation that Company stop
the manufacture, use, sale, offer for sale, importation or other disposition or
promotion of Products or trademark due to a claim (including a Company Claim).
Company will reimburse Microsoft and Microsoft Affiliate designated by Microsoft
for all damages, costs, and expenses (including reasonable attorneys’ fees) they
incurred because of Company’s activities contrary to such recommendation more
than 20 days after the date of Microsoft’s notice.

 

(ii)

If, in connection with a claim (including a Company Claim), a court enjoins
Company from distributing any Products in its inventory and within 60 days after
the injunction:

 

(A)

the injunction is not lifted;

 

(B)

Microsoft has not procured a license that enables Company to distribute the
enjoined Products; and

 

(C)

Microsoft has not modified the affected Products to make them non-infringing;
then such Products will not be available for distribution under the Agreement.
Company will return any corresponding Products in accordance with the
then-current Guide.

Company Obligations.  Company will, at its own expense, defend, indemnify, and
hold Microsoft and its Suppliers harmless based on a Claim, and pay a judgment
or settlement in such Claim, to the extent:    

 

(a)

arising from Company's default or breach of the Agreement, gross negligence, or
intentional acts or omissions;  

 

(b)

arising from Company’s marketing, advertising, promotion of any Product, whether
in the regular course of distribution or in connection with Company’s
participation in any Investment Program, including any misrepresentation or
unauthorized statements about Microsoft or any Product (except to the extent the
Claim arises from Company's actions taken at Microsoft’s request or the use of
materials provided by Microsoft without material alteration by Company);  

 

(c)

alleging property damage, death or personal injury attributable to, and
proximately caused by, Company’s modification of Products or combination of a
Product with another non-Microsoft product (except to the extent the Claim
arises from Company's actions taken at Microsoft’s request);  

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(d)

alleging that Company’s combination of a Product with any Non-Microsoft Product
infringes a third party’s patent, copyright, or trade secrets, to the extent
such infringement would not have arisen but for such combination (and except to
the extent the Claim arises from Company's actions taken at Microsoft’s
request);

 

(e)

alleging that Microsoft’s use of Company trademarks in connection with promotion
of Company or Company's products infringes a third party’s trademark;  

 

(f)

arising from Company’s continued use, sale, offer for sale, importation or other
disposition or promotion of a Product, use of Microsoft intellectual property,
or participation in any Investment Program, more than 30 days following notice
from Microsoft requesting or requiring that Company cease such activities due to
a Claim (any such, a “Microsoft Claim” or a “Claim” where the context requires).

8.

TERM AND TERMINATION. The following provisions are specific to the termination
of the Agreement and/or this IoT Disti PAX. Section 8.3(d)(i) below addresses
the impact of termination on other authorizations between Microsoft and Company
that may share common terms.  

 

8.1

Term and Expiration. The Agreement will be effective as of the Effective Date
stated on the Program Enrollment and shall remain in effect until the earlier of
when it naturally expires if the

Program Enrollment specifies a term period or when either party terminates it
according to the Agreement terms. Termination will be effective without further
action by the parties at the end of the applicable notice period.  

 

8.2

Termination Without Cause.  Either party may terminate the Agreement or a
Program Appendix at any time without cause and without the intervention of the
courts by giving the other party not less than notice as follows:

 

(a)

90 days’ notice for this IoT Disti PAX; and

 

(b)

90 days’ notice for the Agreement, unless a separate channel authorization under
the Agreement requires a longer notice period for terminating the Agreement, in
which case the longer notice period will control.  

 

8.3

Termination for Cause

 

(a)

If a party materially breaches the Agreement or a Program Appendix, the other
party can terminate the Agreement or the Program Appendix for cause. The
terminating party will give the breaching party not less than 30 days’ notice
and the opportunity to cure the breach if the cause for termination is curable.
If the breach is not curable, the breaching party has already been given the
opportunity to cure the same or a similar breach before, or the breach relates
to the disclosure of confidential information, misappropriation of intellectual
property, insolvency, bankruptcy or similar proceedings under law, the admission
in writing of an inability to pay debts or the assignment for the benefit of
creditors, then the non-breaching party may terminate the Agreement or this IoT
Disti PAX immediately upon notice.  In addition, if an event described in
Section 8.3(b)(iii) occurs, then Company’s distribution rights under the
Agreement will be suspended as of the date such event occurs.  

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(b)

Microsoft may also terminate the Agreement or this IoT Disti PAX for cause if
Company:

(i)submits “zero dollar” royalty reports (or, if Microsoft (China) Company
Limited is the Microsoft contracting entity or a Microsoft Affiliate under the
Agreement, with respect to Company’s transactions with Microsoft (China) Company
Limited), “zero CNY” royalty reports), for 3 consecutive calendar months;

(ii)materially fails to comply with any surviving payment obligation under a
prior Microsoft OEM Distribution Agreement for software Products for Customer
Systems;  

 

(iii)

becomes insolvent, enters bankruptcy or similar proceedings under applicable
law; admits in writing its inability to pay its debts; or makes or attempts to
make an assignment for the benefit of creditors; or

 

(iv)

does not meet any of the payment terms required under this IoT Disti PAX.

 

(d)

Effect of Termination

 

(i)

Termination of Other Documents.  Termination or expiration of the Agreement will
terminate this IoT Disti PAX, the Channel Terms, and the Core Terms solely as
incorporated in the Agreement; although the Channel Terms and Core Terms will
continue to survive if they are incorporated into a separate and surviving
agreement as between Microsoft and Company, but solely with respect to such
separate and surviving agreement(s).  

 

(ii)

Product Obligations.  Upon termination or expiration of the Agreement or this
IoT Disti PAX, all of Company’s license rights will immediately cease and
Company must immediately cease distribution of all Products.

 

(iii)

Return of Property.  Within 10 business days from expiration or termination of
the Agreement, Company will:

 

(A)

Return all Products in inventory to an AR per the Returns and Destruction Policy
on the Partner Portal;

 

(B)

Return any hardcopy CLA forms to Microsoft; and  

 

(C)

Return to Microsoft, or destroy at Microsoft’s direction, any Microsoft
Confidential Information or other Microsoft property in Company’s possession or
under Company’s control.   

 

(iv)

Payment Obligations. If Microsoft terminates the Agreement or this IoT Disti PAX
due to Company’s breach, Company must pay all outstanding amounts due as of the
termination effective date. In all other cases, Company must pay all outstanding
amounts due within 30 days of the effective date of termination or expiration.
Microsoft may withhold any amounts or credits due to Company until it receives
Company’s payment in full of any amounts due.

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(v)

To the extent permitted by Laws, neither party will be liable to the other for
damages resulting solely from terminating the Agreement or this IoT Disti PAX
according to its terms.

 

(e)

Termination Assistance.  Upon notice that the Agreement or this IoT Disti PAX is
expiring or to be terminated, each party must assist the other to wind-down
their respective obligations under the Agreement or this IoT Disti PAX in an
orderly manner.

 

(f)

Unauthorized Disposition of Products.  Upon the termination of the Agreement or
this IoT Disti PAX, or if Microsoft suspends Company’s distribution rights,
Microsoft may take any actions that may be advisable to prevent Unauthorized
Disposition of Products then in Company’s inventory and to ensure timely return
or destruction of such Products.

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CUSTOM TERMS ADDENDUM TO

MICROSOFT GLOBAL PARTNER AGREEMENT

(BSQUARE CORPORATION)

 

CHANGES OR ADDITIONS TO AGREEMENT I.

Windows 10 IoT Enterprise 2015—[***] and [***]Point of Service Devices

 

1.

Subject to the terms of the Agreement, Microsoft grants Company the right to
distribute the Microsoft Products specified herein to [***] solely for use in up
to [***] new, Point of Service Customer Systems (“POS Devices”) to be
distributed to [***] and its franchisees [***] as follows:  

 

(a)

Company may purchase one of the following Products at a Product Fee of [***] USD
per unit for the purposes of Par creating an Image for preinstallation onto new
POS Devices to be shipped to [***]:

 

Product Name

End Item Part Number

Windows Embedded POS Ready 7

S5C-00065

Windows® 10 IoT Enterprise 2015 LTSB for Retail or Thin Clients (ESD)

5JV-01146

Windows® 10 IoT Enterprise 2015 LTSB Value (ESD)

6EU-00121

Windows® 10 IoT Enterprise 2015 LTSB Value (ESD)

6EU-00125

Windows® 10 IoT Enterprise 2016 LTSB Value (ESD)

6EU-00030

Windows® 10 IoT Enterprise 2016 LTSB Value (ESD)

6EU-00035

Windows® 10 IoT Enterprise SAC Value (ESD)

6F6-00031

Windows® 10 IoT Enterprise SAC Value (ESD)

6F6-00037

 

(b)

[***] may choose to distribute with each new, [***] POS Device, one of the
following

Field Upgrade Products (“Field Upgrade License”) for a Product Fee of [***] USD
per unit:

 

Product Name

End Item Part Number

Windows® 10 IoT Enterprise 2015 LTSB Upgrade Value (ESD)

6EU-00128

Windows® 10 IoT Enterprise 2015 LTSB Upgrade Value (ESD)

6EU-00131

Windows® 10 IoT Enterprise 2016 LTSB Upgrade Value (ESD)

6EU-00041

Windows® 10 IoT Enterprise 2016 LTSB Upgrade Value (ESD)

6EU-00047

Windows® 10 IoT Enterprise SAC Upgrade Value (ESD)

6F6-00043

Windows® 10 IoT Enterprise SAC Upgrade Value (ESD)

6F6-00049

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(c)

Company will pay the Product Fee set forth in paragraph 1(a) and 1(b)
above.  For each unit of Product purchased in 1(a) and 1(b) above, Company must
include the following billing code in its sales out report:  127662.

 

2.

For installation on existing, in-field POS Devices currently deployed by [***],
Company may purchase the Field Upgrade Licenses listed in Section I (1)(b) of
this Custom Terms Addendum, at a Product Fee of [***] USD per unit.  For each
Field Upgrade License Product purchased for the purposes described in this
Section I (2) of the Custom Terms Addendum, Company must include the following
billing code in its sales out report: 127440.

 

3.

Company will inform [***] to modify the License Terms for the Products to
incorporate limitations specified above. Company will require Par to have
hardware that can support the Field Upgrade license at time of purchase.  

 

4.

The rights set forth in this Section I of the Custom Terms Addendum are
effective until the earlier of (i) February 29, 2020, or (ii) termination of the
Agreement.

 

5.

Company acknowledges and agrees that this is a one-time offer limited in
duration and that Microsoft is not obligated at any time in the future to make a
similar offer available to Company.

II. Windows 10 IoT Enterprise 2016—[***]

 

1.

For the period beginning July 1, 2017 and ending on June 30, 2020, Company may
distribute to [***] only, the Products listed below at a Product Fee that is
[***] discount from Customer's price tier, provided that [***] meets the
milestone requirements specified in Section III (2) below.

 

End Item Number

Legal name

6EU-00029

Windows® 10 IoT Enterprise 2016 LTSB High End (ESD)

6EU-00034

Windows® 10 IoT Enterprise 2016 LTSB High End (ESD)

6EU-00046

Windows® 10 IoT Enterprise 2016 LTSB Upgrade High End (ESD)

6EU-00040

Windows® 10 IoT Enterprise 2016 LTSB Upgrade High End (ESD)

6EU-00049

Windows® 10 IoT Enterprise 2016 LTSB High End (ESD)

6F6-00030

Windows® 10 IoT Enterprise SAC High End (ESD)

6F6-00036

Windows® 10 IoT Enterprise SAC High End (ESD)

6F6-00042

Windows® 10 IoT Enterprise SAC Upgrade High End (ESD)

6F6-00048

Windows® 10 IoT Enterprise SAC Upgrade High End (ESD)

6F6-00051

Windows® 10 IoT Enterprise SAC Upgrade High End (ESD)

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2.

On an annual basis, Company must verify continued eligibility for the Product
discounts listed in Section III (1) of this Custom Terms Addendum, based on
[***] achievement of the following milestones.  Microsoft will assist with this
assessment by confirming to Company upon request whether [***] remains eligible
for the discount.  

 

(a)

Year 1 Milestone (July 1, 2017 – June 30, 2018). [***] must:

 

(i)

move all devices currently on Windows 7 Embedded Systems to Windows 10 IoT
Enterprise;

 

(ii)

provide an Azure security and surveillance solution beta operational with 10+
End User Network Video Recorders (NVRs) attached;

 

(iii)

provide an Azure security and surveillance solution released with general
availability and active marketing efforts;  

 

(iv)

provide an Azure security and surveillance solution generally available and
marketed across US and Canada;

 

(v)

provide at least one Windows 10 IoT device attached to an Azure solution
released with general availability (Note: Archive storage to Azure cloud would
count if attached to Windows 10 IoT device);  

 

(vi)

provide quarterly reporting to Microsoft Account Manager of Azure
consumption/usage details by scenario; and

 

(vii)

all above milestones must be met by June 30, 2018 for [***] to receive the
discount in Year 2.  Non-compliance to above milestones will not result in a
charge back to Company.

 

(b)

Year 2 Milestone (July 1, 2018 – June 30, 2019) [***] must:

 

(i)

aggregate Azure non-internal use consumption of [***];

 

(ii)

create an Azure and Windows I0 IoT Solution case study, along with Microsoft,
published no later than September 30, 2018;  

 

(iii)

provide quarterly reporting to Microsoft Account Manager of Azure
consumption/usage details by scenario; and

 

(iv)

all above milestones must be met by June 30, 2019 for [***] to receive the
discount in Year 3.  Non-compliance to above milestones will not result in a
charge back to Company.

 

(c)

Year 3 Milestone (July 1, 2019 – June 30, 2020) Avigilon must:

 

(i)

provide quarterly reporting of Azure consumption/usage details by scenario.

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3.

For each unit of Product listed in Section III (1) of this Custom Terms
Addendum, Company must include the following billing code in its sales out
report during the Program Period to earn the discount: 127219.

 

4.

Company will request from Microsoft, by May 31 of each year, the status of [***]
performance with respect to the yearly milestone requirements specified in
Section III (2) above.  

Microsoft will respond to Company within 30 days of each request.  [***]
performance

during each annual period will determine eligibility for the subsequent
period(s). If [***] does not meet each milestone requirement listed in Section
III (2), or Microsoft does not confirm [***] compliance, Company will stop
reporting Product under the above billing code. In this event, Company will only
receive the discount for units purchased after all requirements are met by
[***]. Microsoft will notify Company when [***] has met requirements

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