Document:

Exhibit 10.13

 

AMENDED AND RESTATED

 

CONSONUS TECHNOLOGIES, INC.

 

2007 INCENTIVE COMPENSATION PLAN

 

(as amended and Restated
as of November 30th, 2007)

 

 

AMENDED AND RESTATED

 

CONSONUS TECHNOLOGIES, INC.

 

2007 INCENTIVE COMPENSATION PLAN

 

	
  1.

  	
   

  	
  Purpose

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Administration

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Shares Subject to Plan

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Eligibility; Per-Person Award Limitations

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Specific Terms of Awards

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Certain Provisions Applicable to Awards

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Code Section 162(m) Provisions

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Change in Control

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  General Provisions

  	
   

  	
  18

  

 

i

 

AMENDED AND
RESTATED

 

CONSONUS
TECHNOLOGIES, INC.

 

2007 INCENTIVE
COMPENSATION PLAN

 

1.             Purpose. The purpose of this CONSONUS TECHNOLOGIES, INC.
2007 INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist CONSONUS
TECHNOLOGIES, INC., a Delaware corporation (the “Company”) and its Related
Entities (as hereinafter defined) in attracting, motivating, retaining and
rewarding high-quality executives and other employees, officers, directors,
consultants and other persons who provide services to the Company or its
Related Entities by enabling such persons to acquire or increase a proprietary
interest in the Company in order to strengthen the mutuality of interests
between such persons and the Company’s shareholders, and providing such persons
with performance incentives to expend their maximum efforts in the creation of
shareholder value.

 

2.             Definitions. For purposes of the Plan, the following
terms shall be defined as set forth below, in addition to such terms defined in
Section 1 hereof.

 

(a)           “Award”
means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award, Share granted as a bonus or in lieu of another Award, Dividend
Equivalent, Other Stock-Based Award or Performance Award, together with any
other right or interest, granted to a Participant under the Plan.

 

(b)           “Award
Agreement” means any written agreement, contract or other instrument
or document evidencing any Award granted by the Committee hereunder.

 

(c)           “Beneficiary”
means the person, persons, trust or trusts that have been designated by a
Participant in his or her most recent written beneficiary designation filed
with the Committee to receive the benefits specified under the Plan upon such
Participant’s death or to which Awards or other rights are transferred if and
to the extent permitted under Section 10(b) hereof. If, upon a
Participant’s death, there is no designated Beneficiary or surviving designated
Beneficiary, then the term Beneficiary means the person, persons, trust or
trusts entitled by will or the laws of descent and distribution to receive such
benefits.

 

(d)           “Beneficial
Owner” shall have the meaning ascribed to such term in
Rule 13d-3 under the Exchange Act and any successor to such Rule.

 

(e)           “Board”
means the Company’s Board of Directors.

 

(f)            “Cause” shall, with respect to any
Participant, have the meaning specified in the Award Agreement. In the absence
of any definition in the Award Agreement, “Cause” shall have the equivalent
meaning or the same meaning as “cause” or “for cause” set forth in any
employment, consulting, or other agreement for the performance of services
between the Participant

 

 

and the Company or a
Related Entity or, in the absence of any such agreement or any such definition
in such agreement, such term shall mean (i) the failure by the Participant
to perform, in a reasonable manner, his or her duties as assigned by the
Company or a Related Entity, (ii) any violation or breach by the
Participant of his or her employment, consulting or other similar agreement
with the Company or a Related Entity, if any, (iii) any violation or
breach by the Participant of any non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a Related
Entity, (iv) any act by the Participant of dishonesty or bad faith with
respect to the Company or a Related Entity, (v) use of alcohol, drugs or
other similar substances in a manner that adversely affects the Participant’s
work performance, or (vi) the commission by the Participant of any act,
misdemeanor, or crime reflecting unfavorably upon the Participant or the
Company or any Related Entity. The good faith determination by the Committee of
whether the Participant’s Continuous Service was terminated by the Company for
“Cause” shall be final and binding for all purposes hereunder.

 

(g)           “Change
in Control” means a Change in Control as defined in
Section 9(b) of the Plan.

 

(h)           “Code”
means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and regulations
thereto.

 

(i)            “Committee”
means a committee designated by the Board to administer the Plan; provided,
however, that if the Board fails to designate a committee or if there are no
longer any members on the committee so designated by the Board, then the Board
shall serve as the Committee. In the event that the Company becomes a Publicly
Held Corporation (as hereinafter defined), then the Committee shall consist of
at least two directors, and each member of the Committee shall be (i) a
“non-employee director” within the meaning of 
Rule 16b-3 (or any successor rule) under the Exchange Act, unless
administration of the Plan by “non-employee directors” is not then required in
order for exemptions under Rule 16b-3 to apply to transactions under the
Plan, (ii) an “outside director” within the meaning of Section 162(m)
of the Code, and (iii) ”Independent.”

 

(j)            “Consultant”
means any person (other than an Employee or a Director, solely with respect to
rendering services in such person’s capacity as a director) who is engaged by
the Company or any Related Entity to render consulting or advisory services to
the Company or such Related Entity.

 

(k)           “Continuous
Service” means the uninterrupted provision of services to the
Company or any Related Entity in any capacity of Employee, Director, Consultant
or other service provider. Continuous Service shall not be considered to be interrupted
in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entities, or any successor entities, in any
capacity of Employee, Director, Consultant or other service provider, or
(iii) any change in status as long as the individual remains in the
service of the Company or a Related Entity in any capacity of Employee,
Director, Consultant or other service provider (except as otherwise provided in
the Award Agreement). An approved leave of absence shall include sick leave,
military leave, or any other authorized personal leave.

 

2

 

(l)            “Deferred
Stock” means a right to receive Shares, including Restricted
Stock, cash measured based upon the value of Shares or a combination thereof,
at the end of a specified deferral period.

 

(m)          “Deferred
Stock Award” means an Award of Deferred Stock granted to a
Participant under Section 6(e) hereof.

 

(n)           “Director”
means a member of the Board or the board of directors of any Related Entity.

 

(o)           “Disability”
means a permanent and total disability (within the meaning of
Section 22(e) of the Code), as determined by a medical doctor satisfactory
to the Committee.

 

(p)           “Dividend
Equivalent” means a right, granted to a Participant under Section 6(g)
hereof, to receive cash, Shares, other Awards or other property equal in value
to dividends paid with respect to a specified number of Shares, or other
periodic payments.

 

(q)           “Effective
Date” means the effective date of the Plan, which shall be
January 2, 2007.

 

(r)            “Eligible
Person” means each officer, Director, Employee, Consultant and
other person who provides services to the Company or any Related Entity. The
foregoing notwithstanding, only employees of the Company, or any parent
corporation or subsidiary corporation of the Company (as those terms are
defined in Sections 424(e) and (f) of the Code, respectively), shall be
Eligible Persons for purposes of receiving any Incentive Stock Options. An
Employee on leave of absence may be considered as still in the employ of the
Company or a Related Entity for purposes of eligibility for participation in
the Plan.

 

(s)           “Employee”
means any person, including an officer or Director, who is an employee of the
Company or any Related Entity. The payment of a director’s fee by the Company
or a Related Entity shall not be sufficient to constitute “employment” by the
Company.

 

(t)            “Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time to time, including rules thereunder and successor provisions and rules
thereto.

 

(u)           “Fair
Market Value” means the fair market value of Shares, Awards or
other property as determined by the Committee, or under procedures established
by the Committee. Unless otherwise determined by the Committee, the Fair Market
Value of a Share as of any given date after which the Company is a Publicly
Held Corporation shall be the closing sale price per Share reported on a
consolidated basis for stock listed on the principal stock exchange or market
on which Shares are traded on the date immediately preceding the date as of
which such value is being determined or, if there is no sale on that date, then
on the last previous day on which a sale was reported.

 

3

 

(v)           “Good
Reason” shall, with respect to any Participant, have the meaning
specified in the Award Agreement. In the absence of any definition in the Award
Agreement, “Good Reason” shall have the equivalent meaning or the same meaning
as “good reason” or “for good reason” set forth in any employment, consulting
or other agreement for the performance of services between the Participant and
the Company or a Related Entity or, in the absence of any such agreement or any
such definition in such agreement, such term shall mean (i) the assignment
to the Participant of any duties inconsistent in any material respect with the
Participant’s duties or responsibilities as assigned by the Company or a
Related Entity, or any other action by the Company or a Related Entity which
results in a material diminution in such duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company or a Related Entity promptly
after receipt of notice thereof given by the Participant; (ii) any
material failure by the Company or a Related Entity to comply with its
obligations to the Participant as agreed upon, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company or a Related Entity promptly after receipt of notice
thereof given by the Participant; or (iii) the Company’s or Related
Entity’s requiring the Participant to be based at any office or location
outside of fifty miles from the location of employment or service as of the
date of Award, except for travel reasonably required in the performance of the
Participant’s responsibilities.

 

(w)          “Incentive
Stock Option” means any Option intended to be designated as an
incentive stock option within the meaning of Section 422 of the Code or
any successor provision thereto.

 

(x)            “Independent,”
when referring to either the Board or members of the Committee, shall have the
same meaning as used in the rules of the national securities exchange on which
any securities of the Company are listed for trading, and if not listed for
trading, by the rules of the Nasdaq Stock Market.

 

(y)           “Incumbent
Board” means the Incumbent Board as defined in
Section 9(b)(ii) of the Plan.

 

(z)            “Option”
means a right granted to a Participant under Section 6(b) hereof, to
purchase Shares or other Awards at a specified price during specified time
periods.

 

(aa)         “Optionee”
means a person to whom an Option is granted under this Plan or any person who
succeeds to the rights of such person under this Plan.

 

(bb)         “Other
Stock-Based Awards” means Awards granted to a Participant under
Section 6(i) hereof.

 

(cc)         “Participant”
means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible Person.

 

(dd)         “Performance
Award” shall mean any Award of Performance Shares or Performance
Units granted pursuant to Section 6(h).

 

4

 

(ee)         “Performance
Period” means that period established by the Committee at the
time any Performance Award is granted or at any time thereafter during which
any performance goals specified by the Committee with respect to such Award are
to be measured.

 

(ff)           “Performance
Share” means any grant pursuant to Section 6(h) of a unit
valued by reference to a designated number of Shares, which value may be paid
to the Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination thereof,
upon achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.

 

(gg)         “Performance
Unit” means any grant pursuant to Section 6(h) of a unit
valued by reference to a designated amount of property (including cash) other
than Shares, which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including cash, Shares, other
property, or any combination thereof, upon achievement of such performance
goals during the Performance Period as the Committee shall establish at the
time of such grant or thereafter.

 

(hh)         “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall
include a “group” as defined in Section 13(d) thereof.

 

(ii)           “Publicly
Held Corporation” shall mean a publicly held corporation as that
term is used under Section 162(m)(2) of the Code.

 

(jj)           “Related
Entity” means any Subsidiary, and any business, corporation,
partnership, limited liability company or other entity designated by the Board,
in which the Company  or a Subsidiary
holds a  substantial ownership interest,
directly or indirectly.

 

(kk)         “Restricted
Stock” means any Share issued with the restriction that the
holder may not sell, transfer, pledge or assign such Share and with such risks
of forfeiture and other restrictions as the Committee, in its sole discretion,
may impose (including any restriction on the right to vote such Share and the
right to receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.

 

(ll)           “Restricted
Stock Award” means an Award granted to a Participant under
Section 6(d) hereof.

 

(mm)       “Rule 16b-3”
means Rule 16b-3, as from time to time in effect and applicable to the
Plan and Participants, promulgated by the Securities and Exchange Commission
under Section 16 of the Exchange Act.

 

(nn)         “Shares”
means the shares of common stock of the Company, par value $0.000001 per share,
and such other securities as may be substituted (or resubstituted) for Shares
pursuant to Section 10(c) hereof.

 

5

 

(oo)         “Stock
Appreciation Right” means a right granted to a Participant under
Section 6(c) hereof.

 

(pp)         “Subsidiary”
means any corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined voting power
of the then outstanding securities or interests of such corporation or other
entity entitled to vote generally in the election of directors or in which the
Company has the right to receive 50% or more of the distribution of profits or
50% or more of the assets on liquidation or dissolution.

 

(qq)         “Substitute
Awards” means Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, Awards previously granted,
or the right or obligation to make future Awards, by a company acquired by the
Company or any Related Entity or with which the Company or any Related Entity
combines.

 

3.             Administration.

 

(a)           Authority
of the Committee. The Plan shall be administered by the
Committee, provided, however, that except as otherwise expressly provided in
this Plan, the Board may exercise any power or authority granted to the
Committee under this Plan and in that case, references herein shall be deemed
to include references to the Board. The Committee shall have full and final
authority, subject to and consistent with the provisions of the Plan, to select
Eligible Persons to become Participants, grant Awards, determine the type,
number and other terms and conditions of, and all other matters relating to,
Awards, prescribe Award Agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award Agreements and correct defects,
supply omissions or reconcile inconsistencies therein, and to make all other
decisions and determinations as the Committee may deem necessary or advisable
for the administration of the Plan. In exercising any discretion granted to the
Committee under the Plan or pursuant to any Award, the Committee shall not be
required to follow past practices, act in a manner consistent with past
practices, or treat any Eligible Person or Participant in a manner consistent
with the treatment of other Eligible Persons or Participants.

 

(b)           Manner
of Exercise of Committee Authority. In the event that the
Company becomes a Publicly Held Corporation, the Committee, and not the Board,
shall exercise sole and exclusive discretion on any matter relating to a
Participant then subject to Section 16 of the Exchange Act with respect to
the Company to the extent necessary in order that transactions by such
Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any
action of the Committee shall be final, conclusive and binding on all persons,
including the Company, its Related Entities, Participants, Beneficiaries,
transferees under Section 10(b) hereof or other persons claiming rights
from or through a Participant, and shareholders. The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any Related
Entity, or committees thereof, the authority, subject to such terms as the
Committee shall determine, to perform such functions, including administrative
functions as the

 

6

 

Committee may determine
to the extent that such delegation will not result in the loss of an exemption
under Rule 16b-3(d)(1) for Awards granted to Participants subject to
Section 16 of the Exchange Act in respect of the Company and will not
cause Awards intended to qualify as “performance-based compensation” under Code
Section 162(m) to fail to so qualify. The Committee may appoint agents to
assist it in administering the Plan.

 

(c)           Limitation
of Liability. The Committee and the Board, and each member
thereof, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or Employee, the
Company’s independent auditors, Consultants or any other agents assisting in
the administration of the Plan. Members of the Committee and the Board, and any
officer or Employee acting at the direction or on behalf of the Committee or
the Board, shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company with
respect to any such action or determination.

 

4.             Shares Subject to Plan.

 

(a)           Limitation
on Overall Number of Shares Available for Delivery Under Plan.
Subject to adjustment as provided in Section 10(c) hereof, the total
number of Shares reserved and available for delivery under the Plan shall be
700,000. Any Shares delivered under the Plan may consist, in whole or in part,
of authorized and unissued shares or treasury shares.

 

(b)           Automatic
Share Reserve Increase. The number of Shares available for
issuance under the Plan shall be increased on the first day of the calendar year of the
Company (“Fiscal year”) following any Fiscal Year in which the number of
Shares available for issuance under the Plan falls below 150,000 Shares, subject to the
adjustment provisions of Section 10(c) herein, and shall be increased in an
amount necessary to have 150,000 Shares, subject to the adjustment provisions
of Section 10(c) herein, available for issuance in such Fiscal Year, or
(ii) such number of Shares determined by the Board.

 

(c)           Application
of Limitation to Grants of Award. No Award may be granted if the
number of Shares to be delivered in connection with such an Award or, in the
case of an Award relating to Shares but settled only in cash (such as cash-only
Stock Appreciation Rights), the number of Shares to which such Award relates,
exceeds the number of Shares remaining available for delivery under the Plan,
minus the number of Shares deliverable in settlement of or relating to then
outstanding Awards. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the
case of tandem or substitute awards) and make adjustments if the number of
Shares actually delivered differs from the number of Shares previously counted
in connection with an Award.

 

7

 

(d)           Availability
of Shares Not Delivered under Awards and Adjustments to Limits.

 

(i)            If any Shares subject
to an Award are forfeited, expire or otherwise terminate without issuance of
such Shares, or any Award is settled for cash or otherwise does not result in
the issuance of all or a portion of the Shares subject to such Award, the
Shares shall, to the extent of such forfeiture, expiration, termination, cash
settlement or non-issuance, again be available for Awards under the Plan,
subject to Section 4(c)(v) below.

 

(ii)           In the event that any
Option or other Award granted hereunder is exercised through the tendering of
Shares (either actually or by attestation) or by the withholding of Shares by the
Company, or withholding tax liabilities arising from such option or other award
are satisfied by the tendering of Shares (either actually or by attestation) or
by the withholding of Shares by the Company, then only the number of Shares
issued net of the Shares tendered or withheld shall be counted for purposes of
determining the maximum number of Shares available for grant under the Plan.

 

(iii)          Substitute Awards shall
not reduce the Shares authorized for grant under the Plan or authorized for
grant to a Participant in any period. Additionally, in the event that a company
acquired by the Company or any Related Entity or with which the Company or any
Related Entity combines has shares available under a pre-existing plan approved
by shareholders and not adopted in contemplation of such acquisition or
combination, the shares available for delivery pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or
combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for delivery under the Plan.

 

(iv)          Any Shares that again
become available for delivery pursuant to this Section 4(c) shall be added
back as one (1) Share.

 

(v)           Notwithstanding
anything in this Section 4(c) to the contrary but subject to adjustment as
provided in Section 10(c) hereof, the maximum aggregate number of Shares
that may be issued under the Plan as a result of the exercise of the Incentive
Stock Options shall be 550,000 shares.

 

5.             Eligibility; Per-Person Award Limitations. Awards may be
granted under the Plan only to Eligible Persons. Subject to adjustment as
provided in Section 10(c), in any fiscal year of the Company during any
part of which the Plan is in effect, no Participant may be granted
(i) Options or Stock Appreciation Rights with respect to more than 220,000
Shares or (ii) Restricted Stock, Deferred Stock, Performance Shares and/or
Other Stock-Based Awards with respect to more than 220,000 Shares. In addition,
the maximum dollar value payable to any one Participant with respect to Performance
Units is (x) $1,000,000 with respect to any 12 month Performance Period
(pro-rated for any Performance Period that is less than 12 months based upon
the ratio of the number of days in

 

8

 

the Performance Period as
compared to 365), and (y) with respect to any Performance Period that is
more than 12 months, $2,000,000.

 

6.             Specific Terms of Awards.

 

(a)           General.
Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to
Section 10(e)), such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine, including
terms requiring forfeiture of Awards in the event of termination of the
Participant’s Continuous Service and terms permitting a Participant to make
elections relating to his or her Award. The Committee shall retain full power
and discretion to accelerate, waive or modify, at any time, any term or
condition of an Award that is not mandatory under the Plan. Except in cases in
which the Committee is authorized to require other forms of consideration under
the Plan, or to the extent other forms of consideration must be paid to satisfy
the requirements of Delaware law, no consideration other than services may be
required for the grant (as opposed to the exercise) of any Award.

 

(b)           Options.
The Committee is authorized to grant Options to any Eligible Person on the following
terms and conditions:

 

(i)            Exercise
Price. Other than in connection with Substitute Awards, the
exercise price per Share purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall not, in the case of Incentive
Stock Options, be less than 100% of the Fair Market Value of a Share on the
date of grant of the Option and shall not, in any event, be less than the par
value of a Share on the date of grant of the Option. If an Employee owns or is
deemed to own (by reason of the attribution rules applicable under
Section 424(d) of the Code) more than 10% of the combined voting power of
all classes of stock of the Company (or any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e)
and (f) of the Code, respectively) and an Incentive Stock Option is granted to
such employee, the exercise price of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no less than 110% of the Fair
Market Value a Share on the date such Incentive Stock Option is granted.

 

(ii)           Time
and Method of Exercise. The Committee shall determine the time
or times at which or the circumstances under which an Option may be exercised
in whole or in part (including based on achievement of performance goals and/or
future service requirements), the time or times at which Options shall cease to
be or become exercisable following termination of Continuous Service or upon
other conditions, the methods by which the exercise price may be paid or deemed
to be paid (including in the discretion of the Committee a cashless exercise
procedure), the form of such payment, including, without limitation, cash,
Shares (including without limitation the withholding of Shares otherwise
deliverable pursuant to the Award), other Awards or awards granted under other
plans of the Company or a Related Entity, or other property (including notes or
other contractual obligations of Participants to make payment on a deferred
basis provided that such deferred payments are not in violation of the
Sarbanes-Oxley Act of 2002, or any rule or regulation

 

9

 

adopted thereunder or any
other applicable law), and the methods by or forms in which Shares will be
delivered or deemed to be delivered to Participants.

 

(iii)          Incentive
Stock Options. The terms of any Incentive Stock Option granted
under the Plan shall comply in all respects with the provisions of
Section 422 of the Code. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options
(including any Stock Appreciation Right issued in tandem therewith) shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be exercised, so as to disqualify either the Plan or any
Incentive Stock Option under Section 422 of the Code, unless the
Participant has first requested, or consents to, the change that will result in
such disqualification. Thus, if and to the extent required to comply with
Section 422 of the Code, Options granted as Incentive Stock Options shall
be subject to the following special terms and conditions:

 

(A)          The Option shall not be
exercisable more than ten years after the date such Incentive Stock Option is
granted; provided, however, that if a Participant owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company (or any
parent corporation or subsidiary corporation of the Company, as those terms are
defined in Sections 424(e) and (f) of the Code, respectively) and the
Incentive Stock Option is granted to such Participant, the term of the
Incentive Stock Option shall be (to the extent required by the Code at the time
of the grant) for no more than five years from the date of grant; and

 

(B)           The aggregate Fair
Market Value (determined as of the date the Incentive Stock Option is granted)
of the Shares with respect to which Incentive Stock Options granted under the
Plan and all other option plans of the Company (and any parent corporation or
subsidiary corporation of the Company, as those terms are defined in
Sections 424(e) and (f) of the Code, respectively) that become exercisable
for the first time by the Participant during any calendar year shall not (to
the extent required by the Code at the time of the grant) exceed $100,000.

 

(c)           Stock
Appreciation Rights. The Committee may grant Stock Appreciation
Rights to any Eligible Person in conjunction with all or part of any Option
granted under the Plan or at any subsequent time during the term of such Option
(a “Tandem Stock Appreciation Right”), or without regard to any Option (a
“Freestanding Stock Appreciation Right”), in each case upon such terms and
conditions as the Committee may establish in its sole discretion, not
inconsistent with the provisions of the Plan, including the following:

 

(i)            Right
to Payment. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one Share on the date of
exercise over (B) the grant price of the Stock Appreciation Right as
determined by the Committee. The grant price of a Stock Appreciation Right  shall not be less than the Fair Market Value
of a Share on the date of grant, in the case of a Freestanding Stock
Appreciation Right, or less than the associated Option exercise price, in the
case of a Tandem Stock Appreciation Right.

 

10

 

(ii)           Other
Terms. The Committee shall determine at the date of grant or
thereafter, the time or times at which and the circumstances under which a
Stock Appreciation Right may be exercised in whole or in part (including based
on achievement of performance goals and/or future service requirements), the
time or times at which Stock Appreciation Rights shall cease to be or become
exercisable following termination of Continuous Service or upon other
conditions, the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Shares will be delivered or
deemed to be delivered to Participants, whether or not a Stock Appreciation
Right shall be in tandem or in combination with any other Award, and any other
terms and conditions of any Stock Appreciation Right.

 

(iii)          Tandem
Stock Appreciation Rights. Any Stock Appreciation Right that is
designated by the Committee as a Tandem Stock Appreciation Right may be granted
at the same time as the related Option is granted or, for Options that are not
Incentive Stock Options, at any time thereafter before exercise or expiration
of such Option. Any Tandem Stock Appreciation Right related to an Option may be
exercised only when the related Option would be exercisable and the Fair Market
Value of the Shares subject to the related Option exceeds the exercise price at
which Shares can be acquired pursuant to the Option. In addition, if a Tandem
Stock Appreciation Right exists with respect to less than the full number of
Shares covered by a related Option, then an exercise or termination of such
Option shall not reduce the number of Shares to which the Tandem Stock
Appreciation Right applies until the number of Shares then exercisable under
such Option equals the number of Shares to which the Tandem Stock Appreciation
Right applies. Any Option related to a Tandem Stock Appreciation Right shall no
longer be exercisable to the extent the Tandem Stock Appreciation Right has
been exercised, and any Tandem Stock Appreciation Right shall be forfeited to
the extent the related Option has been exercised.

 

(d)           Restricted
Stock Awards. The Committee is authorized to grant Restricted
Stock Awards to any Eligible Person on the following terms and conditions:

 

(i)            Grant
and Restrictions. Restricted Stock Awards shall be subject to
such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose, or as otherwise provided in
this Plan, covering a period of time specified by the Committee (the
“Restriction Period”). The terms of any Restricted Stock Award granted under
the Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan. The restrictions
may lapse separately or in combination at such times, under such circumstances
(including based on achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Committee may
determine at the date of grant or thereafter. Except to the extent restricted
under the terms of the Plan and any Award Agreement relating to a Restricted
Stock Award, a Participant granted Restricted Stock shall have all of the
rights of a shareholder, including the right to vote the Restricted Stock and
the right to receive dividends thereon (subject to any mandatory reinvestment
or other requirement imposed by the Committee). During the Restriction Period,
subject  to Section 10(b) below, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined
or otherwise encumbered by the Participant.

 

11

 

(ii)           Forfeiture.
Except as otherwise determined by the Committee, upon termination of a
Participant’s Continuous Service during the applicable Restriction Period, the
Participant’s Restricted Stock that is at that time subject to a risk of
forfeiture that has not lapsed or otherwise been satisfied shall be forfeited
and reacquired by the Company; provided that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any individual
case, that forfeiture conditions relating to Restricted Stock Awards shall be
waived in whole or in part in the event of terminations resulting from specified
causes.

 

(iii)          Certificates
for Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant,
the Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.

 

(iv)          Dividends
and Splits. As a condition to the grant of a Restricted Stock
Award, the Committee may require or permit a Participant to elect that any cash
dividends paid on a Share of Restricted Stock be automatically reinvested in
additional Shares of Restricted Stock or applied to the purchase of additional
Awards under the Plan. Unless otherwise determined by the Committee, Shares
distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Shares or other property have been distributed.

 

(e)           Deferred
Stock Award. The Committee is authorized to grant Deferred Stock
Awards to any Eligible Person on the following terms and conditions:

 

(i)            Award
and Restrictions. Satisfaction of a Deferred Stock Award shall
occur upon expiration of the deferral period specified for such Deferred Stock
Award by the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, a Deferred Stock Award shall be subject to such
restrictions (which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Committee may determine. A
Deferred Stock Award may be satisfied by delivery of Shares, cash equal to the
Fair Market Value of the specified number of Shares covered by the Deferred
Stock, or a combination thereof, as determined by the Committee at the date of
grant or thereafter. Prior to satisfaction of a Deferred Stock Award, a
Deferred Stock Award carries no voting or dividend or other rights associated
with Share ownership.

 

(ii)           Forfeiture.
Except as otherwise determined by the Committee, upon termination of a
Participant’s Continuous Service during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the Award
Agreement evidencing the Deferred Stock Award), the Participant’s Deferred
Stock Award that is at that time subject to a risk

 

12

 

of forfeiture that
has not lapsed or otherwise been satisfied shall be forfeited; provided that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that forfeiture conditions relating to a
Deferred Stock Award shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of any Deferred Stock Award.

 

(iii)          Dividend
Equivalents. Unless otherwise determined by the Committee at
date of grant, any Dividend Equivalents that are granted with respect to any
Deferred Stock Award shall be either (A) paid with respect to such
Deferred Stock Award at the dividend payment date in cash or in Shares of
unrestricted stock having a Fair Market Value equal to the amount of such
dividends, or (B) deferred with respect to such Deferred Stock Award and
the amount or value thereof automatically deemed reinvested in additional
Deferred Stock, other Awards or other investment vehicles, as the Committee
shall determine or permit the Participant to elect.

 

(f)            Bonus
Stock and Awards in Lieu of Obligations. The Committee is
authorized to grant Shares to any Eligible Persons as a bonus, or to grant
Shares or other Awards in lieu of obligations to pay cash or deliver other
property under the Plan or under other plans or compensatory arrangements,
provided that, in the case of Eligible Persons subject to Section 16 of
the Exchange Act, the amount of such grants remains within the discretion of
the Committee to the extent necessary to ensure that acquisitions of Shares or
other Awards are exempt from liability under Section 16(b) of the Exchange
Act. Shares or Awards granted hereunder shall be subject to such other terms as
shall be determined by the Committee.

 

(g)           Dividend
Equivalents. The Committee is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to receive
cash, Shares, other Awards, or other property equal in value to the dividends
paid with respect to a specified number of Shares, or other periodic payments.
Dividend Equivalents may be Awarded on a free-standing basis or in connection
with another Award. The Committee may provide that Dividend Equivalents shall
be paid or distributed when accrued or shall be deemed to have been reinvested
in additional Shares, Awards, or other investment vehicles, and subject to such
restrictions on transferability and risks of forfeiture, as the Committee may
specify.

 

(h)           Performance
Awards. The Committee is authorized to grant Performance Awards
to any Eligible Person payable in cash, Shares, or other Awards, on terms and conditions
established by the Committee, subject to the provisions of Section 8 if
and to the extent that the Committee shall, in its sole discretion, determine
that an Award shall be subject to those provisions. The performance criteria to
be achieved during any Performance Period and the length of the Performance
Period shall be determined by the Committee upon the grant of each Performance
Award; provided, however, that a Performance Period shall not be shorter than
twelve (12) months nor longer than five (5) years. Except as provided in
Section 9 or as may be provided in an Award Agreement, Performance Awards
will be distributed only after the end of the relevant Performance Period. The
performance goals to be achieved for each Performance Period shall be
conclusively determined by the Committee and may be based upon the criteria set
forth in Section 8(b), or in the

 

13

 

case of an Award
that the Committee determines shall not be subject to Section 8 hereof, any
other criteria that the Committee, in its sole discretion, shall determine
should be used for that purpose. The amount of the Award to be distributed
shall be conclusively determined by the Committee. Performance Awards may be
paid in a lump sum or in installments following the close of the Performance
Period or, in accordance with procedures established by the Committee, on a
deferred basis.

 

(i)            Other
Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to any Eligible Person such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan. Other Stock-Based
Awards may be granted to Participants either alone or in addition to other
Awards granted under the Plan, and such Other Stock-Based Awards shall also be
available as a form of payment in the settlement of other Awards granted under
the Plan. The Committee shall determine the terms and conditions of such
Awards. Shares delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(i) shall be purchased for such consideration,
(including without limitation loans from the Company or a Related Entity
provided that such loans are not in violation of the Sarbanes Oxley Act of
2002, or any rule or regulation adopted thereunder or any other applicable law)
paid for at such times, by such methods, and in such forms, including, without
limitation, cash, Shares, other Awards or other property, as the Committee
shall determine.

 

7.             Certain Provisions Applicable to Awards.

 

(a)           Stand-Alone,
Additional, Tandem, and Substitute Awards. Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any Related
Entity, or any business entity to be acquired by the Company or a Related
Entity, or any other right of a Participant to receive payment from the Company
or any Related Entity. Such additional, tandem, and substitute or exchange
Awards may be granted at any time. If an Award is granted in substitution or
exchange for another Award or award, the Committee shall require the surrender
of such other Award or award in consideration for the grant of the new Award.
In addition, Awards may be granted in lieu of cash compensation, including in
lieu of cash amounts payable under other plans of the Company or any Related
Entity, in which the value of Stock subject to the Award is equivalent in value
to the cash compensation (for example, Deferred Stock or Restricted Stock), or
in which the exercise price, grant price or purchase price of the Award in the
nature of a right that may be exercised is equal to the Fair Market Value of
the underlying Stock minus the value of the cash compensation surrendered (for
example, Options or Stock Appreciation Right granted with an exercise price or
grant price “discounted” by the amount of the cash compensation surrendered).

 

(b)           Term
of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided that in no event shall the term of
any Option or Stock Appreciation Right exceed a period of ten years (or in the
case of an Incentive Stock Option such shorter term as may be required under
Section 422 of the Code).

 

14

 

(c)           Form
and Timing of Payment Under Awards; Deferrals. Subject to the
terms of the Plan and any applicable Award Agreement, payments to be made by
the Company or a Related Entity upon the exercise of an Option or other Award
or settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Shares, other Awards or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. Any installment or deferral provided for in the preceding
sentence shall, however, be subject to the Company’s compliance with the
provisions of the Sarbanes-Oxley Act of 2002, the rules and regulations adopted
by the Securities and Exchange Commission thereunder, and all applicable rules
of the national securities exchange on which the Company’s securities are
listed for trading and, if not listed for trading on either the Nasdaq Stock
Market or a national securities exchange, then the rules of the Nasdaq Stock
Market. The settlement of any Award may be accelerated, and cash paid in lieu
of Shares in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events (in addition to a
Change in Control). Installment or deferred payments may be required by the
Committee (subject to Section 10(e) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award Agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of a
reasonable interest rate on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Shares.

 

(d)           Exemptions
from Section 16(b) Liability. If  the Company becomes a Publicly Held
Corporation, it is the intent of the Company that the grant of any Awards to or
other transaction by a Participant who is subject to Section 16 of the
Exchange Act shall be exempt from Section 16 pursuant to an applicable
exemption (except for transactions acknowledged in writing to be non-exempt by
such Participant). Accordingly, if any provision of this Plan or any Award
Agreement does not comply with the requirements of Rule 16b-3 then
applicable to any such transaction, such provision shall be construed or deemed
amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Participant shall avoid liability under
Section 16(b).

 

(e)           Code
Section 409A. If and to the extent that the Committee
believes that any Awards may constitute a “nonqualified deferred compensation
plan” under Section 409A of the Code, the terms and conditions set forth
in the Award Agreement for that Award shall be drafted in a manner that is
intended to comply with, and those provisions (and /or the provisions of the
Plan applicable thereto) shall be interpreted in a manner consistent with, the
applicable requirements of Section 409A of the Code, and the Committee, in
its sole discretion and without the consent of any Participant, may amend any
Award Agreement (and the provisions of the Plan applicable thereto) if and to
the extent that the Committee determines necessary or appropriate to comply
with the applicable requirements of Section 409A of the Code.

 

15

 

8.             Code Section 162(m) Provisions.

 

(a)           Covered
Employees. If the Company becomes a Publicly Held Corporation,
and following the “reliance period” from the public shareholder approval
requirements provided under U.S. Treasury Regulation 1.162-27(f), the
Committee, in its discretion, may determine at the time an Award is granted to
an Eligible Person who is, or is likely to be, as of the end of the tax year in
which the Company would claim a tax deduction in connection with such Award, a
covered employee as defined in Section 162(m)(3) (a “Covered Employee”), that
the provisions of this Section 8 shall be applicable to any such Award
that is granted with an exercise price or base price less than the fair market
value of the Shares on the date of grant.

 

(b)           Performance
Criteria. If an Award is subject to this Section 8, then
the lapsing of restrictions thereon and the distribution of cash, Shares or
other property pursuant thereto, as applicable, shall be contingent upon
achievement of one or more objective performance goals. Performance goals shall
be objective and shall otherwise meet the requirements of Section 162(m)
of the Code and regulations thereunder including the requirement that the level
or levels of performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain.”  One or more of the following business
criteria for the Company, on a consolidated basis, and/or for Related Entities,
or for business or geographical units of the Company and/or a Related Entity
(except with respect to the total shareholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for
such Awards: (1) earnings per share; (2) revenues or margins;
(3) cash flow; (4) operating margin; (5) return on net assets,
investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
earnings after interest expense and before extraordinary or special items;
operating income; income before interest income or expense, unusual items and
income taxes, local, state or federal and excluding budgeted and actual bonuses
which might be paid under any ongoing bonus plans of the Company;
(9) working capital; (10) management of fixed costs or variable costs;
(11) identification or consummation of investment opportunities or
completion of specified projects in accordance with corporate business plans,
including strategic mergers, acquisitions or divestitures; (12) total
shareholder return; (13) debt reduction; (14) market share;
(15) entry into new markets, either geographically or by business unit;
(16) customer retention and satisfaction; (17) strategic plan
development and implementation, including turnaround plans; (18) and/or the
Fair Market Value of a Share. Any of the above goals may be determined on an
absolute or relative basis or as compared to the performance of a published or
special index deemed applicable by the Committee including, but not limited to,
the Standard & Poor’s 500 Stock Index or a group of companies that are
comparable to the Company. The Committee shall exclude the impact of an event
or occurrence which the Committee determines should appropriately be excluded,
including without limitation (i) restructurings, discontinued operations,
extraordinary items, and other unusual or non-recurring charges, (ii) an
event either not directly related to the operations of the Company or not
within the reasonable control of the Company’s management, or (iii) a
change in accounting standards required by generally accepted accounting
principles.

 

16

 

(c)           Performance
Period; Timing For Establishing Performance Goals. Achievement
of performance goals in respect of Performance Awards shall be measured over a
Performance Period no shorter than twelve (12) months and no longer than five
(5) years, as specified by the Committee. Performance goals shall be
established not later than 90 days after the beginning of any Performance
Period applicable to such Performance Awards, or at such other date as may be
required or permitted for “performance-based compensation” under Code
Section 162(m).

 

(d)           Adjustments.
The Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with Awards subject to this Section 8,
but may not exercise discretion to increase any such amount payable to a
Covered Employee in respect of an Award subject to this Section 8. The
Committee shall specify the circumstances in which such Awards shall be paid or
forfeited in the event of termination of Continuous Service by the Participant
prior to the end of a Performance Period or settlement of Awards.

 

(e)           Committee
Certification. No Participant shall receive any payment under
the Plan that is subject to this Section 8 unless the Committee has
certified, by resolution or other appropriate action in writing, that the
performance criteria and any other material terms previously established by the
Committee or set forth in the Plan, have been satisfied to the extent necessary
to qualify as “performance based compensation” under Code Section 162(m).

 

9.             Change in Control.

 

(a)           Effect
of “Change in Control.”  In the event of a Change in Control, each
outstanding Award will be treated as the Committee determines, including,
without limitation, that each Award be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. The Committee will not be required to treat all Awards
similarly in the transaction.:

 

(b)           Definition
of “Change in Control.” 
Unless otherwise specified in an Award Agreement, a “Change in Control”
shall mean the occurrence of any of the following:

 

(i)            The acquisition by any
Person of Beneficial Ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of either
(A) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities) (the foregoing Beneficial Ownership hereinafter being referred to
as a “Controlling Interest”); provided, however, that for purposes of this
Section 9(b), the following acquisitions shall not constitute or result in
a Change of Control: (v) any acquisition directly from the Company;
(w) any acquisition by the Company; (x) any acquisition by any Person
that as of the Effective Date owns Beneficial Ownership of a Controlling
Interest; (y) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary; or
(z) any acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) below; or

 

17

 

(ii)           During any period of
two (2) consecutive years (not including any period prior to the Effective
Date) individuals who constitute the Board on the Effective Date (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

 

(iii)          Consummation of a
reorganization, merger, statutory share exchange or consolidation or similar
corporate transaction involving the Company or any of its Subsidiaries, a sale
or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or stock of another entity by the Company or any
of its Subsidiaries (each a “Business Combination”), in each case, unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the Beneficial Owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than fifty percent (50%) of the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination or any Person that as of the Effective Date owns Beneficial
Ownership of a Controlling Interest) beneficially owns, directly or indirectly,
fifty percent (50%) or more of the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(C) at least a majority of the members of the Board of Directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

(iv)          Approval by the
shareholders of the Company of a complete liquidation or dissolution of the
Company.

 

10.          General Provisions.

 

(a)           Compliance
With Legal and Other Requirements. The Company may, to the
extent deemed necessary or advisable by the Committee, postpone the issuance or
delivery of Shares or payment of other benefits under any Award until
completion of such registration or qualification

 

18

 

of such Shares or
other required action under any federal or state law, rule or regulation,
listing or other required action with respect to any stock exchange or
automated quotation system upon which the Shares or other Company securities
are listed or quoted, or compliance with any other obligation of the Company,
as the Committee, may consider appropriate, and may require any Participant to
make such representations, furnish such information and comply with or be
subject to such other conditions as it may consider appropriate in connection
with the issuance or delivery of Shares or payment of other benefits in
compliance with applicable laws, rules, and regulations, listing requirements,
or other obligations.

 

(b)           Limits
on Transferability; Beneficiaries. No Award or other right or
interest granted under the Plan shall be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of such Participant
to any party, or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution or to a Beneficiary upon the death
of a Participant, and such Awards or rights that may be exercisable shall be
exercised during the lifetime of the Participant only by the Participant or his
or her guardian or legal representative, except that Awards and other rights
(other than Incentive Stock Options and Stock Appreciation Rights in tandem
therewith) may be transferred to one or more Beneficiaries or other transferees
during the lifetime of the Participant, and may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are permitted by the Committee pursuant to the express
terms of an Award Agreement (subject to any terms and conditions which the
Committee may impose thereon). A Beneficiary, transferee, or other person
claiming any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award Agreement
applicable to such Participant, except as otherwise determined by the
Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.

 

(c)           Adjustments.

 

(i)            Adjustments
to Awards. In the event that any extraordinary dividend or other
distribution (whether in the form of cash, Shares, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Shares
and/or such other securities of the Company or any other issuer such that a
substitution, exchange, or adjustment is determined by the Committee to be
appropriate, then the Committee shall, in such manner as it may deem equitable,
substitute, exchange or adjust any or all of (A) the number and kind of
Shares which may be delivered in connection with Awards granted thereafter,
(B) the number and kind of Shares by which annual per-person Award
limitations are measured under Section 5 hereof, (C) the number and
kind of Shares subject to or deliverable in respect of outstanding Awards,
(D) the exercise price, grant price or purchase price relating to any
Award and/or make provision for payment of cash or other property in respect of
any outstanding Award, (E) the automatic share reserve increase provided
under Section 4(b) hereof, and (F) any other aspect of any Award that the
Committee determines to be appropriate.

 

19

 

(ii)           Adjustments
in Case of Certain Corporate Transactions. In the event of any
merger, consolidation or other reorganization in which the Company does not
survive, or in the event of any Change in Control, any outstanding Awards may
be dealt with in accordance with any of the following approaches, as determined
by the agreement effectuating the transaction or, if and to the extent not so
determined, as determined by the Committee: (a) the continuation of the
outstanding Awards by the Company, if the Company is a surviving corporation,
(b) the assumption or substitution for, as those terms are defined in
Section 9(b)(iv) hereof, the outstanding Awards by the surviving
corporation or its parent or subsidiary, (c) full exercisability or
vesting and accelerated expiration of the outstanding Awards, or
(d) settlement of the value of the outstanding Awards in cash or cash
equivalents or other property followed by cancellation of such Awards (which
value, in the case of Options or Stock Appreciation Rights, shall be measured
by the amount, if any, by which the Fair Market Value of a Share exceeds the
exercise or grant price of the Option or Stock Appreciation Right as of the
effective date of the transaction). The Committee shall give written notice of
any proposed transaction referred to in this Section 10(c)(ii) a
reasonable period of time prior to the closing date for such transaction (which
notice may be given either before or after the approval of such transaction),
in order that Participants may have a reasonable period of time prior to the
closing date of such transaction within which to exercise any Awards that are
then exercisable (including any Awards that may become exercisable upon the
closing date of such transaction). A Participant may condition his exercise of
any Awards upon the consummation of the transaction.

 

(iii)          Other
Adjustments. The Committee (and the Board if and only to the
extent such authority is not required to be exercised by the Committee to
comply with Section 162(m) of the Code) is authorized to make adjustments
in the terms and conditions of, and the criteria included in, Awards (including
Performance Awards, or performance goals relating thereto) in recognition of
unusual or nonrecurring events (including, without limitation, acquisitions and
dispositions of businesses and assets) affecting the Company, any Related
Entity or any business unit, or the financial statements of the Company or any
Related Entity, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions or in
view of the Committee’s assessment of the business strategy of the Company, any
Related Entity or business unit thereof, performance of comparable
organizations, economic and business conditions, personal performance of a
Participant, and any other circumstances deemed relevant.

 

(d)           Taxes.
The Company and any Related Entity are authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a Participant,
amounts of withholding and other taxes due or potentially payable in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company or any Related Entity and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make cash payments
in respect thereof in satisfaction of a Participant’s tax obligations, either
on a mandatory or elective basis in the discretion of the Committee.

 

(e)           Changes
to the Plan and Awards. The Board may amend, alter, suspend,
discontinue or terminate the Plan, or the Committee’s authority to grant Awards
under the Plan,

 

20

 

without the consent of
shareholders or Participants, except that any amendment or alteration to the
Plan shall be subject to the approval of the Company’s shareholders not later
than the annual meeting next following such Board action if such shareholder
approval is required by any federal or state law or regulation (including,
without limitation, Rule 16b-3 or Code Section 162(m)) or the rules
of any stock exchange or automated quotation system on which the Shares may
then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to the Plan to shareholders for
approval; provided that, without the consent of an affected Participant, no
such Board action may materially and adversely affect the rights of such
Participant under any previously granted and outstanding Award. The Committee
may waive any conditions or rights under, or amend, alter, suspend, discontinue
or terminate any Award theretofore granted and any Award Agreement relating
thereto, except as otherwise provided in the Plan; provided that, without the
consent of an affected Participant, no such Committee or the Board action may materially
and adversely affect the rights of such Participant under such Award.
Notwithstanding anything to the contrary, the Committee shall not be authorized
to amend any outstanding Option and/or Stock Appreciation Right to reduce the
exercise price or grant price without the prior approval of the shareholders of
the Company.

 

(f)            Limitation
on Rights Conferred Under Plan. Neither the Plan nor any action
taken hereunder or under any Award shall be construed as (i) giving any
Eligible Person or Participant the right to continue as an Eligible Person or
Participant or in the employ or service of the Company or a Related Entity;
(ii) interfering in any way with the right of the Company or a Related
Entity to terminate any Eligible Person’s or Participant’s Continuous Service
at any time, (iii) giving an Eligible Person or Participant any claim to
be granted any Award under the Plan or to be treated uniformly with other
Participants and Employees, or (iv) conferring on a Participant any of the
rights of a shareholder of the Company including, without limitation, any right
to receive dividends or distributions, any right to vote or act by written
consent, any right to attend meetings of shareholders or any right to receive
any information concerning the Company’s business, financial condition, results
of operation or prospects, unless and until such time as the Participant is
duly issued Shares on the stock books of the Company in accordance with the
terms of an Award. None of the Company, its officers or its directors shall
have any fiduciary obligation to the Participant with respect to any Shares
awarded pursuant to this Plan unless and until the Participant is duly issued
Shares on the stock books of the Company in accordance with the terms of an
Award. Neither the Company nor any of the Company’s officers, directors,
representatives or agents are granting any rights under the Plan to the
Participant whatsoever, oral or written, express or implied, other than those
rights expressly set forth in this Plan or the Award Agreement.

 

(g)           Unfunded
Status of Awards; Creation of Trusts. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligation to deliver
Shares pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the creation
of trusts and deposit therein cash, Shares, other Awards or other property, or
make other arrangements to meet the Company’s obligations under the Plan. Such
trusts or other arrangements shall be consistent with the “unfunded” status of
the Plan unless the Committee otherwise

 

21

 

determines with
the consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Committee may specify
and in accordance with applicable law.

 

(h)           Nonexclusivity
of the Plan. Neither the adoption of the Plan by the Board nor
its submission to the shareholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or a committee
thereof to adopt such other incentive arrangements as it may deem desirable
including incentive arrangements and awards which do not qualify under
Section 162(m) of the Code.

 

(i)            Payments
in the Event of Forfeitures; Fractional Shares. Unless otherwise
determined by the Committee, in the event of a forfeiture of an Award with
respect to which a Participant paid cash or other consideration, the
Participant shall be repaid the amount of such cash or other consideration. No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award. The Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

 

(j)            Governing
Law. The validity, construction and effect of the Plan, any
rules and regulations under the Plan, and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware without giving
effect to principles of conflict of laws, and applicable federal law.

 

(k)           Non-U.S.
Laws. The Committee shall have the authority to adopt such
modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or
its Subsidiaries may operate to assure the viability of the benefits from
Awards granted to Participants performing services in such countries and to
meet the objectives of the Plan.

 

(l)            Plan
Effective Date and Shareholder Approval; Termination of Plan.
The Plan shall become effective on the Effective Date, subject to subsequent
approval, within 12 months of its adoption by the Board, by shareholders of the
Company eligible to vote in the election of directors, by a vote sufficient to
meet the requirements of Code Sections 162(m) (if applicable) and 422,
Rule 16b-3 under the Exchange Act (if applicable), applicable  requirements under the rules of any stock
exchange or automated quotation system on which the Shares may be listed or
quoted, and other laws, regulations, and obligations of the Company applicable
to the Plan. Awards may be granted subject to shareholder approval, but may not
be exercised or otherwise settled in the event the shareholder approval is not
obtained. The Plan shall terminate at the earliest of (a) such time as no
Shares remain available for issuance under the Plan, (b) termination of
this Plan by the Board, or (c) the tenth anniversary of the Effective
Date. Awards outstanding upon expiration of the Plan shall remain in effect
until they have been exercised or terminated, or have expired.

 

22Exhibit 10.22

 

[***] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED. 

 

 

Agreement Number 33793

 

SUN SERVICEMANAGERSM AGREEMENT

 

This Sun
ServiceManagerSM Agreement (“Agreement”) is entered into between Sun
Microsystems, Inc., with its principal place of business at 901 San Antonio
Road, Palo Alto, California 94303 (“Sun”) and Strategic Technologies, Inc.,
with its principal place of business at 301 Gregson Drive Cary, North Carolina
27511 (“Reseller”). Reseller is an authorized Sun Direct Value Added Reseller
(“DVAR”) or Indirect Value Added Reseller (“IVAR”) (Reseller Agreement No
CS-US-004107-R) in the United States.

 

1.
SCOPE. This Agreement establishes the terms and conditions
under which Reseller will market and sell, or incorporate for resale, Sun
hardware maintenance, software support and other services (“Services”) in the
United States to end-user support customers other than the Federal Government
(“Support Customers”). Services include, but are not limited to, Sun’s service
support programs (“Support Programs”), educational services and consulting
services.

 

2.                         APPOINTMENT.

 

2.1                 Appointment. This
Agreement designates Reseller as an authorized, non-exclusive “Sun
ServiceManager”. As such, Reseller is authorized to:

 

2.1.1  offer,
promote and market to Support Customers Sun’s standard Services set forth in
Exhibit A, with Sun providing Services directly to Support Customer, subject to
ensuring Support Customer’s execution of the appropriate Sun end-user contract
(Sun ServiceManager acting as a Sun ServiceRepresentativeSM);

 

2.1.2  purchase
Services set forth in Exhibit A and resell such Services to Support Customers,
subject to ensuring Support Customer’s execution of Reseller’s end-user
contract (Sun ServiceManager acting as a Sun ServiceManager);

 

2.1.3  subcontract
Support Customer obligations to Sun, under one or more of Sun’s Support
Programs or other Service offerings; and

 

2.1.4  purchase
Sun educational courses for Reseller’s personnel and Support Programs for
Reseller’s internal systems.

 

Services must be: (i)
sold directly to Support Customers on a face-to-face basis; and (ii) sold to
Support Customers located in the United States.

 

2.2                 Modifications. Sun
reserves the right, at its sole discretion, to change, discontinue, add, or
make substitutions for any Services at any time and from time to time. Sun
reserves the right to periodically establish and amend discounts and prices set
forth on the Enterprise Services U.S. Reseller Price List or the Enterprise
Services U.S. End User Price List (collectively known as “Price List”).

 

3.                         RESELLER
OBLIGATIONS.

 

3.1                 Sale and Support. Reseller will use its
best efforts to offer, promote, market and sell Services. The sale and support
of Services must be performed at all times by Reseller’s full-time personnel
who are trained and certified as specified by Sun. Reseller will contract with
its Support Customers to provide Services which it resells to its Support
Customer on terms substantially similar in all material respects to those
contained in Sun’s end-user contracts. Notwithstanding the foregoing, Reseller
has the right to establish the prices, and all other commercial terms, at which
it resells Services to its Support Customers.

 

3.2                 Support Customers. Reseller will
only resell services to end-user Support Customers. Reseller will concentrate
on those customers to which it has actually sold Sun products. Reseller will
not sell Services to other resellers or other third party maintenance
providers.

 

3.3                 Prerequisites for
Certification. Reseller will complete and maintain the Sun ServiceManager
prerequisites set forth in Exhibit B to comply with the level or Sun
certification it desires. Sun reserves the right to amend the prerequisites
from time to time and Reseller is required to fulfill any new or amended
prerequisites within ninety (90) days of notice of such amendments. Training
and certification may be secured directly from Sun or from any Sun authorized
training provider. All expenses associated with such prerequisites are such
Reseller’s sole responsibility and are incurred at Reseller’s expense. Reseller
must at all times employ certified employees. Replacement or substitute
certified employees must establish the requisite expertise within ninety (90)
days after designation.

 

3.4                 Fair
Representation. Reseller will represent Sun fairly and will make no
representations or guarantees concerning Sun or its Services which are false,
misleading, or inconsistent with those representations set

 

1

 

forth in promotional materials,
literature, manuals and Price Lists published and supplied by Sun from time to
time. Reseller will comply with all applicable laws and regulations in
performing under this Agreement.

 

3.5                 Purchase of
Support Program(s) for Internal Systems. Reseller will purchase either a
Software Only Support Program or SunSpectrumSM Support Program for
each of Reseller’s internal demonstration systems and/or any Sun system
utilized in supporting Reseller’s HelpDesk activities as set forth below in
Section 3.7. All support required by Reseller under this Agreement is provided
in accordance with the Master Terms of Service and the SunSpectrum Support
Program Module attached hereto as Exhibit C (“Support Program Agreement”).
Reseller expressly agrees to be bound by the Support Program Agreement.
Reseller understands that it will receive the level of support according to the
then current program description for the Support Program purchased.

 

3.6                 Designated
Reseller Contacts. Reseller will designate full time employees (“Contacts”)
who will function as the sole point of contact between Sun and Reseller. The
Contacts will also be the central point of contact between Support Customers
and Reseller. Reseller may designate up to three (3) authorized Contacts per
eight (8) hour shift (“Shift”) during the period in which Reseller’s HelpDesk
is provided to Reseller’s Support Customers according to Reseller’s maintenance
agreement with its Support Customers. All Contacts must possess the necessary
expertise and training to interact with Sun in the diagnosis of system hardware
and software malfunctions prior to the commencement of this Agreement, in
accordance with the Prerequisites for Certification (set forth above in Section
3.3) and as otherwise from time to time defined by Sun. Replacement or
substitute Contacts must establish the requisite expertise within thirty (30)
days after designation, provided that at no time may Reseller be without at
least one (1) fully qualified Contact per Shift.

 

3.7                 Support Desk
(“HelpDesk”). Prior to Reseller signing end-user contracts for Services with
Support Customer, Reseller must have a fully operational support desk
(“HelpDesk”). The HelpDesk will be staffed with Contacts (as set forth above in
Section 3.6). Reseller will screen all Support Customer’s service requests and
respond appropriately. Reseller will ensure that its Support Customers do not
contact Sun directly. If it is determined that remedial support by Sun is
required on hardware or software covered by Support Customer’s contract for
Services, Contact will telephone the designated Sun Solution Center to initiate
a service request. Reseller will maintain a record of all Support Customers
service requests and will track the progress of such requests. Sun reserves the
right to carry out, at any time, an audit of Reseller’s HelpDesk to ensure that
the standard of support available to Support Customers is consistent with Sun’s
then prevailing quality standards and procedures. Reseller will provide all
necessary assistance to Sun to conduct the audit. If Reseller’s HelpDesk fails
to pass such audit, Sun reserves the right to: (i) deny Reseller the right to
participate as a Sun ServiceManager; (ii) immediately terminate an existing Sun
ServiceManager Agreement; or (iii) place Reseller on probation.

 

3.8                 Performance.
Reseller understands that levels of service, quality and Support Customer
satisfaction will be measured by Sun with the use of surveys and/or audits
performed either by Sun personnel or an independent company engaged by Sun for
such purpose. Sun reserves the right to contact Support Customers for the
purpose of performing such surveys and/or audits. Notification will be provided
to Reseller prior to audits and Reseller will receive summaries of the results
of such audits.

 

3.9                 Quality
Assurance. Reseller is required to provide high quality service to each of
its Support Customers. In the event that Sun becomes aware of a Support
Customer’s dissatisfaction with the quality of service provided by Reseller,
Sun reserves the right to give Reseller notice requiring Reseller to resolve
the Customer’s concerns promptly. Failure to resolve Customer’s
dissatisfaction, as determined by Sun, within thirty (30) days will be grounds
for immediate termination of this Agreement. If Sun becomes aware of subsequent
cases of Support Customer’s dissatisfaction, or if more than two (2) Support
Customers are dissatisfied with the quality of service provided by Reseller,
Sun reserves the right to terminate Services provided to Reseller and/or
terminate this Agreement.

 

3.10          Support Guide. Sun
Resellers’ policies are detailed in the Enterprise Services Reseller Support
Reference Guide (“Support Guide”). Reseller represents that it has read the
Support Guide and will comply with all applicable rules and procedures. Sun may
modify the Support Guide at any time and from time to time, and Reseller will
comply with any new or modified rules and procedures within a reasonable amount
of time as defined by Sun.

 

3.11          Software Licenses.
Software will be provided to Reseller according to the terms set forth in
Section 6.1, Software. Sun or its independent audit firm may, upon reasonable
notice, examine and audit the records and systems of Resellers and Support
Customers to ensure compliance with the license provision. Any audit will be
performed during Resellers or Support Customers normal business hours and in a
manner which avoids unreasonable interference with Resellers or Support
Customers business operations.

 

3.12          Access to Resource Tools
and Information. Reseller understands that Sun may provide Reseller with
resource tools and information (collectively referred to as “Tools”) for the
sole purpose of selling, and providing, Services to Support Customers under
this Agreement. Reseller will not use the Tools provided for any other purpose.
Reseller understands that all Tools are supplied “AS IS” and Sun disclaims all
warranties (except as set forth below in Section 14). Reseller understands that
the Tools are proprietary and Sun owns all right, title and interest, including
copyrights or other intellectual property rights, in and to any

 

2

 

and all ideas, concepts,
expertise, programs, systems, methodologies, data or other materials embodied
in, underlying or reduced to practice in said Tools.

 

3.13          Indirect Reseller.
In the event that Reseller markets and sells Services through an authorized Sun
Master Reseller, Reseller will be required to execute an Indirect Sun
ServiceManager Addendum to this Agreement or, in the alternative, execute an
Indirect Sun ServiceManager Agreement. Reseller understands that it will be
deemed an “Indirect Reseller” and it will not interact directly with Sun for
the provision of Services. Master Reseller will be responsible for setting the
commercial terms of any resale to Indirect Reseller. Indirect Reseller is
required to interface with Master Reseller at all times unless otherwise
specified by Sun (e.g. Section 3.6, Indirect Reseller’s Contacts will
interact with Master Reseller’s Contacts; Section 3.7, Indirect Reseller’s
Contact will telephone Master Reseller’s HelpDesk to initiate a service
request).

 

4.                         SUN DIRECT
END USER CUSTOMER CONTRACT. 

 

            (Sun
ServiceManager acting as a Sun ServiceRepresentative)

 

4.1                 Referral of
Support Customers. Reseller may submit referrals or leads (“Leads”) to Sun
of potential Support Customers according to the guidelines provided by Sun.
Reseller may provide Sun an individual Lead or multiple Leads. Reseller may
only submit Leads for potential Support Customers to which it has sold Sun
product and/or equipment as an authorized Sun Product Reseller unless otherwise
agreed to in writing by Sun. The list of Leads will include at least the
following information: (i) potential customer name; (ii) contact name and phone
number of potential customer; (iii) type, serial number and quantity of
equipment or Sun product sold to potential customer including the date shipped;
and (iv) Reseller’s Sun DVAR or IVAR number. Reseller must supply such Leads in
a timely manner as defined by Sun.

 

4.2                 Terms of Sale of
Customer  Contract. For all
sales of Services solicited by Reseller whereby Sun will provide Services
directly to Support Customer, all sales must be at prices and upon terms
established by Sun as set forth in the then current Enterprise Services U.S.
End User Price List and the current version of the Sun Support Customer
contract (“Customer Contract”). Sun reserves the right to establish and amend
prices and other terms and conditions of its Customer Contract. Reseller will
not accept orders in Sun’s name nor make price quotations or promises
concerning Services different from those set out in the Enterprise Services
U.S. End User Price List or the Customer Contract without Sun’s prior written
consent. Reseller will have Support Customer execute the then current version
of the appropriate Customer Contract with the agreed terms of sale. All
Customer Contracts will be subject to acceptance or rejection by Sun. Support
Customers orders will not be binding until acceptance by Sun.

 

4.3                 Compensation,
Taxes and Deductions. In the event that any of Reseller’s Leads result in
the execution of a Customer Contract within one (1) year of the product ship
date or if Sun receives an acceptable, executed Customer Contract from
Reseller, Sun will compensate Reseller according to the terms set forth in
Exhibit D. Reseller must report all compensation received pursuant to this
Agreement as income and is responsible for all applicable taxes. Compensation
will not be paid if Reseller is not in compliance with the terms of this
Agreement. Sun may deduct from any sums due to Reseller an amount equal to
compensation previously paid or credited on the sale of Services which are: (i)
cancelled for any reason during the support period; or (ii) for which the
Customer Contract price has, in Sun’s judgment, been rendered uncollectible.

 

4.4                 Support
Customer’s Payment. Reseller will not accept payment on Sun’s behalf from
Support Customer for any Customer Contract, unless otherwise agreed to by Sun.
In the event that Reseller accepts payment from Support Customer, Reseller
understands that Sun will issue Reseller an invoice, including applicable sales
tax, for such Customer Contract and payment terms are net thirty (30) days from
the date of each invoice received by Reseller or thirty (30) days from
Reseller’s receipt of payment from Support Customer, whichever is shorter.

 

4.5                 Renewal of
Customer Contract. Reseller will notify Sun of its intent to pursue renewal
Customer Contracts in subsequent years at the time Reseller submits the initial
Customer Contract to Sun. During the initial effective term of Customer
Contract, Reseller will be responsible for collection of payment from Support
Customer for Services. Reseller will be invoiced and will pay according to
Section 4.4 above. Reseller will facilitate Support Customer’s renewal of
Customer Contract at least ninety (90) days prior to the expiration of Customer
Contract. In the event that Reseller does not secure a renewal Customer
Contract within thirty (30) days prior to the expiration of Customer Contract,
Sun may contact Support Customer directly to facilitate a renewal of Customer
Contract and Reseller will not be entitled to compensation for any renewals
which result from Sun’s contact.

 

5.                         PURCHASE
OF SERVICES FOR RESALE TO SUPPORT CUSTOMERS.

 

            (Sun ServiceManager
acting as a Sun ServiceManager)

 

5.1                 Prices, Discounts
and Taxes. Reseller may purchase Services for resale to end-user Support
Customers. Reseller’s net price for Services will be Sun’s then current “List
Price” (the amount set forth on the Price List for support of the hardware
and/or software, educational services or other support services) at the time
Sun accepts Reseller’s order, less the applicable Sun ServiceManager discount
rate set forth in Exhibit D, subject to any uplifts and/or discounts set forth
in the Price List. These discounts and/or uplifts may be changed by Sun upon
thirty (30) days’ notice. Sun reserves the right to change the List Price of
any Service

 

3

 

at any time. Prices and
license fees are exclusive of all sales and other taxes based upon the value of
the Services, products or software, and Reseller and/or its Support Customers
will pay all taxes as required. Reseller agrees to pay Sun for discounts
extended to Reseller which are based on volume or term of Service and which are
not earned by Reseller. Reseller has the right to set its own resale prices.

 

5.2                 Service Orders
and Delivery. Reseller will submit purchase orders in writing; orders will
not be binding until acceptance by Sun. Sun will use reasonable efforts to meet
the target commencement or delivery dates identified by Reseller. Sun’s Service
offerings are continually evolving. Accordingly, Sun reserves the right to make
modifications to Service offerings, as set forth in Section 2.2 above, from
time to time, and at any time.

 

5.3                 Payment.
Provided that Reseller satisfies Sun’s credit requirements, payment terms are
net thirty (30) days from the date of the invoice unless otherwise modified by
Sun. Sun reserves the right in its reasonable commercial judgment to place
Reseller on credit hold, in which event Sun will promptly inform Reseller and
may delay or reschedule Reseller orders. Sun may discontinue the delivery of
Services upon thirty (30) days’ notice to Reseller if payment has not been
received. Interest will accrue from the date on which payment is due at the
lesser of fifteen percent (15%) per annum or the maximum rate permitted by
applicable law.

 

6.                         SUN’S
OBLIGATIONS.

 

6.1                 Software. For
each Sun Support Program purchased by Reseller for resale to Support Customers,
Sun will provide Reseller software in accordance with the deliverables set out
in then current Support Program description (e.g. SunSpectrum Platinum,
Gold, Silver and Bronze). Resellers will deliver software to Support Customers
in a timely manner. Reseller understands, and will notify Support Customers,
that such software may only be used, or accessed by, systems covered by a
Support Program and that use of software is governed by the applicable software
license obtained with the original software product.

 

6.2                 Fault Reporting.
Sun will provide telephone support and on-site assistance in accordance with
the terms set out in the then current program description for the Support
Program purchased (e.g. SunSpectrum Platinum, Gold, Silver and Bronze),
subject to Reseller’s fulfillment of its obligations set forth above in Section
3. Prior to requesting support from Sun, Reseller must comply with all
published operating and troubleshooting procedures for the covered systems. In
the event that Sun determines, in its reasonable judgment, that Reseller’s use
of telephone support is not reasonable, Sun reserves the right to withdraw such
support and/or charge for it at Sun’s then current published time and materials
rates upon thirty (30) days’ notice to Reseller.

 

6.2.1        Software. Sun will
provide software support for systems covered in accordance with the terms set
out in the then current program description for the specific Support Program
purchased. All reported software faults relating to Sun supported software,
Reseller’s proprietary application and/or third party application will be
handled initially directly by Reseller. Reseller will only pass through to the
designated Sun Solution Center reported Sun supported software faults requiring
escalation. The availability of telephone support is contingent on the proper
use of software. Sun will be under no obligation to provide support should it
be required because of: (i) alterations or modifications of the code; (ii)
causes external to the systems, including but not limited to, failure to
maintain a proper operating environment; (iii) use of the software with
products or equipment not approved by Sun; or (iv) failure to maintain software
at Sun’s current release levels. Support provided as a result of such events or
occurrences will be charged and paid at Sun’s then current published time and
materials rates.

 

6.2.2        Hardware. Sun will
provide hardware support for systems covered in accordance with the terms set
out in the then current program description for the specific Support Program
purchased. Upon notification from Support Customer of a hardware problem which
Reseller can not resolve, Reseller’s Contact will place a hardware fault
service request with the designated Sun Solution Center. A hardware engineer
will respond to the call. Sun will use all reasonable efforts to ensure that
the service request is responded to in accordance with the response times
agreed to between Reseller and Sun for the applicable hardware product. Sun
will only report back to Reseller in circumstances in which a hardware service
request requires Sun internal escalation procedures to be used. Sun’s
obligation to provide hardware support is contingent upon proper use and care
of systems.

 

6.2.3        Exclusions. Sun’s
obligation to provide Services under this Agreement is contingent upon proper
use and care of covered systems. Sun has no obligation to provide support
should such support be required because of: (i) improper use, abuse, accident,
or neglect; (ii) alterations, modifications, or attempts to repair systems not
authorized by Sun; (iii) causes external to the system, such as failure to
maintain environmental conditions within the operating range specified by the
manufacturer of the systems; (iv) attachment of the system to equipment,
software, or other items which are not approved by Sun; (v) relocations or
attempts to relocate systems not supervised by Sun; or (vi) failure to maintain
systems at Sun specified minimum configuration or release level. Any support
delivered by Sun as a result of such events will be invoiced separately and
paid at Sun’s then current published time and materials rates.

 

4

 

6.3                 Sun Educational
Training Courses. Sun will provide enrollment standard Sun educational and
training courses for Reseller’s personnel and Support Customers, subject to
availability. Reseller is responsible for processing enrollment for its
personnel and Support Customers, and for all costs associated with Reseller’s
personnel class attendance, including tuition, transportation and lodging.
Support Customer is responsible for all costs associated with its attendance,
including tuition, transportation and lodging.

 

6.4                 Service
Obligations. Sun’s obligations to provide Services are strictly limited to
those deliverables set forth in the then current program description or Price
List for each Service offering purchased (e.g. Support Programs,
educational services, consulting services) based on availability (due to
technical or other reasons, not all deliverables are available for pass-through
delivery) and subject to modifications set forth in Section 2.2.

 

7.        INTELLECTUAL PROPERTY CLAIMS.
Sun will defend or settle at its option and expense any legal proceeding
brought against Reseller, to the extent that it is based on a claim that the
use of the replacement parts, software updates, product releases, new releases,
maintenance releases, patches and/or SunSolve knowledge database (“Materials”)
provided to Reseller by Sun infringe a trade secret, trademark, copyright or a
U.S. patent. Sun will pay all damages and costs awarded by a court of final
appeal attributable to such claim, provided that Reseller: (i) gives written
notice of the claim promptly to Sun; (ii) gives Sun sole control of the defense
and settlement of the claim; (iii) provides to Sun all available information
and assistance; and (iv) has not compromised or settled such claim. If any
Materials are found to infringe, Sun will: (i) obtain for Reseller the right to
use such Materials; (ii) replace or modify such Materials so that they become
non-infringing; or if neither of these alternatives is reasonably available,
(iii) remove such Materials and refund Reseller’s net book value for these
Materials. Sun has no obligation under this Section 7 for any claim which
results from: (i) use of Materials in combination with any equipment, software
or data not provided by Sun; (ii) Sun’s compliance with designs or
specifications of Reseller; (iii) modification of Materials other than at Sun’s
directions; or (iv) use of an allegedly infringing version of any Materials, if
the alleged infringement could be avoided by the use of a different version
made available to Reseller. THIS SECTION 7
STATES THE ENTIRE LIABILITY OF SUN AND THE EXCLUSIVE REMEDIES OF RESELLER FOR
CLAIMS OF INFRINGEMENT.

 

8.        SUBCONTRACTING. Sun
reserves the right to subcontract its obligations under this Agreement. If Sun
elects to subcontract Services, Sun will remain primarily responsible for the
delivery of Services.

 

9.                         RELATIONSHIP.

 

9.1                 Reseller must
conduct all of its business in its own name and in such a manner as it may see
fit. Reseller is not granted any exclusive rights of any nature whatsoever by
this Agreement.

 

9.2                 This Agreement is
not intended to create a relationship such as a partnership, franchise, joint
venture, agency, master/servant or employment relationship. Neither party may
act in a manner which expresses or implies a relationship other than that of an
independent contractor, nor bind the other party. Reseller will not be entitled
to receive any employee benefits provided to Sun employees.

 

9.3                 Reseller will
not, during the term of this Agreement, promote or solicit orders for any third
party hardware service and/or software support for Sun product.

 

10.                  TRADEMARKS,
LOGOS AND PRODUCT DESIGNS.

 

10.1          “Sun Trademarks” means
all names, marks, logos, designs, trade dress and other brand designations used
by Sun, and its related companies, in connection with products and services.
Reseller may refer to Services by the associated Sun Trademarks, provided that
such reference is not misleading and complies with the then current Sun Trademark and Logo Policies. Reseller
will not remove, alter, or add to any Sun Trademarks, nor will it co-logo
products and services. Reseller is granted no right, title or license to, or
interest in, any Sun Trademarks. Reseller acknowledges Sun’s rights in Sun
Trademarks and agrees that any use of Sun Trademarks by Reseller will inure to
the sole benefit of Sun. Reseller agrees not to: (i) challenge Sun’s ownership
or use of; (ii) register; or (iii) infringe any Sun Trademarks, nor will
Reseller incorporate any Sun Trademarks into Reseller’s trademarks, service
marks, company names, internet addresses, domain names, or any other similar
designations. If Reseller acquires any rights in any Sun Trademarks by
operation of law or otherwise, it will immediately at no expense to Sun, assign
such rights to Sun along with any associated goodwill, applications, and/or
registrations.

 

10.2          Reseller may use the
special program logo, if any, applicable to Reseller’s channel (e.g.
Authorized Reseller Logo) only: (i) as shown in the artwork provided by Sun;
(ii) in pre-sale marketing materials and advertising, but not on goods,
packaging, product labels, documentation or other materials distributed with
products or services; (iii) in a manner no more prominent than Reseller’s
corporate name and logo; and (iv) otherwise in accordance with the then current
Sun Trademark and Logo Policies.

 

11.      CONFIDENTIAL INFORMATION.
If either party desires that information provided to the other party under this
Agreement be held in confidence, that party will, prior to or at the time of
disclosure, identify the information in writing as confidential or proprietary.
The recipient may not disclose such confidential or proprietary information,
may use it only for purposes specifically contemplated in this Agreement, and
must treat it with the same degree of care as it does its own similar
information, but with no less than reasonable care. These obligations do not
apply to information which: a) is or becomes known by recipient without an
obligation to maintain its confidentiality; b) is or becomes generally known to
the public through no act or omission of recipient, or c) is independently
developed by

 

5

 

recipient without use of
confidential  or proprietary
information. This Section will not affect any other confidential disclosure agreement
between the parties. All support manuals, documentation and software are deemed
Sun Confidential Information and Reseller will use such Confidential
Information only for purposes specifically contemplated by this Agreement.

 

12.      AIRCRAFT SERVICE AND NUCLEAR APPLICATIONS.
Reseller acknowledges that products, Services and technical data delivered
under this Agreement are not designed or intended for use in on-line control of
aircraft, air traffic, aircraft navigation or aircraft communications; or in
the design, construction, operation or maintenance of any nuclear facility. SUN DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR SUCH
PURPOSES. Reseller will use its best efforts to ensure that its
Support Customers of products, Services, and technical data are provided with a
copy of the foregoing notice.

 

13.      INDEMNITY AND INSURANCE.
Reseller agrees to indemnify and hold harmless Sun, its affiliates, employees
and agents from and against any and all third party claims, demands, judgments
and awards and expenses related thereto (including reasonable attorneys’ fees)
arising out of the Reseller’s failure to comply with this Agreement or the
conduct of Reseller’s agents or employees in relation thereto. Reseller will
carry liability insurance to protect Sun from any such claims, pay the premiums
therefor, and deliver to Sun, upon request, proof of such insurance (which will
require thirty [30] days’ written notice to Sun in the event of modification or
termination). Sun will have no authority to settle any claim without the prior
written consent of Reseller if Reseller will have any obligation thereunder.
The foregoing will not apply to the extent such claim or cause of action arises
out of an event or occurrence resulting directly and solely from the negligent
acts and omissions of Sun, its agents or employees.

 

14.      LIMITED WARRANTIES.

 

14.1          Sun will perform the
services contracted for herein in a good and workman like manner.

 

14.2          Sun further warrants
that versions of Sun products identified on Sun’s Web site (url:
www.sun.com/y2000/cpl.html) as being Year 2000 compliant (“Listed Products”)
will not produce errors in the processing of date data related to the year
change from December 31, 1999 to January 1, 2000. Date representation,
including leap years, will be accurate when Listed Products are used in
accordance with their accompanying documentation, provided that all hardware
and software products used in combination with Listed Products properly
exchange date data with them.

 

14.2.1     Versions of products
identified on Sun’s external Web site as not yet compliant, but which are
scheduled to be made compliant, will become Listed Products when remedial
replacement parts, patches, software updates or subsequent releases (“Y2K
Fixes”) are issued and properly installed. Y2K Fixes for such products will be
issued no later than June 30, 1999.

 

14.2.2     Other products are not
covered by these warranties.

 

14.2.3     To the extent that Sun
installs Y2K Fixes or performs other services under this Agreement for Reseller,
Sun respectively warrants that: (i) upon installation of the Y2K fixes,
products will become Listed Products; and (ii) services performed on Listed
Products will not result in them ceasing to be Listed Products.

 

14.2.4     Reseller’s sole and exclusive
remedy for Sun’s breach of these warranties will be for Sun, at its option: (i)
to use commercially reasonable efforts to repair Listed Products or provide Y2K
Fixes, as the case may be; (ii) to supply functionally equivalent Year 2000
compliant products; or (iii) if (i) and (ii) are commercially unreasonable, to
refund to Reseller its net book value for non-compliant Listed Products or
products for which scheduled Y2K Fixes were not provided.

 

14.3          UNLESS SPECIFIED IN THIS AGREEMENT, ALL EXPRESS OR
IMPLIED CONDITIONS, REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NON-INFRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS
ARE HELD TO BE LEGALLY INVALID.

 

15.      LIMITATION OF LIABILITY.

 

15.1          EXCEPT FOR OBLIGATIONS UNDER SECTION 5.3 (PAYMENT),
SECTION 7 (INTELLECTUAL PROPERTY CLAIMS), AND SECTION 13 (INDEMNITY AND
INSURANCE), AND/OR BREACH OF SECTION 12 (AIRCRAFT SERVICE AND NUCLEAR
APPLICATIONS) AND ANY APPLICABLE SOFTWARE LICENSE, AND TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW, EACH PARTY’S AGGREGATE LIABILITY TO THE OTHER FOR
ANY HARM, LOSS, DAMAGE, EXPENSE, LIABILITY OR INJURY ARISING OUT OF ANY CLAIM,
ACTION, SUIT, OR PROCEEDING IN ANY CONNECTION WITH THIS AGREEMENT, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE AND INCLUDING BUT NOT LIMITED TO
NEGLIGENCE, WILL BE LIMITED TO THE LESSER OF: (i) THE AMOUNT PAID BY RESELLER
WITHIN THE PREVIOUS TWELVE (12) MONTHS FOR THE SERVICES WHICH ARE THE SUBJECT
MATTER OF THE CLAIMS, OR (ii) $250,000.

 

15.2          IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGE IN CONNECTION
WITH OR

 

6

 

ARISING
OUT OF THIS AGREEMENT (INCLUDING LOSS OF BUSINESS, REVENUE, PROFITS, USE, DATA
OR OTHER ECONOMIC ADVANTAGE), HOWEVER IT ARISES, WHETHER FOR BREACH OR IN TORT,
EVEN IF THAT PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE.

 

15.3          LIABILITY FOR DAMAGES
WILL BE LIMITED AND EXCLUDED, EVEN IF ANY EXCLUSIVE REMEDY PROVIDED FOR IN THIS
AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE.

 

16.      TERM AND TERMINATION.

 

16.1          Term and Termination. This Agreement will
commence on the Effective Date and will remain in force until the date
established according to the following schedule:

 

	
  Effective
  Date:

  	
   

  	
  Expiration Date:

  
	
   

  	
   

  	
  (of each following year)

  
	
  March
  1 - May 31

  	
   

  	
  May 31

  
	
  June
  1 - August 31

  	
   

  	
  August 31

  
	
  September
  1 - November 30

  	
   

  	
  November 30

  
	
  December
  1 - February 28

  	
   

  	
  February 28

  

 

It will be automatically
renewed on a yearly basis thereafter, unless Sun or Reseller tenders notice of
intention not to renew at least thirty (30) days prior to any year’s Expiration
Date. This Agreement terminates automatically upon the expiration or the
termination of Reseller’s Sun Direct Value Added Reseller or Indirect Value
Added Reseller authorization, or as otherwise set forth in this Agreement.
Either party may terminate this Agreement for any material breach of this
Agreement if the other party fails to remedy such breach within thirty (30)
days of receipt of notice.

 

16.2          Effect of Termination.

 

16.2.1          Effect. Upon
termination for any reason, Reseller will immediately cease and desist from any
further: (i) marketing of any of Services, and (ii) resale of any of Services.
Sun will continue to provide Services purchased by Reseller for resale to
Support Customers for the remainder of Reseller’s then existing obligations to
Support Customers pursuant to Reseller’s end-user contracts or for a period of
twelve (12) months after the date of termination of this Agreement, whichever
is shorter. The obligation stated in the preceding sentence will not apply if
Reseller fails to pay for Services after a period of thirty (30) days from the
date of the invoice for such Services. For termination for cause or bankruptcy,
or if Reseller is unable to fulfill its commitment or obligation to Support
Customers (e.g. loss of all of Reseller’s Contacts, failure of
Reseller’s HelpDesk), Sun reserves the right to cancel all obligations owed to
Reseller.

 

16.2.2          Survival. Rights and
obligations under this Agreement which by their nature should survive, will
remain in effect after termination or expiration hereof. Neither party will be
liable to the other for any damages of any kind on account of termination of
this Agreement in accordance with its terms and conditions.

 

17.      IMPORT AND EXPORT LAWS. All
products, Services and technical data delivered under this Agreement are
subject to U.S. export control laws and may be subject to export or import
regulations in other countries. Reseller agrees to comply strictly with all
such laws and regulations and acknowledges that it has the responsibility to
obtain such licenses to export, re-export or import as may be required after
delivery to Reseller.

 

18.      MISCELLANEOUS.

 

	
  18.1

  	
  Entire Agreement.
  This Agreement is the parties’ entire agreement relating to its subject
  matter. It supersedes all prior or contemporaneous oral or written
  communications, proposals, conditions, representations and warranties and
  prevails over any conflicting or additional terms of any quote, order,
  acknowledgement, or other communication between the parties relating to its
  subject matter during the term of this Agreement. No modification to this
  Agreement will be binding, unless in writing and signed by an authorized
  representative of each party.

  
	
  18.2

  	
  Exhibits. The current version of each
  Exhibit is hereby incorporated by reference. Exhibits may be modified only
  upon written consent by both parties, except Sun may modify Exhibits A and D
  upon thirty (30) days’ notice to Reseller, and Exhibit B without any prior
  notice.

  
	
  18.3

  	
  Waiver or Delay. Any express waiver or
  failure to exercise promptly any right under this Agreement will not create a
  continuing waiver or any expectation of non-enforcement.

  
	
  18.4

  	
  Force Majeure. A party is not liable
  under an Agreement for non-performance caused by events or conditions beyond
  that party’s control if the party makes reasonable efforts to perform. This
  provision does not relieve either party of its obligation to make payments
  then owing.

  

 

7

 

	
  18.5

  	
  Change of Control.
  In the event of the direct or indirect taking over or assumption of control
  of Reseller or of substantially all of its assets by any government,
  governmental agency or other third party, Sun may terminate this Agreement
  upon written notice to Reseller.

  
	
  18.6

  	
  Assignment. Neither party may assign or
  otherwise transfer any of its rights or obligations under this Agreement,
  without the prior written consent of the other party, except that Sun may
  assign its right to payment, assign this or any Agreement to an affiliated
  company, subcontract the delivery of Services, or any of these.

  
	
  18.7

  	
  Notices. All written notices required by
  this Agreement must be delivered in person or by means evidenced by a
  delivery receipt and will be effective upon receipt.

  
	
  18.8

  	
  Severability. If any provision, or part
  thereof, in this Agreement is held to be invalid, void, or illegal, it will
  be severed from the Agreement, and will not affect, impair, or invalidate any
  other provision, or part thereof, and it will be replaced by a provision
  which comes closest to such severed provision, or part thereof, in language
  and intent, without being invalid, void, or illegal.

  
	
  18.9

  	
  Meaning of Certain Words. The term
  “includes” and “including” will not be construed to imply any limitation.
  Unless otherwise stated, any reference contained in this Agreement to a
  Section refers to the provision of this Agreement. Wherever the context may
  require, any pronouns used in this Agreement will include the corresponding
  masculine, feminine, or neuter forms, and the singular form of nouns or
  pronouns, including all defined terms, will include the plural and visa
  versa.

  
	
  18.10

  	
  Headings. Section titles and captions
  contained in this Agreement are for reference only and in no way define,
  limit, extend or describe the scope of this Agreement or the intent of any of
  its provisions.

  
	
  18.11

  	
  Governing Law. Any action related to this
  Agreement will be governed by California law and controlling U.S. federal
  law. No choice of law rules of any jurisdiction will apply.

  

 

 

	
  THIS AGREEMENT IS
  EFFECTIVE AS OF 12/2/00 THE PARTIES HAVE READ THIS AGREEMENT AND AGREE TO BE
  BOUND THEREBY.

  
	
   

  	
   

  	
   

  
	
  SUN MICROSYSTEMS, INC.

  	
   

  	
  RESELLER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephanie Hyland

  	
   

  	
  By:

  	
  /s/ Mike Shook

  
	
  Print:

  	
  Stephanie Hyland

  	
   

  	
  Print:

  	
  Mike Shook

  
	
  Title:

  	
  CA Manager

  	
   

  	
  Title:

  	
  CEO/President

  
									

 

8

 

EXHIBIT A - SERVICES OFFERED

 

A.
RESELLER’S NON-EXCLUSIVE AUTHORIZATION. Reseller is authorized to:

 

(i) offer, promote and
market the standard Sun Support Programs set out in the then current Price
List. Sun will provide such Services directly to the Support Customer. Support
Customer will execute the appropriate Sun contract for said Services. Reseller
will receive compensation (a contract commission for commercial customers) in
the amount set forth in Exhibit D; and

 

(ii) purchase standard
Sun Support Programs, educational services and consulting services set out in
the then current Price List for resale to its Support Customers. Support
Customer will execute the appropriate Reseller contract for said Services.
Reseller will receive discounts for such Services in the amounts set forth in
Exhibit D. Due to the unique nature of the technology, unless Reseller can
demonstrate that it has the necessary technical expertise and training to
handle high availability (“HA”) or parallel database (“PDB”) systems,
SPARCserver 10000 or similar class machines and FT SPARC systems, Sun reserves
the right to limit Reseller’s purchase of Services for such systems.

 

9

 

EXHIBIT B - CERTIFICATION PREPREQUISITES AND HELPDESK
REQUIREMENTS

 

Reseller is required to
complete Sun Competency certification, through the Computer Systems Division,
as well as the prerequisites set forth below. Reseller is also required to
maintain and have certified by Sun a contract administration system if the
Reseller participates in the “Renewal of Customer Contracts” as set forth in
Section 4.5 of the Agreement. All services will be performed by qualified
engineers who are: (i) full time employees of Reseller; (ii) listed with a Sun
representative designated by Sun; and (iii) have taken the recommended or
equivalent Product Tier and associated technical training courses as specified
and required for Sun Service Engineers (“Qualified Engineers”). Reseller will
promptly inform its Sun representative of any change in the identity of
Qualified Engineers. Any additional training and other qualifications
requirements will be mutually agreed to by the parties.

 

CERTIFICATION
LEVEL PREREQUISITES: Reseller must complete and maintain the
reseller prerequisites outlined below for each level to qualify for that level’s
corresponding features. The prerequisites are subject to change. Sun will
provide Reseller ninety (90) days to comply with the new or additional
prerequisites. If Reseller does not comply, Sun may terminate Reseller for
cause.

 

	
  Sun ServiceManager: Workgroup
  Service Manager

  	
   

  	
  Sun
  ServiceManager: Enterprise Service Manager

  
	
  To obtain this level,
  Reseller must complete all of the following:

  	
   

  	
  To obtain this level,
  Reseller must complete all of the following:

  
	
   

  	
   

  	
   

  
	
  •          Install
  and maintain an operational HelpDesk certified by Sun;

  	
   

  	
  •          Install
  and maintain an operational HelpDesk certified by Sun;

  
	
   

  	
   

  	
   

  
	
  •          Install
  and maintain a fully functioning Sun network for internal demonstration
  purposes;

  	
   

  	
  •          Install
  and maintain a fully functioning Sun network for demonstration purposes;

  
	
   

  	
   

  	
   

  
	
  •          Purchase,
  at a minimum, Software Only Support or at its option, any other SunSpectrum
  Support Program for internal demonstration systems and/or any Sun system used
  to support Reseller’s HelpDesk;

  	
   

  	
  •          Purchase,
  at a minimum, Software Only Support or at its option, any other SunSpectrum
  Support Program for internal demonstration systems and/or any Sun system used
  to support Reseller’s HelpDesk;

  
	
   

  	
   

  	
   

  
	
  •          Achieve
  Sun Competency: Workgroup certification;

  	
   

  	
  •          Achieve
  Sun Competency: Enterprise certification;

  
	
   

  	
   

  	
   

  
	
  •          Completion
  by a Reseller sales representative of one (1) course designated by Sun; and,

  	
   

  	
  •          Completion
  by a Reseller sales representative of one (1) course designated by Sun;

  
	
   

  	
   

  	
   

  
	
  •          Completion
  by a Reseller technical engineer (“Engineer”) of two (2) courses and
  associated certification, designated by Sun.

  	
   

  	
  •          Completion
  by two (2) Reseller technical engineers (“Engineer”) of three (3) courses per
  Engineer and associated certification, designated by Sun.

  
	
   

  	
   

  	
   

  
	
  If Reseller is a
  Hardware service provider:

  	
   

  	
  If Reseller is a
  Hardware service provider:

  
	
   

  	
   

  	
   

  
	
  •          Purchase
  a ProPAK and execute the appropriate Addendum to this Agreement;

  	
   

  	
  •          Purchase
  a ProPAK and execute the appropriate Addendum to this Agreement;

  
	
   

  	
   

  	
   

  
	
  •          Completion
  by two (2) Engineers of two (2) additional courses, per Engineer, designated
  by Sun.

  	
   

  	
  •          Completion
  by two (2) Engineers of two (2) additional courses, per Engineer, designated
  by Sun.

  

 

RESELLER UNDERSTANDS THAT
BY SIGNING THIS EXHIBIT B THAT IT CERTIFIES THAT IT HAS MET, OR WILL MEET
WITHIN NINETY (90) DAYS FROM THE DATE OF EXECUTION OF THIS AGREEMENT, ALL OF
THE ABOVE MENTIONED PREREQUISITES AND WILL COMPLY WITH THE REPLACEMENT OR
SUBSTITUTE PROVISIONS SET FORTH IN SECTION 3.3 OF THIS AGREEMENT, RESELLER
UNDERSTANDS THAT FAILURE TO COMPLY WILL BE DEEMED A MATERIAL BREACH OF THE
AGREEMENT AND SUN RESERVES THE RIGHT TO IMMEDIATELY TERMINATE THIS AGREEMENT.

 

Certification:
THIS EXHIBIT MUST BE EXECUTED BY AN AUTHORIZED REPRESENTATIVE
OF RESELLER

 

	
  Check appropriate box:

  	
   

  	
  RESELLER:

  
	
   

  	
   

  	
   

  
	
  o

  	
  Sun ServiceManager:
  Workgroup Service Manager

  	
   

  	
  By:

  	
  /s/ Mike Shook

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Sun ServiceManager:
  Enterprise Service Manager

  	
   

  	
  Print Name:

  	
    Mike Shook

  	
   

  
								

 

10

 

EXHIBIT C - SUPPORT PROGRAM AGREEMENT

Master Terms of Service

 

These
Master Terms of Service (“Master Terms”) are between Sun Microsystems, Inc.,
with its principal place of business at 901 San Antonio Road, Palo Alto,
California 94303-4900 (“Sun”) and

 

Strategic Technologies, Inc. (“Customer”) 301 Gregson
Drive Cary, North Carolina 27511 (Principal Place of Business). For purposes of these Master Terms,
Customer includes all of Customer’s U.S. subsidiaries in which Customer has an
ownership interest greater than fifty percent (50%) if said subsidiaries agree,
in writing, to be bound by these Master Terms and applicable Program Modules
and Schedules (Schedules sometimes take the form of quotes).

 

1.        AGREEMENT. These Master Terms between Customer and Sun
describe the general terms by which Customer purchases services from Sun and
Sun delivers services to Customer. The Sun deliverables for each service are
described in Program Modules. The system(s) and installation site(s) covered by
each Program Module are listed in Schedule(s) to that Program Module. Each
Program Module, associated Schedule(s) and/or Exhibits, and these Master Terms
together constitute a separate agreement (“Agreement”). Customer selects
coverage pursuant to a Program Module, and agrees to be bound by and to pay the
fees therefor, a) by submitting a purchase order (or other written form of
order) for the Program Module: or b) by accepting the services from a
particular Program Module. A list of available Program Modules, and the Modules
themselves, may be obtained from Sun at any time.

 

2.        TERMINATION. Either party may terminate an Agreement
immediately by written notice: a) upon material breach by the other party, if
the breach cannot be remedied; or b) if the other party fails to cure any
material remediable breach of a particular Agreement within 30 days of receipt
of written notice of the breach. Rights and obligations under an Agreement
which by their nature should survive, will remain in effect after termination
or expiration of an Agreement.

 

3.        LICENSES. Customer’s permitted use of software provided
under a Program Module is stated in that Program Module. Sun or its independent
audit firm may, upon reasonable notice, examine and audit the records and
systems of Customer to ensure compliance with any Program Module License
section. Any audit will be performed during Customer’s normal business hours
and in a manner which avoids unreasonable interference with Customer’s business
operations.

 

4.        LIMITED
WARRANTIES.

 

4.1                 Sun will perform
the services contracted for herein in a good and workman like manner.

 

4.2                 Sun further
warrants that versions of Sun products identified on Sun’s Web site (url:
www.sun.com/y2000/cpl.html) as being Year 2000 compliant (“Listed Products”)
will not produce errors in the processing of date data related to the year
change from December 31, 1999 to January 1, 2000. Date representation,
including leap years, will be accurate when Listed Products are used in
accordance with their accompanying documentation, provided that all hardware
and software products used in combination with Listed Products properly
exchange date data with them.

 

4.2.1        Versions
of products identified on Sun’s external Web site as not yet compliant, but
which are scheduled to be made compliant, will become Listed Products when
remedial replacement parts, patches, software updates or subsequent releases
(“Y2K Fixes”) are issued and properly installed. Y2K Fixes for such products
will be issued no later than June 30, 1999.

 

4.2.2        Other products are not
covered by these warranties.

 

4.2.3        To the extent that Sun
installs Y2K Fixes or performs other services under this Agreement for
Customer, Sun respectively warrants that: (i) upon installation of the Y2K
fixes, products will become Listed Products: and (ii) services performed on Listed
Products will not result in them ceasing to be Listed Products.

 

4.2.4        Customer’s sole and
exclusive remedy for Sun’s breach of these warranties will be for Sun, at its
option: (i) to use commercially reasonable efforts to repair Listed Products or
provide Y2K Fixes, as the case may be: (ii) to supply functionally equivalent
Year 2000 compliant products; or (iii) if (i) and (ii) are commercially
unreasonable, to refund to Customer its net book value for non-compliant Listed
Products or products for which scheduled Y2K Fixes were not provided.

 

4.3                 UNLESS SPECIFIED
IN AN AGREEMENT, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS AND
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR NON-INFRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT
THAT SUCH DISCLAIMERS ARE HELD TO BE LEGALLY INVALID.

 

5.        LIMITATION OF LIABILITY.
EXCEPT FOR OBLIGATIONS UNDER SECTION 10 (PAYMENT TERMS), SECTION 11
(INTELLECTUAL PROPERTY CLAIMS) AND/OR BREACH OF SECTION 13 (AIRCRAFT SERVICE
AND NUCLEAR APPLICATIONS) AND ANY APPLICABLE SOFTWARE LICENSE, AND TO THE
EXTENT NOT PROHIBITED BY APPLICABLE LAW: A) EACH PARTY’S AGGREGATE LIABILITY TO
THE OTHER FOR CLAIMS RELATING TO AN AGREEMENT, WHETHER FOR BREACH OR IN TORT
AND INCLUDING BUT NOT LIMITED TO NEGLIGENCE, SHALL BE LIMITED TO THE LESSER OF:
(i) THE AMOUNT PAID BY CUSTOMER WITHIN THE PREVIOUS 12 MONTHS FOR THE SERVICES
WHICH ARE THE SUBJECT MATTER OF THE CLAIMS, OR (ii) $250,000; AND B) NEITHER
PARTY WILL BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGE IN CONNECTION WITH OR ARISING OUT OF AN AGREEMENT
(INCLUDING LOSS OF BUSINESS, REVENUE, PROFITS, USE, DATA OR OTHER ECONOMIC
ADVANTAGE), HOWEVER IT ARISES, WHETHER FOR BREACH OR IN TORT, EVEN IF THAT
PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. LIABILITY
FOR DAMAGES SHALL BE LIMITED AND EXCLUDED, EVEN IF ANY EXCLUSIVE REMEDY
PROVIDED FOR IN AN AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE.

 

6.        FORCE MAJEURE. A party is not liable under an Agreement for
non-performance caused by events or conditions beyond that party’s control if
the party makes reasonable efforts to perform. This provision does not relieve
either party of its obligation to make payments then owing.

 

7.        CONFIDENTIAL
INFORMATION. If either
party desires that information provided to the other party under an Agreement
be held in confidence, that party will, prior to or at the time of disclosure,
identify the information in writing as confidential or proprietary. The
recipient may not disclose such confidential or proprietary information, may
use it only for purposes specifically contemplated in this Agreement, and must
treat it with the same

 

11

 

degree
of care as it does its own similar information, but with no less than
reasonable care. These obligations do not apply to information which: a) is or
becomes known by recipient without an obligation to maintain its
confidentiality: b) is or becomes generally known to the public through no act
or omission of recipient, or c) is independently developed by recipient without
use of confidential or proprietary information. This Section will not affect
any other confidential disclosure agreement between the parties.

 

8.        ASSIGNMENT. Neither party may assign or otherwise
transfer any of its rights or obligations under an Agreement, without the prior
written consent of the other party, except that Sun may assign its right to
payment, assign an Agreement to an affiliated company, subcontract the delivery
of services, or any of these. If Sun elects to subcontract services, Sun will
remain primarily responsible for the delivery of services.

 

9.        NOTICES. All written notices required under an
Agreement must be delivered in person or by means evidenced by a delivery receipt
to the other party at the address specified on the appropriate Schedule and
will be effective upon receipt.

 

10.      PAYMENT TERMS. Customer agrees to pay any fees listed on a
Schedule within 30 days from the date of invoice. Sun may discontinue the delivery
of services upon 30 days’ notice to Customer if payment has not been received.
Fees do not include sales tax or any other tax based upon the value of
services, software or systems. These taxes are noted on invoices separately and
are Customer’s responsibility. Interest will accrue from the date on which
payment is due at the lesser of 15% per annum or the maximum rate permitted by
applicable law. Customer agrees to pay for discounts extended to Customer which
are based on volume, term of service or other criteria which are not earned by
Customer. Price Lists and standard discounts are subject to change at any time
but any such changes will not apply, until their renewal, to Schedules in
effect at the time of change. Sun discounts may vary from service offering to
service offering and may not be available on some service offerings.

 

11.      INTELLECTUAL
PROPERTY CLAIMS. Sun
will defend or settle at its option and expense any legal proceeding brought
against Customer, to the extent that it is based on a claim that the use of  the replacement parts, software updates,
maintenance releases, patches and/or SunSolve knowledge database (“Materials”)
provided to Customer by Sun infringe a trade secret, copyright, trademark, or a
U.S. patent. Sun will pay all damages and costs awarded by a court of final
appeal attributable to such claim, provided that Customer: (i) gives written
notice of the claim promptly to Sun; (ii) gives Sun sole control of the defense
and settlement of the claim; (iii) provides to Sun all available information
and assistance; and (iv) has not compromised or settled such claim. If any
Materials are found to infringe, Sun will: (i) obtain for Customer the right to
use such Materials; (ii) replace or modify such Materials so that they become
non-infringing; or if neither of these alternatives is reasonably available,
(iii) remove such Materials and refund Customer’s net book value for these
Materials. Sun has no obligation under this Section 11 for any claim which
results from: (i) use of Materials in combination with any equipment, software
or data not provided by Sun; (ii) Sun’s compliance with designs or
specifications of Customer; (iii) modification of Materials other than at Sun’s
directions; or (iv) use of an allegedly infringing version of any Materials, if
the alleged infringement could be avoided by the use of a different version
made available to Customer. THIS SECTION 11
STATES THE ENTIRE LIABILITY OF SUN AND THE EXCLUSIVE REMEDIES OF CUSTOMER FOR
CLAIMS OF INFRINGEMENT.

 

12.      IMPORT AND
EXPORT LAWS. All
products, services and technical data delivered under an Agreement are subject
to U.S. export control laws and may be subject to export or import regulations
in other countries. Customer agrees to comply strictly with all such laws and
regulations and acknowledges that it has the responsibility to obtain such
licenses to export, re-export or import as may be required after delivery to
Customer.

 

13.      AIRCRAFT
SERVICE AND NUCLEAR APPLICATIONS. Customer acknowledges that products, services and technical data are
not designed or intended for use in on-line control of aircraft, air traffic,
aircraft navigation or aircraft communications; or in the design, construction,
operation or maintenance of any nuclear facility. SUN CLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR SUCH USES.

 

14.      WAIVER OR
DELAY. Any express
waiver or failure to exercise promptly any right under an Agreement will not
create a continuing waiver or any expectation of non-enforcement.

 

15.      ENTIRE
AGREEMENT. An
Agreement is the parties’ entire agreement relating to its subject matter. It
supersedes all prior or contemporaneous oral or written communications,
proposals, conditions, representations and warranties and prevails over any
conflicting or additional terms of any quote, order, acknowledgment, or other
communication between the parties relating to its subject matter during the
term of the Agreement. In the event of any conflict between the terms of these
Master Terms and a Program Module, the order of precedence shall be: a) the
applicable Program Module, and b) these Master Terms. No modification to an
Agreement will be binding, unless in writing and signed by an authorized
representative of each party. If any provision, or part thereof, in an
Agreement, is held to be invalid, void, or illegal, it shall be severed from
the Agreement, and shall not affect, impair, or invalidate any other provision,
or part thereof, and it shall be replaced by a provision which comes closest to
such severed provision, or part thereof, in language and intent, without being
invalid, void, or illegal.

 

16.      GOVERNING LAW. Any action related to an Agreement will be
governed by California law and controlling U.S. federal law. No choice of law
rules of any jurisdiction will apply.

 

12

 

This
is a Program Module as referenced in the Master Terms of Service agreed to
between Sun and Customer. The Master Terms of Service are incorporated into
this Program Module. This SunSpectrumSM Support Program Module describes
the specific terms by which Customer purchases SunSpectrum support services
from Sun and by which Sun, through its Enterprise Services Division, delivers
SunSpectrum support services to Customer. The terms of this Program Module
apply to systems listed on a Schedule or Quote (“Schedule”) which references
this Program Module, and are identified on Sun’s then current Enterprise
Services Price List (“system(s)”). This Program Module is effective as of the
date indicated in the Schedule and continues in effect until the expiration or
termination of all Schedules to this Program Module.

 

1.        CUSTOMER REQUIREMENTS:

 

1.1                 SUPPORT REQUESTS: Customer may designate up to three (3) of
its employees as “Contacts” for each eight (8) hour shift during the period in
which Telephone Assistance is provided by Sun. Only Contacts may initiate
support requests. Each Contact must possess or, at Customer’s expense, acquire
the necessary expertise and training (as from time to time defined by Sun) to
diagnose and resolve system software malfunctions with direction by Sun.

 

1.2                 CUSTOMER’S
DUTIES: Customer will perform
routine system preventative maintenance and cleaning. Prior to requesting
support from Sun, Customer must comply with all published operating and
troubleshooting procedures for the systems. If such efforts are unsuccessful in
eliminating the malfunction, Customer will then promptly notify Sun of the
malfunction. Customer must establish and maintain a procedure external to
systems for reconstruction of lost or altered Files, data, or programs.
Customer must provide Sun support personnel with: (a) reasonable and safe
access to systems; (b) adequate working space and facilities at the
installation site necessary to service systems; and (c) cooperation in
maintaining a site activity log. Customer acknowledges that the examination,
replacement, and handling of hardware components can be hazardous. Support
tasks should only be performed by qualified service personnel with the
appropriate technical training and experience to recognize these hazards (e.g.,
electrostatic discharge) and who observe all protection procedures and
precautions. Customer agrees to use qualified service personnel and to employ
adequate safety precautions in the performance of its obligations hereunder.

 

1.3                 MOVEMENT OF
COVERED SYSTEMS: All services will
be delivered at the installation site(s) indicated on the Schedule(s)
referencing this Program Module. To facilitate continued support, Customer must
give Sun at least thirty (30) days’ written notice, prior to any movement of
systems, specifying the new installation site. Support of systems moved by
Customer to a new installation site is subject to local availability and will
be subject to additional fees. If requested by Customer, Sun may supervise any
movement of systems in accordance with the terms and conditions of the SunMOVESSM
Program Module. If Sun does not supervise the movement of systems. Sun may
require that it inspect and recertify the systems, at Sun’s then current
published time and materials rates, as a condition of continued support of
those systems.

 

1.4                 REMOTE SUPPORT
REQUIREMENTS: To obtain remote
services, including without limitation Remote Systems Monitoring and Remote
Dial-In Analysis, Customer must procure and maintain a Sun-specified gateway,
and Customer is responsible for any costs associated with procuring and
maintaining that gateway. Customer gives Sun permission to remotely access
Customer’s systems, in the event Customer elects to receive remote services.
Customer will be responsible for all outbound telecommunications charges
related to the remote services. If remote services are not permitted or
facilitated by Customer, Sun reserves the right to decline to deliver remote
services and/or to assess additional charges on Customer for the delivery of
services which would otherwise be provided remotely.

 

2.        ADDITIONAL SYSTEMS:
Customer may add systems to a Schedule at Sun’s then current per system fee, at
any time upon notice to Sun, subject to the rights of Sun set forth below in
INSPECTIONS. Sun will provide services for systems added to a Schedule for a
period coterminous with the term of the
Schedule, and Sun shall pro rata the fee for such services. Customer will receive an add-on Schedule
reflecting the additional covered systems and associated additional fee.

 

3.        SCHEDULE TERMINATION AND RENEWAL: Except as provided in Section 2,
Termination, of the Master Terms of Service, neither party may terminate a
Schedule during its initial effective term. The initial effective term is set
forth on the applicable Schedule. A Schedule may be renewed for successive one
(1) year periods upon receipt by Sun of a purchase order, acceptable to Sun, at
least thirty (30) days prior to the expiration of the then current effective
term. Either party may terminate a renewed Schedule by providing sixty (60)
days’ prior written notice.

 

4.        PRICES: Sun retains the right to modify its prices
upon renewal of any Schedule and, in any event, annually. The foregoing
notwithstanding. Sun will continue to honor Customer’s term of service
discount. In the event that the Customer prepays the entire amount due or
issues a fully funded purchase order, Sun will not modify its prices during the
period covered by the prepayment or the fully funded purchase order.

 

5.        INSPECTIONS: Systems are subject to inspection by Sun
prior to the commencement of support, and any costs for required repairs or
updates will be charged to Customer at Sun’s current published time and
material rates.

 

6.        LICENSE: Software updates, version releases and
product releases (collectively “enhancement releases”), maintenance releases,
patches, and SunSolveTM knowledge database provided hereunder may only be used,
or accessed by, systems listed on a Schedule. Use of software enhancement
releases, maintenance releases, and patches is governed by the applicable
software license obtained with the original product. On line versions of
support databases may only be accessed by Contacts for the sole purpose of
diagnosing and resolving problems on systems listed on a Schedule. Use of
educational software and videotape products is governed by, and the Customer
agrees to be bound by, the license agreement accompanying each individual
product.

 

7.        EXCLUSIONS: Sun’s obligation to provide support services
under this Program Module is contingent upon proper use and care of systems.
Sun has no obligation to provide support under this Program Module, should such
support be required because of: (a) improper use, abuse, accident, or neglect;
(b) alterations, modifications, or attempts to repair systems not authorized by
Sun: (c) causes external to the system, such as failure to maintain
environmental conditions within the operating range specified by the
manufacturer of the systems; (d) attachment of the system to equipment,
software, or other items which are not on Sun’s then current Enterprise
Services Price List: (e) relocations or attempts to relocate systems not
supervised by Sun: or (f) failure to maintain software and systems at
Sun-specified minimum configuration or release level. Any support delivered by
Sun as a result of such events will be invoiced separately and paid at Sun’s
then current published time and materials rates. Operating supplies and
accessories, such as magnetic tapes and anti-glare coatings on video display
monitors, and unsupported options arc not covered by this Program Module. Sun
will nave no obligation to provide support under this Program Module if
Customer fails to meet its obligations under Section 10 (Payment Terms) of the
Master Terms of Service.

 

8.        LEVELS OF SUPPORT: The attached pages list the services
provided for systems on a Schedule which designates the corresponding level of
support, subject to payment of the minimum applicable fee for such support
level (“Minimum Fee”). Sun’s service offerings are continually evolving.
Accordingly, Sun reserves the right to make service substitutions and
modifications at any time that do not cause a materially adverse effect in
overall service performance. Customer will receive the following service
deliverables when it purchases the corresponding level of support:

 

13

 

a)
SUNSPECTRUM BRONZESM LEVEL: Customers who purchase the SunSpectrum BronzeSM Level of
support will receive the following services:

 

(1)       TELEPHONE ASSISTANCE: Unlimited, toll-free assistance for Sun
supported software, hardware, and network problems between 8:00 A.M. and 5:00
P.M. (Sun’s local business hours), Monday through Friday, excluding Sun
holidays (“Telephone Assistance Hours”). When a Contact calls for assistance,
Sun will call back within an average of four (4) Telephone Assistance Hours.

 

(2)       REMOTE DIAL-IN ANALYSIS: Remote examination and diagnosis of systems
through the Customer provided gateway.

 

(3)       REPLACEMENT HARDWARE PARTS: A replacement part will be delivered to the
installation site within an average of two (2) business days of Customer’s
request. Customer must have the malfunctioning part ready for immediate
exchange with Sun’s courier.

 

(4)       SOLARISTM ENHANCEMENT RELEASES: Unless otherwise specified by Sun, Customer
will receive periodic delivery of one (1) copy of media with Solaris TM
enhancement releases.

 

(5)       PATCHES AND MAINTENANCE RELEASE ACCESS: Unless otherwise specified by Sun. Customer
will receive patches and maintenance releases for Solaris software.

 

(6)       SUNSOLVE LICENSE: Customer is granted a license to use
SunSolve, subject to the license terms above under LICENSE.

 

(7)       SUNSOLVE EARLYNOTIFIERSM
SERVICE: Periodic
notice from Sun containing information on newly discovered problems and bugs.

 

(8)       ADDITIONAL FEE SERVICES: Subject to an additional per service fee.
Customer may purchase the following additional services:

 

•                             SUN UNBUNDLED SOFTWARE ENHANCEMENTS: Periodic
delivery of one (1) copy of media with enhancement releases. Enhancements may
not be available for all software products.

 

•                             ADDITIONAL MEDIA AND DOCUMENTATION: One
additional copy of media and documentation for Solaris enhancement releases
and/or Sun unbundled software enhancements obtained under this Program Module.

 

•                             OVERNIGHT PARTS DELIVERY: A replacement part
will be delivered to the installation site within an average of one (1)
business day of Customer’s request. Customer must have the malfunctioning part
ready for immediate exchange with Sun’s courier.

 

•                             SAME DAY PARTS DELIVERY: A replacement part
will be delivered to the installation site on the same business day of
Customer’s request. Customer must have the malfunctioning part ready for
immediate exchange with Sun’s courier.

 

•                             ADDITIONAL CONTACTS: Customer may designate
additional Contacts meeting the requirements set forth above under CUSTOMER
REQUIREMENTS, SUPPORT REQUESTS.

 

•                             7 X 24 TELEPHONE ASSISTANCE WITH
CUSTOMER-DEFINED PRIORITY AND RESPONSE TIME: Unlimited, toll-free assistance
for Sun supported software, hardware, and network problems 24 hours per day, 7
days per week, including Sun holidays. When Contact calls for support
assistance. Contact will assign a priority rating to the call: URGENT, SERIOUS,
or NOT CRITICAL:

 

•                            URGENT (system unusable) - Live transfer of
service request during Telephone Assistance Hours.

 

•                            SERIOUS (system seriously impaired) -
Callback within an average of two (2) Telephone Assistance Hours of service
request.

 

•                            NOT CRITICAL - Callback within an average of
four (4) Telephone Assistance Hours of service request.

 

b) SUNSPECTRUM SILVERSM
LEVEL: Customers who purchase the SunSpectrum SilverSM Level of
support will receive the following services:

 

(1)       TELEPHONE ASSISTANCE:
Unlimited, toll-free assistance for Sun supported software, hardware, and
network problems between 8:00 A.M. and 8:00 P.M., Monday through Friday,
excluding Sun holidays (“Telephone Assistance Hours”).

 

(2)       ON-SITE ASSISTANCE: On-site
hardware support assistance between 8:00 A.M. and 5:00 P.M. (Sun’s local
business hours) Monday through Friday, excluding Sun holidays (“On-site
Hours”).

 

(3)       CUSTOMER-DEFINED PRIORITY AND RESPONSE
TIME: When Contact calls for support assistance, Contact will
assign a priority rating to the call: URGENT, SERIOUS, or NOT CRITICAL:

 

•                            URGENT’ (system unusable) - Live transfer of
service request during Telephone Assistance Hours. Personnel arrive at the
installation site within an average of four (4) On-site Hours of service
request for on-site hardware support assistance.

 

•                            SERIOUS (system seriously impaired) -
Callback within an average of two (2) Telephone Assistance Hours of service
request. Personnel arrive at the insinuation site within an average of one (1)
business day for on-site hardware support assistance.

 

•                            NOT CRITICAL - Callback within an average of
four (4) Telephone Assistance Hours of service request. Personnel arrive at the
installation site after an average of one (1) business day or at a later
mutually convenient time for on-site hardware support assistance.

 

(4)       REMOTE DIAL-IN ANALYSIS: Remote examination and diagnosis of systems
through the Customer provided gateway.

 

(5)       SOLARIS ENHANCEMENT RELEASES: Unless otherwise specified by Sun, Customer
will receive periodic delivery of one (1) copy of media with Solaris
enhancement releases.

 

(6)       PATCHES AND MAINTENANCE RELEASE ACCESS: Unless otherwise specified by Sun, Customer
will receive patches and maintenance releases for Solaris software.

 

(7)       SUNSOLVE LICENSE: Customer is granted a license to use
SunSolve, subject to the license terms above under LICENSE.

 

(8)       SUNSOLVE EARLYNOTIFIER SERVICE: Periodic notice from Sun containing
information on newly discovered problems and bugs.

 

(9)       ADDITIONAL FEE SERVICES: Subject to an additional per service fee,
Customer may purchase the following additional services:

 

•                             SUN UNBUNDLED SOFTWARE ENHANCEMENTS: Periodic
delivery of one (1) copy of media with enhancement releases. Enhancements may
not be available for all software products.

 

•                             ADDITIONAL MEDIA AND DOCUMENTATION: One
additional copy of media and documentation for Solaris enhancement releases
and/or Sun unbundled software enhancements obtained under this Program Module.

 

•                             7 X 24 TELEPHONE ASSISTANCE: Unlimited,
toll-free assistance for Sun supported software, hardware, and network problems
24 hours per day. 7 days per week, including Sun holidays. Response time is as
set forth above in Section 8(b)(3), CUSTOMER-DEFINED PRIORITY AND RESPONSE
TIME.

 

•                             7 X 24 ON-SITE ASSISTANCE: On-site hardware
support assistance 24 hours per day, 7 days per week, including Sun holidays.
Response time is as set forth above in Section 8(b)(3). CUSTOMER-DEFINED
PRIORITY AND RESPONSE TIME.

 

•                             2 HOUR ON-SITE RESPONSE: On-site response
time reduced to an average of two (2) On-site Hours for URGENT hardware support
requests.

 

•                             ADDITIONAL CONTACTS: Customer may designate
additional Contacts meeting the requirements set forth above under CUSTOMER
REQUIREMENTS. SUPPORT REQUESTS.

 

•                             PERSONAL TECHNICAL ACCOUNT SUPPORT: SERVICE ACCOUNT
MANAGEMENT: Customer account will be assigned to a Sun Account Advocate who
will assist Customer in assessing critical support issues and help coordinate
Sun’s response. The assigned Sun Account Advocate may also provide available
information on known bugs, potential system problems, and currently available
patches, as well as maintain pertinent account information in Sun’s Customer
Account Management Database. These services are provided to Customer during
Sun’s local business hours, excluding Sun holidays.

 

14

 

c)
SUNSPECTRUM GOLDSM LEVEL. Customers who purchase
the SunSpectrum GoldSM Level of support will receive the following
services.

 

(1)       7 X 24 TELEPHONE ASSISTANCE:
Unlimited, toll-free assistance for Sun supported software, hardware, and
network problems 24 hours per day, 7 days per week, including Sun holidays.

 

(2)       ON-SITE ASSISTANCE:
On-site hardware support assistance between 8:00 A.M. and 8:00 P.M. Monday
through Friday, excluding Sun holidays (“On-site Hours”).

 

(3)       CUSTOMER-DEFINED PRIORITY AND RESPONSE
TIME: When Contact calls for support assistance. Contact will
assign a priority rating to the call: URGENT, SERIOUS, or NOT CRITICAL:

 

•                            URGENT (system unusable) - Live transfer of
service request. Personnel arrive at the installation site within an average of
four (4) On-site Hours of service request for on-site hardware support
assistance.

 

•                            SERIOUS (system seriously impaired) -
Callback within an average of two (2) hours of service request. Personnel
arrive at the installation site within an average of one (1) business day for
on-site hardware support assistance.

 

•                            NOT CRITICAL - Callback within an average
of four (4) hours of service request. Personnel arrive at the installation site
after an average of one (1) business day or at a later mutually convenient time
for on-site hardware support assistance.

 

(4)       REMOTE DIAL-IN ANALYSIS:
Remote examination and diagnosis of systems through the Customer provided
gateway.

 

(5)       REMOTE SYSTEMS MONITORING:
Sun’s remote systems monitoring tools will periodically collect data from
designated systems of Customer. Customer gives Sun ongoing permission to access
the supported system, strictly for the purpose of fulfilling Sun’s support
responsibilities. Customer agrees to obtain an appropriate gateway per the
remote services requirements of Section 1.4 above, and this gateway will
include a Sun-specified telecommunications line dedicated to remote systems
monitoring. Sun reserves the right to limit the use and availability of this
feature at any time. The remote systems monitoring tools may be configured for
the Customer’s requirements.

 

(6)       SOLARIS ENHANCEMENT RELEASES:
Unless otherwise specified by Sun, Customer will receive periodic delivery of
one (1) copy of media with Solaris enhancement releases.

 

(7)       PATCHES AND MAINTENANCE RELEASE ACCESS:
Unless otherwise specified by Sun, Customer will receive patches and
maintenance releases for Solaris software.

 

(8)       SUNSOLVE LICENSE:
Customer is granted a license to use SunSolve, subject to the license terms
above under LICENSE.

 

(9)       SUNSOLVE EARLYNOTIFIER SERVICE:
Periodic notice from Sun with information on newly discovered problems and
bugs.

 

(10)    SITE ACTIVITY LOG: On-site
service performed will be recorded in a site activity log.

 

(11)    PERSONAL TECHNICAL ACCOUNT SUPPORT; SERVICE
ACCOUNT MANAGEMENT: Customer account will be assigned to a
Sun Account Advocate who will assist Customer in assessing critical support
issues and help coordinate Sun’s response. The assigned Sun Account Advocate
may also provide available information on known bugs, potential system
problems, and currently available patches, as well as maintain pertinent
account information in Sun’s Customer Account Management Database. These
services are provided to Customer during Sun’s local business hours, excluding
Sun holidays.

 

(12)    ACCOUNT SUPPORT PLAN:
Sun’s local customer support management will provide the process for the design
of an Account Support Plan for Customer.

 

(13)    ACCOUNT SUPPORT REVIEW:
Semi-annual account review of Customer’s service activity and requirements if
requested by Customer.

 

(14)    SUN VENDOR INTEGRATION PROGRAM (SunVIPSM):
Provision of multivendor software problem management; includes coverage for
approved ISVs (as may be designated by Sun from time to time) with whom
Customer maintains a valid service contract with equivalent hours of coverage
and response times.

 

(15)    MISSION CRITICAL SUPPORT TEAMS:
For Customer defined URGENT problems, telephone assistance will be provided by
a separate team experienced Sun personnel. Availability of such personnel may
be limited during peak call periods and non-business hours, during which times
backup Sun Solution Center engineers will be available to handle service
requests.

 

(16)    ADDITIONAL FEE SERVICES:
Subject to an additional per service fee. Customer may purchase the following
additional services:

 

•                             SUN UNBUNDLED SOFTWARE ENHANCEMENTS:
Periodic delivery of one (1) copy of media with enhancement releases.
Enhancements may not be available for all software products.

 

•                             ADDITIONAL MEDIA AND DOCUMENTATION: One
additional copy of media and documentation for Solaris enhancement releases
and/or Sun unbundled software enhancements obtained under this Program Module.

 

•                             7 X 24 ON-SITE ASSISTANCE: On-site hardware
support assistance 24 hours per day, 7 days per week, including Sun holidays.
Response time is as set forth above in Section 8(c)(3). CUSTOMER-DEFINED
PRIORITY AND RESPONSE TIME.

 

•                             2 HOUR ON-SITE RESPONSE: On-site response
time reduced to an average of two (2) On-site Hours for URGENT hardware support
requests.

 

•                             ADDITIONAL CONTACTS: Customer may designate
additional Contacts meeting the requirements set forth above under CUSTOMER
REQUIREMENTS, SUPPORT REQUESTS.

 

d)
SUNSPECTRUM PLATINUMSM LEVEL: Customers who
purchase the SunSpectrum PlatinumSM Level of support will receive
the following services:

 

(1)       7 X 24 TELEPHONE ASSISTANCE:
Unlimited, toll-free assistance for Sun supported software, hardware, and
network problems 24 hours per day, 7 days per week, including Sun holidays.

 

(2)       7 x 24 ON-SITE ASSISTANCE:
On-site hardware support assistance 24 hours per day, 7 days per week,
including Sun holidays.

 

(3)       CUSTOMER-DEFINED PRIORITY AND RESPONSE
TIME: When Contact calls for support assistance, Contact will
assign a priority rating to the call: URGENT, SERIOUS, or NOT CRITICAL:

 

•                            URGENT (system unusable) - Live transfer of
service request. Personnel arrive at the installation site within an average of
two (2) hours of service request for on-site hardware support assistance.

 

•                            SERIOUS (system seriously impaired) - Live
transfer of service request. Personnel arrive at the installation site within
an average of four (4) hours for on-site hardware support assistance.

 

•                            NOT CRITICAL - Live transfer of service
request. Personnel arrive at the installation site after an average of one (1)
business day or at a later mutually convenient time for on-site hardware
support assistance.

 

(4)       SITE ACTIVITY LOG: On-site
service performed will be recorded in a site activity log.

 

(5)       REMOTE DIAL-IN ANALYSIS:
Remote examination and diagnosis of systems through the Customer provided
gateway.

 

(6)       REMOTE SYSTEMS MONITORING:
Sun’s remote systems monitoring tools will periodically collect data from
designated systems of Customer. Customer gives Sun ongoing permission to access
the supported system, strictly for the purpose of fulfilling Sun’s support
responsibilities. Customer agrees to obtain an appropriate gateway per the
remote services requirements of Section 1.4 above, and this gateway will
include a Sun-specified telecommunications line dedicated to remote systems
monitoring. Sun reserves the right to limit the use and availability of this
feature at any time. The remote systems monitoring tools may be configured for
the Customer’s requirements.

 

(7)       SOLARIS ENHANCEMENT RELEASES:
Unless otherwise specified by Sun, Customer will receive periodic delivery of
one (1) copy of Solaris enhancement releases.

 

15

 

(8)       PATCHES AND MAINTENANCE RELEASE ACCESS:
Unless otherwise specified by Sun, Customer will receive patches and
maintenance releases for Solaris software.

 

(9)       SUNSOLVE LICENSE: Customer
is granted a license to use SunSolve, subject to the license terms above under
LICENSE.

 

(10)    SUNSOLVE EARLYNOTIFIER SERVICE: Periodic
notice from Sun containing information on newly discovered problems and bugs.

 

(11)    PERSONAL TECHNICAL ACCOUNT SUPPORT; SERVICE
ACCOUNT MANAGEMENT: Customer account will be assigned to a
Sun Account Advocate who will assist Customer in assessing critical support
issues and help coordinate Sun’s response. The assigned Sun Account Advocate
may also provide available information on known bugs, potential system
problems, and currently available patches, as well as maintain pertinent
account information in Sun’s Customer Account Management Database. These
services are provided to Customer during Sun’s local business hours, excluding
Sun holidays.

 

(12)    ACCOUNT SUPPORT PLAN:
Sun’s local customer support management will provide the process for the design
of an Account Support Plan for Customer.

 

(13)    ACCOUNT SUPPORT REVIEW:
Monthly account review of Customer’s service activity and requirements if
requested by Customer.

 

(14)    SUN VENDOR INTEGRATION PROGRAM (SunVIP):
Provision of multivendor software problem management; includes coverage for
approved ISVs (as may be designated by Sun from time to time) with whom
Customer maintains a valid service contract with equivalent hours of coverage
and response times.

 

(15)    SKILLS ASSESSMENT: Sun
will assist Customer annually in evaluating the skills of up to ten (10) of
Customer’s technical personnel with responsibility for systems administration.

 

(16)    MISSION CRITICAL SUPPORT TEAMS:
For Customer defined URGENT problems, telephone assistance will be provided by
a separate team of experienced Sun personnel. Availability of such personnel
may be limited during peak call periods and non-business hours, during which
times backup Sun Solution Center engineers will be available to handle service
requests.

 

(17)    SYSTEM AVAILABILITY GUARANTEE:
For properly configured, maintained and administered systems, Sun will commit
to maintain certain levels of System Availability, as defined in Exhibit A,
SunSpectrum System Availability Guarantee.

 

(18)    SOFTWARE RELEASE PLANNING:
Provision of assistance to Customer in evaluating new Solaris releases and
Customer’s need for migration from any of the following versions of Solaris:
Solaris 2.X through the most current version of Solaris. This service is
subject to Customer complying with Sun’s requests for information and data
relevant to providing this service.

 

(19)    SOFTWARE PATCH MANAGEMENT ASSISTANCE:
Provision of assistance to Customer in evaluating whether patches for selected
Sun software products should be applied to Customer’s systems. This service is
subject to Customer complying with Sun’s requests for information and data
relevant to providing this service.

 

(20)    FIELD CHANGE ORDER (“FCO”) MANAGEMENT
ASSISTANCE: Provision of assistance to Customer in evaluating
the service impact of Field Change Orders for selected Sun hardware products.
This service is subject to Customer complying with Sun’s requests for
information and data relevant to providing this service.

 

(21)    INSTALLATION SERVICES:
Customer’s choice of one installation service from among: SunBasic StartSM,
DeskStartSM, ServerStartSM, and SPARCstoragcTM ArrayStartSM.
The particular installation service selected by Customer will be listed on a
Schedule.

 

(22)    ADDITIONAL FEE SERVICES:
Subject to an additional per service fee, Customer may purchase the additional
services:

 

•                             SUN UNBUNDLED SOFTWARE ENHANCEMENTS:
Periodic delivery of one (1) copy of enhancement releases. Enhancements may not
be available for all software products

 

•                             ADDITIONAL MEDIA AND DOCUMENTATION: One
additional copy of media and documentation for Solaris enhancement releases
and/or Sun unbundled software enhancements obtained under this Program Module.

 

•                             ADDITIONAL CONTACTS: Customer may designate
additional Contacts meeting the requirements set forth above under CUSTOMER
REQUIREMENTS, SUPPORT REQUESTS.

 

e)
SOFTWARE ONLY SUPPORT: Customers who purchase Software Only
Support will receive the following services:

 

(1)       TELEPHONE ASSISTANCE:
Unlimited, toll-free assistance for software problems between 8:00 A.M. and
5:00 P.M. Monday through Friday, excluding Sun holidays (“Telephone Assistance
Hours”).

 

(2)       CUSTOMER-DEFINED
PRIORITY AND RESPONSE TIME: When Contact calls for support
assistance. Contact will assign a priority rating to the call: URGENT, SERIOUS,
or NOT CRITICAL:

 

•                            URGENT (system unusable) - Live transfer of
service request during Telephone Assistance Hours.

 

•                            SERIOUS (system seriously impaired) -
Callback within an average of two (2) Telephone Assistance Hours of service
request.

 

•                            NOT CRITICAL - Callback within an average
of four (4) Telephone Assistance Hours of service request.

 

(3)       REMOTE DIAL-IN ANALYSIS:
Remote examination and diagnosis of systems through the Customer provided
gateway.

 

(4)       SUN SUPPORTED SOFTWARE ENHANCEMENT
RELEASES: Unless otherwise specified by Sun, Customer will
receive periodic delivery of one (1) copy of Sun supported software enhancement
releases.

 

(5)       PATCHES AND MAINTENANCE RELEASE ACCESS:
Unless otherwise specified by Sun, Customer will receive patches and
maintenance releases for Solaris software.

 

(6)       SUNSOLVE LICENSE:
Customer is granted a license to use SunSolve, subject to the license terms
above under LICENSE.

 

(7)       SUNSOLVE EARLYNOTIFIER SERVICE:
Periodic notice from Sun containing information on newly discovered problems
and bugs.

 

(8)       ADDITIONAL FEE SERVICES:
Subject to an additional per service fee. Customer may purchase the following
additional services:

 

•                             SUNSOLVE
CD-ROM: Sun will provide Customer the CD-ROM version of SunSolve. Customer is
granted a license to use SunSolve, subject to the license terms above under
LICENSE.

 

•                             7
X 24 TELEPHONE ASSISTANCE: Unlimited, toll-free assistance for Sun supported
software problems 24 hours per day, 7 days per week, including Sun holidays.
Response time is as set forth above in Section 8(e)(2). CUSTOMER-DEFINED
PRIORITY AND RESPONSE TIME.

 

•                             ADDITIONAL
CONTACTS: Customer may designate additional Contacts meeting the requirements
set forth above under CUSTOMER REQUIREMENTS, SUPPORT REQUESTS.

 

•                             PERSONAL
TECHNICAL ACCOUNT SUPPORT; SERVICE ACCOUNT MANAGEMENT: Customer account will be
assigned to a Sun Account Advocate who will assist Customer in assessing
critical support issues and help coordinate Sun’s response. The assigned Sun
Account Advocate may also provide available information on known bugs,
potential system problems, and currently available patches, as well as maintain
pertinent account information in Sun’s Customer Account Management Database.
These services are provided to Customer during Sun’s local business hours,
excluding Sun holidays.

 

•                             ACCOUNT
SUPPORT REVIEW: Semi-annual account review of Customer’s service activity and
requirements if requested by Customer.

 

•                             ADDITIONAL
MEDIA AND DOCUMENTATION: One additional copy of media and documentation for
Solaris enhancement releases and/or Sun unbundled software enhancements
obtained under this Program Module.

 

16

 

EXHIBIT D - CONTRACT COMPENSATION, COMMISSIONS AND DISCOUNTS

 

A. COMPENSATION/CONTRACT COMMISSION
FOR COMMERCIAL CUSTOMERS. 

 

[***] 

 

B. COMMERCIAL CUSTOMER DISCOUNTS. 

 

[***] 

 

[***] 

 

[***] 

 

17

 

 

CHANNEL AGREEMENT

 

Sun Channel Agreement:
CS-US-004107-R

 

SUN CHANNEL AGREEMENT

MASTER TERMS

 

THIS SUN MICROSYSTEMS,
INC. CHANNEL AGREEMENT MASTER TERMS (“Master Terms”), is made as of the 1st day
of February, 2000 (“Effective Date”) between Sun Microsystems, Inc., with its
address at 901 San Antonio Road, Palo Alto, CA 94303 (“Sun”), and Strategic
Technologies Inc. with its address at 301 Gregson Drive Cary NC 27511
(“Partner”, “Regional Systems Partner” or “National Systems Partner”).

 

The
parties agree as follows:

 

1.                         SCOPE OF
AGREEMENT

 

1.1                   Exhibits and Schedules. These Master Terms describe the general terms
by which Partner may purchase Products and Services from Sun or from a Sun
authorized Master Reseller as set forth in an Exhibit. The specific terms
related to the purchase of Equipment, Software and Services are described in
the appropriate Product Exhibits or Service Exhibits and Schedules
(collectively referred to as “Exhibits”). Each Exhibit and these Master Terms
together constitute a separate agreement (“the Agreement”). Exhibits may be
added or deleted from time to time by the agreement of the parties, but Partner
is only authorized to purchase Products or Services hereunder to the extent
that one or more applicable Exhibit(s) is executed and in force.

 

1.2                   Order of Precedence. The provisions of any Exhibit will take
precedence over these Master Terms, to the extent that they are inconsistent.

 

2.                         DEFINITIONS

 

2.1                   EQUIPMENT means the hardware components (may
also be referred to as “hardware”) of Product and includes the media on which
Software is pre-loaded.

 

2.2                   PRODUCT(S) means any Equipment and Software
delivered by Sun directly or indirectly to Partner under the Agreement.

 

2.3                   SERVICE(S) means any consulting, educational
and support services provided directly or indirectly to Partner under the Agreement.

 

2.4                   SOFTWARE means any binary software (and
related documentation) provided by Sun directly or indirectly to Partner under
the Agreement.

 

3.                         TERM AND TERMINATION

 

3.1                   Term. These Master Terms commence on the
Effective Date and will continue until the expiration or termination of all
Exhibits. Each Exhibit shall detail the commencement date of the Exhibit
(“Exhibit Effective Date”).

 

3.2                   Termination at Will. Either party may terminate these Master Terms
for convenience on written notice to the other party in the event that all
Exhibits have been terminated or have expired.

 

3.3                   Termination for Cause. Either party may terminate these Master Terms
and any or all Exhibits:

 

(a)                     immediately, by written notice, upon material
breach by the other party of the Agreement, if such breach cannot be remedied;

 

(b)                    by written notice, if the other party fails to
cure any material remediable breach of the Agreement within thirty (30) days of
receipt of written notice of such breach;

 

(c)                     automatically
if Partner ceases to do business in the normal course, becomes or is declared
insolvent or bankrupt, is the subject of any proceeding relating to the
liquidation or insolvency of Partner which is not dismissed within ninety (90)
days or makes an assignment for the benefit of its creditors;

 

(d)                    immediately by written notice if Partner
undergoes any change in ownership or control (whether by way of voting or
contract rights or otherwise) or in its business, which change Sun considers
material, in light of the fact that Partner has been appointed by Sun because
of its present financial, technical and managerial conditions.

 

3.4                   Termination by Sun. In addition to the general reasons set forth
in Sections 3.2 and 3.3 above, Sun may terminate these Master Terms and any or
all Exhibits, immediately by written notice if Partner:

 

(a)                     breaches any Sun Software license;

 

(b)                    breaches Section 5 (Confidential

 

1

 

Information)
of these Master Terms;

 

(c)                     breaches (or Sun reasonably believes Partner
will breach) the U.S. Export Administration Regulations, the U.S. Foreign
Corrupt Practices Act or similar laws or regulations of any other government;
or

 

(d)                    infringes or challenges the validity of any
Sun copyright or Sun Trademark (as defined herein).

 

3.5                   Consequences of Termination
or Expiration. Upon any
expiration or termination of the Agreement (or all of them), the following will
occur:

 

(a)                     all outstanding invoices and amounts owing from
Partner to Sun will thereupon become immediately due and payable;

 

(b)                    Sun will have the right of first refusal to
repurchase Products in Partner’s inventory at the lower of net invoice price or
the then fair market value, as may be adjusted for any amounts due but unpaid
pursuant to Section 3.5(a). If Sun desires to exercise this right, it will do
so by written notice. Except in the case of Sun’s termination for material
breach, for a period of ninety (90) days from the date of termination or
expiration, Partner may sell and/or license under the terms of the Agreement
any inventory Sun elects not to repurchase;

 

(c)                     Sun will have the right to cancel by written
notice all or part of any unfulfilled order previously accepted by Sun. To the
extent that Sun does not cancel any such order, the Agreement will continue to
apply to such order;

 

(d)                    Partner will immediately return all Sun
property under Partner’s control (including without limitation all Sun
confidential information, schematics, manuals, Software and Sun business plans)
and remove, cancel and/or cease to use the Sun Trademarks, any signs or other
advertising materials referring to Sun, or Products or Services or to Partner
as an authorized reseller of Sun; and

 

(e)                     all of Partner’s rights under the Agreement
shall immediately cease and Partner shall at no time in the future represent
that it is an authorized reseller of Sun or that it is in any way associated
with Sun or Products or Services.

 

3.6                   Survival. Rights and obligations under the Agreement
which by their nature should survive, will remain in effect after termination
or expiration of the Agreement.

 

3.7                   No Liability for Termination
or Expiration. The right of
termination or expiration provided herein is absolute. Each party waives and
releases the other from any claim to compensation or indemnity related to the
permitted or lawful termination of the business relationship established under
the Agreement.

 

4.                         COMMERCIAL TERMS

 

4.1                   Commercial terms for Partners who purchase
Products or Services from a Sun authorized Master Reseller will be determined
by Partner’s agreement with such Master Reseller. This Section 4.1 applies only
to Partners who purchase Products or Services directly from Sun.

 

(a)                     Prices and Taxes. Prices and fees for Products and Services are
exclusive of all shipping and insurance charges, and do not include sales tax
or any other tax based upon the value of Products and/or Services. Partner is
responsible for payment of all such charges and taxes.

 

(b)                    Payments. If Partner satisfies Sun’s credit
requirements, payment terms are net thirty (30) days from (i) the date of
invoice for Products or Services, or (ii) where Partner is purchasing Products,
the date of shipment of Products, whichever is the later. Otherwise terms are
cash in advance of delivery. Sun in its reasonable commercial judgment may
place Partner on credit hold, in which event, Sun will promptly inform Partner
and may: i) with respect to Product purchases, delay or reschedule Partner
orders, and ii) with respect to Services, discontinue delivery upon thirty (30)
days’ written notice to Partner. Interest will accrue from the date on which
payment is due at the lesser of fifteen percent (15%) per annum or the maximum
rate permitted by applicable law. Partner will not be required to pay the
disputed portion of any invoice, pending resolution of that dispute, provided
that written notice of the dispute has been forwarded to Sun in writing within
fifteen (15) days of the date of that invoice.

 

2

 

4.2                   Records and Audits. During the term of the
Agreement and for a period of five (5) years thereafter, Partner will maintain
accurate records as necessary to verity compliance with the Agreement. Sun may
audit these records at any time after reasonable written notice to verify compliance.
Sun will conduct this audit through an independent auditor of Sun’s choice
(“Auditor”). Auditor will be bound to keep confidential the details of the
business affairs of Partner and to limit disclosure of the audit results to
only the sufficiency of the records, including, whether Partner is in
compliance with the terms of the Agreement and the amount, if applicable, of
any required additional payment or other payment adjustment. Except as
described below, Sun will bear all costs and expenses associated with the
exercise of its audit rights. Any errors in payments identified will be
corrected by Partner by appropriate adjustment in payment for the quarterly
period during which the error is discovered. In the event of an underpayment of
more than five percent (5%), Partner will reimburse Sun the amount of the
underpayment, the reasonable charges of the Auditor in performing the audit
that identified the underpayment, and interest on the overdue amount at the
maximum allowable interest rate from the date the obligation accrued.

 

5.        CONFIDENTIAL INFORMATION

 

If either party desires
that information provided to the other party under the Agreement be held in
confidence, that party will, prior to or at the time of disclosure, identify
the information in writing as confidential or proprietary. The recipient may
not disclose such confidential or proprietary information, may use it only for
purposes specifically contemplated in the Agreement, and must treat it with the
same degree of care as it does its own similar information, but with no less
than reasonable care. These obligations do not apply to information which: a)
is or becomes known by recipient without an obligation to maintain its
confidentiality; b) is or becomes generally known to the public through no act
or omission of recipient; or c) is independently developed by recipient without
use of confidential or proprietary information. This section will not affect
any other confidential disclosure agreement between the parties.

 

6.        LIMITED WARRANTIES

 

6.1                   Product and Service Warranties. Any
warranties for Products and Services will be specified in the Exhibit(s).

 

6.2       Year
2000 Warrant.

 

(a)                     Sun warrants
that specified versions of Products identified on Sun’s external Website

(url: www.sun.com/y2000/cpl.html) as being Year 2000 compliant (“Listed
Products”) will not produce errors in the processing of date data related to
the year change from December 31, 1999 to January 1, 2000. Date representation,
including leap years, will be accurate when Listed Products are used in
accordance with their accompanying documentation, provided that all hardware
and software products used in combination with Listed Products properly
exchange date data with them.

 

(b)                    Versions of
Products identified on Sun’s external Web site as not yet compliant, but which
are scheduled to be made compliant, will become Listed Products when remedial
replacement parts, patches, software updates or subsequent releases (“Y2K
Fixes”) are issued and properly installed.

 

(c)                     Other
Products are not covered by these warranties.

 

(d)                    To the extent
that Sun installs Y2K Fixes or performs other Services under the Agreement for
Partner, Sun respectively warrants that:

 

(i) upon installation of
the Y2K Fixes, Products will become Listed Products; and

 

(ii) Services performed
on Listed Products will not result in them ceasing to be Listed Products.

 

(e)                     Partner’s
sole and exclusive remedy for Sun’s breach of these warranties will be for Sun
at its option: (i) to use commercially reasonable efforts to repair Listed
Products or provide Y2K Fixes, as the case may be; (ii) to supply functionally
equivalent Year 2000 compliant products; or (iii) if (i) and (ii) are
commercially unreasonable, to refund to Partner its net book value respectively
for non-compliant Listed Products or products for which scheduled Y2K Fixes
were not provided.

 

6.3                   DISCLAIMER OF WARRANTIES. UNLESS
SPECIFIED IN THE AGREEMENT, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS
AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF

 

3

 

MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS
ARE HELD TO BE LEGALLY INVALID.

 

7.        IMPORT AND EXPORT LAWS

 

All Products, Services
and technical data delivered under the Agreement are subject to U.S. export
control laws and may be subject to export or import regulations in other
countries. Partner agrees to comply strictly with all such laws and regulations
and acknowledges that it has the responsibility to obtain such licenses to
export, re-export or import as may be required after delivery to Partner.

 

8.        NUCLEAR APPLICATIONS

 

Partner acknowledges that
Products and/or Services are not designed or intended for use in the design,
construction, operation or maintenance of any nuclear facility. SUN DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF
FITNESS FOR SUCH USES.

 

9.        TRADEMARKS

 

9.1                   Trademarks. “Sun Trademarks” means all
names, marks, logos, designs, trade dress and other brand designations used by
Sun in connection with Products and Services. Partner may refer to Products and
Services by the associated Sun Trademarks provided that such reference is not
misleading and complies with Sun’s Trademark and Logo Policies. Partner may not
remove or alter any Sun Trademarks, nor may it co-logo Products. Partner agrees
that any use of Sun Trademarks by Partner will inure to the sole benefit of Sun
or its licensors. Partner agrees not to incorporate any Sun Trademarks into
Partner’s trademarks, service marks, company names, internet addresses, domain
names, or any other similar designations.

 

9.2                   Special Program Logos. Partner may use the
special program logo, if any, applicable to Partner’s appointment, as
established in any Exhibit only: (a) as shown in the artwork provided by Sun;
(b) in pre-sale marketing materials and advertising, but not on goods,
packaging, product labels, documentation or other materials distributed with
Products; (c) in a manner no more prominent than Partner’s corporate name and
logo; and (d) otherwise in accordance with the then current Sun Trademark and
Logo Policies.

 

9.3                   Use of Partner Information. Sun has the
right to disclose and publish Partner’s name, address and profile information
in connection with Sun’s Partner programs.

 

10.      INTELLECTUAL PROPERTY CLAIMS

 

Sun will indemnify
Partner for its reasonable expenses and will defend or settle at Sun’s option
and expense any legal proceeding brought against Partner, to the extent that it
is based on a claim that Products infringe a trade secret, a trademark, a mask
work, a copyright or a patent. Sun will pay all damages and costs awarded by
the court which finally determines the case or are incurred in the settlement
thereof, provided that Partner: (a) gives written notice of the claim promptly
to Sun; (b) gives Sun sole control of the defense and settlement of the claim;
(c) provides to Sun all available information and assistance; and (d) has not
compromised or settled such claim. If any Products or Materials are found to infringe,
or in Sun’s opinion are likely to be found to infringe, Sun may elect to: (a)
obtain for Partner the right to use such Products and/or Materials; (b) replace
or modify such Products and/or Materials so that they become non-infringing; or
if neither of these alternatives is reasonably available, (c) remove such
Products and/or Materials and refund Partner’s net book value for these
Products and/or Materials. Sun has no obligation under this Section 10 for any
claim which results from: (a) use of Products and/or Materials in combination
with any equipment, software or data not provided by Sun; (b) Sun’s compliance
with designs or specifications of Partner; (c) modification of Products and/or
Materials; or (d) use of an allegedly infringing version of any Products and/or
Materials, if the alleged infringement could be avoided by the use of a
different version made available to Partner. THIS
SECTION 10 STATES THE ENTIRE LIABILITY OF SUN AND EXCLUSIVE REMEDIES OF Partner
FOR CLAIMS OF INFRINGEMENT.

 

11.      LIMITATION OF LIABILITY

 

Except for obligations
under Section 10 (Intellectual Property Claims), or Section 12 (Indemnity and
Insurance) or breach of any applicable license grant, and to the extent not
prohibited by applicable law (i) each party’s aggregate liability to the other
for claims relating to the Agreement, whether for breach or in tort, including
but not limited to negligence, will be limited to the amount paid to Sun for
Products, Services, or Materials which are the subject matter of the claims, and
(ii) neither party will be liable for any indirect, punitive, special,
incidental or consequential damages in connection with or arising out of the
Agreement (including loss of business, revenue, profits, use, data or other
economic advantage) however it arises, whether for breach or in tort, even if
that

 

4

 

party has been previously
advised of the possibility of such damage. LIABILITY
FOR DAMAGES WILL BE LIMITED AND EXCLUDED EVEN IF ANY EXCLUSIVE REMEDY PROVIDED
FOR IN THE AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE.

 

12.                  INDEMNITY AND
INSURANCE

 

Except for claims arising
under Section 10 (Intellectual Property Claims), Partner will indemnify Sun and
its suppliers from and against all claims, liabilities, damages and costs
(including legal fees and costs), relating to (i) Partner’s use or distribution
of Products and Services under the Agreement or (ii) any acts or omissions of
Partner. Partner shall carry liability insurance to protect Sun from all such
claims, pay the premiums therefor, and deliver to Sun, upon request, proof of
such insurance (which shall require thirty (30) days’ written notice to Sun in
event of modification or termination).

 

13.      FORCE MAJEURE

 

A party is not liable
under the Agreement for non-performance caused by events or conditions beyond
that party’s control, if the party makes reasonable efforts to perform. This
provision does not relieve either party of its obligation to make payments then
owing.

 

14.      WAIVER OR DELAY

 

Any express waiver or
failure to exercise promptly any right under the Agreement will not create a
continuing waiver or any expectation of non-enforcement.

 

15.                  ASSIGNMENTS

 

Neither party may assign
or otherwise transfer any of its rights or obligations under the Agreement,
without the prior written consent of the other party, except that Sun may
assign its right to payment, assign the Agreement to an affiliated company, or
subcontract the delivery of Services or Products. If Sun elects to subcontract
Service or Product delivery, Sun will remain primarily responsible for
delivery.

 

16.                  RELATIONSHIP OF
THE PARTIES

 

An Agreement is not
intended to create a relationship such as a partnership, franchise, joint venture,
agency, or fiduciary or employment relationship. Neither party may act in a
manner which expresses or implies a relationship other than that of independent
contractor, nor bind the other party.

 

17.                  NOTICES

 

All written notices
required by the Agreement must be delivered in person or by means evidenced by
a delivery receipt or via email or website and will be effective upon receipt.

 

18.                  SEVERABILITY

 

If any provision of the
Agreement is held invalid by any law or regulation of any government or by any
court or arbitrator, such invalidity will not affect the enforceability of any
other provisions.

 

19.                  GOVERNING LAW

 

Disputes which cannot be
settled amicably will be governed by the laws of California and controlling US
Federal law. Choice of law rules of any jurisdiction and the United Nations
Convention on Contracts for the International Sale of Goods will not apply.

 

20.                  ENTIRE AGREEMENT

 

20.1             An Agreement (which
includes the applicable Exhibit) is the parties’ entire agreement relating to
its subject matter. It cancels and supersedes all prior or contemporaneous oral
or written communications, proposals, conditions, representations and
warranties and prevails over any conflicting or additional terms of any quote,
order, acknowledgment, or other communication between the parties relating to
its subject matter.

 

20.2             No modification to
the Agreement will be binding, unless in writing and signed by an authorized
representative of each party.

 

20.3             The provisions of
this Agreement are not altered by the terms and conditions of any other
agreement Partner may have with Sun.

 

21.                  SURVIVAL

 

Rights and obligations
under this Agreement which by their nature should survive, will remain in
effect after termination or expiration.

 

5

 

IN
WITNESS WHEREOF, THE DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE
EXECUTED THESE MASTER TERMS AS OF THE EFFECTIVE DATE.

 

	
  SUN
  MICROSYSTEMS, INC.

  	
   

  	
  PARTNER

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joe Womack

  	
   

  	
  By:

  	
  /s/ Mike Shook

  	
   

  
	
  Name:

  	
  Joe Womack

  	
   

  	
  Name:

  	
  Mike Shook

  	
   

  
	
  Title:

  	
  VP Americas eSun
  Partner Sales

  	
   

  	
  Title:

  	
  President

  	
   

  
	
  Date:

  	
  3-7-2000

  	
   

  	
  Date:

  	
  July 26, 2000

  	
   

  
								

 

6

 

	
  

  	
  Sun
  Channel Agreement 

  
	
  CS-US-004107-R

  

 

EXHIBIT A

Software Products

(Partner)

 

This SMI Software Exhibit
(“Software Exhibit”) between Sun Microsystems, Inc. and Partner is an
attachment to the Master Terms between Sun and Partner and is effective as of
the date of execution by Sun (“Exhibit Effective Date”). The Master Terms are
an integral part of this Software Exhibit and are incorporated by reference
herein.

 

1.        DEFINITIONS

 

1.1                   “BCL” means the
Sun binary code license contained in Software or related documentation.

 

1.2                   “Channel Web”
means Sun’s proprietary software channel information system.”

 

1.3                   “End User”
means the entity licensed to use Software under a BCL. If End User is a
corporation or other entity, then, for license fee purposes, “End User”
includes each individual within such corporation or entity licensed to use
Software under the BCL

 

1.4                   “Error” means
any reproducible failure of Software to perform its intended function or any
significant inaccuracy in its related documentation.

 

1.5                   “Error
Correction” means a modification, procedure, patch or routine intended to
correct the practical adverse effect of an Error.

 

1.6                   “Fees” means
the fees set forth in the Price List.

 

1.7                   “Guide” means
the Sun Channel Program Guide or Guides relating to Software ordered under this
Software Exhibit.

 

1.8                   “NFR Software”
means Software designated on the Channel Web as “not for resale” software.

 

1.9                   “Price List”
means the applicable Sun Price List current at the time of execution of this
Software Exhibit and any subsequent price changes made by Sun under Section 3.4
of this Software Exhibit.

 

1.10             “Software”, in
addition to the definition in the Master Terms, includes Error Corrections,
Upgrades, NFR Software and Subscription Kits.

 

1.11             “Software Release” means
a release of Software that is designated by Sun in its sole discretion by a
change in the digit(s) to the left of the decimal point in the Software version
number [(x).x.x].

 

1.12             “Subscription Kit”
means tangible or electronically downloadable materials designated in the Price
List as a Sun Software Subscription Program Product and delivered in kit form.

 

1.13             “Territory” means the
countries or geographic regions identified in Schedule 1 to this
Software Exhibit.

 

1.14             “Update” means a
release of a Software that is designated by Sun in its sole discretion by a
change in the digit(s) to the right of the tenths digit in the Software version
number [x.x.(x)].

 

1.15             “Upgrade” means
Updates, Version Releases, or Software Releases that Sun makes generally commercially
available.

 

1.16             “Version Release”
means a release of a Software that is designated by Sun in its sole discretion
by a change in the tenths digit in the Software version number [x.(x).x].

 

2.        APPOINTMENT OF PARTNER

 

2.1                   Appointment. Sun appoints Partner as a
nonexclusive “Authorized Software Enterprise Partner” and grants Partner the
nonexclusive and nontransferable right to distribute Software to End Users in
the Territory. Sun will segregate Software into product specialty categories
and provide Partner with written notice of these categories. Certain Software,
as identified in the Guide, may only be purchased from Sun Authorized
Distributors. Partner will not advertise, sell, lease or ship Software outside
the Territory without Sun’s prior written consent. Partner may not open
Software prior to delivery to End Users.

 

2.2                   Guide. The Guide sets forth additional
terms and information concerning special promotions and programs relating to
the Sun Software Channel Program. Partner may participate in these promotions
and programs, provided that Partner is in compliance with its other obligations
under the Agreement, and any other agreement with Sun or its affiliated
companies, including payment and reporting obligations. Sun has the right to
change the Guide at any time without notice. Changes to the Guide may be
provided via the Channel Web and Partner agrees to be bound by these changes.
For Partners who do do not have regular access to the internet and Channel Web,
printed copies of changes to the Guide will be provided by Sun upon written
request.

 

2.3                   Obligations. Partner agrees to: (a)
actively market and support Software; (b) follow up on any leads provided by
Sun (which will be considered Sun Confidential Information); (c) ensure that
the marketing and support efforts for Software are conducted by identified and
trained personnel within Partner who have knowledge of Software and meet the
training requirements in the Guide; (d) provide Sun on a quarterly basis with a
relationship planning document as described in the Guide; and (e) not
misrepresent Software or make any representation or warranty inconsistent with
the Master Terms, this Software Exhibit or a BCL.

 

3.        COMMERCIAL
TERMS

 

3.1                   Direct Purchases Only. Commercial terms
for Partners who purchase Software from a Sun Authorized Distributor will be
determined in Partner’s agreement with such Distributor. This Section 3 applies
only to Partners purchase of Software directly from Sun.

 

3.2                   Reporting. Partner will provide to Sun a
written point-of-sale report by the fifth (5th) working day of each
month that includes the name and address of each End User, dollar volume, type
and quantity of Software distributed and other information described in the
Guide. Partner acknowledges that it will not receive marketing funds unless it
has met all

 

1

 

point-of-sale
requirements. In addition, on the first business day of each calendar quarter,
Partner will provide Sun a rolling six (6) month non-binding forecast of
Partner’s annual projected shipments for each Software distributed under this
Agreement. With each forecast, Partner will also provide a completed
relationship management document as described in the Guide. Upon request,
Partner will provide Sun with audited financial statements.

 

3.3                   Returns. Commencing on the Exhibit
Effective Date, on a quarterly basis Partner may request to return for credit,
a quantity of Software (other than NFR Software) the net Fees for which will
not exceed ten percent (10%) of the cumulative net Fees for Software shipped to
Partner during the immediately preceding quarter. Before returning any
Software, Partner must obtain from Sun a “Return Material Authorization” (RMA).
Partner must place an offsetting order with Sun for Software of dollar value at
least equal to any credit issued hereunder. No more than one percent (1%) of
all returned Software may be in opened packages. Partner may not deduct the
amount of any credit from outstanding invoices. Partner will be responsible for
paying all freight and shipping charges for Software returned under this
Section 3.3. Stock rotation is not available for discontinued Software.

 

3.4                   Payments. For all Software purchased under
this Software Exhibit, Partner will pay Sun an amount equal to the Fee, less
the applicable discount set forth in Schedule 1.

 

3.5                   Price Changes. Sun reserves the right to
change the Price List, discounts and Fees for any Software at any time without
approval of Partner. Changes which result in a decrease in Fees will take
effect immediately upon announcement. In the event of a change which increases
Fees, Sun will provide Partner with thirty (30) days prior written notice. If,
during the term of this Software Exhibit, Sun decreases the Fee for any
Software, Partner will be entitled to a credit toward new orders for any
Software placed within thirty (30) days after announcement by Sun. This credit
will be equal to the difference between the new Fee and the Fee paid by Partner
less any previous credits provided, for the affected Software multiplied by the
quantity of that Software in Partner’s inventory as of the date of the
announcement. In order to claim this credit, Partner must, within thirty (30)
days of announcement of a change which decreases Fees, supply Sun with a
written report including: (a) the identification of all affected Software which
were in Partner’s inventory immediately prior to announcement of the decrease;
(b) the net Fee for this Software before and after the decrease and (c) other
information as Sun may reasonably request. Sun will issue the credit to Partner
within sixty (60) days from the date Sun receives the report. All orders for
Software scheduled for shipment or in transit to Partner at the time of the
announcement will be adjusted to the decreased Fee.

 

3.6                   Delivery and Title. Software purchase
orders will be submitted to Sun by Partner under the terms of this Software
Exhibit and subject to a minimum of Five Thousand Dollars ($5,000) per order.
Sun will deliver Software Ex Works, Sun facilities. Partner assumes all risk of
loss or damage upon delivery of Software. Partner acknowledges that it does not
take title to Software, with the exception of media and printed materials, but
rather licenses Software under the terms of this Agreement.

 

3.7                   Updates, Version Releases and Software Releases. Fees
are for the Software releases current as of the Effective Date. Except as
provided in Section 4 of this Software Exhibit, Updates, Version Releases and
Software Releases may require additional payment and be subject to additional
terms. Sun may, without Partner’s approval and without incurring any liability
to Partner, modify Software or discontinue its manufacture, sale or support
upon thirty (30) days prior written notice to Partner.

 

4.        UPGRADES AND
OBSOLESCENCE

 

4.1                   Direct Purchases Only. This Section 4
applies only to Partner’s purchase of Software directly from Sun.

 

4.2                   Upgrades. Subject to the terms below,
Partner may upgrade unopened Software in its inventory before the date Sun
commences shipment of a new Upgrade (“Commencement Date”).

 

(a) Updates from the
immediately proceeding Update version will be provided to Partner at no charge.

 

(b) Upgrades to a Version
Release or Software Release from the immediately preceding Version Release or
Software Release will be provided to Partner at no charge unless Sun increases
its Fees for the new release. If Sun increases its Fees, the new release will
be made available to Partner at the incremental price difference between the
original Fee paid by Partner and the Fee for the new release.

 

(c) To receive Upgrades
under this Section 4, Partner must provide Sun with a written request for the
Upgrade, obtain an RMA and return to Sun all Software to be upgraded. Partner
will pay all shipping charges for returned Software and Upgrades ordered under
this Section 4. Sun will credit Partner with the total amount Partner paid for
the returned Software if the return is accompanied by a firm order for the
immediate delivery of Upgrades whose total payment amount at least equals that
of the returned Software. Partner is limited to two (2) upgrade requests for
each Update, Version Release and Software Release. The first request must be
received by Sun within thirty (30) days of the Commencement Date and the second
request within ninety (90) days of the Commencement Date. If Partner fails to
make the requests within the time frame described, Partner will no longer have
the right to upgrade Software under this Section 4.

 

(d) For a period of
ninety (90) days after Sun discontinues offering Software, Partner will have
the right, shipping prepaid and retaining all risk of loss, to return the
unopened discontinued Software to Sun. Sun will credit Partner with the total
amount Partner paid for the discontinued Software if the return is accompanied
by a firm order for the immediate delivery of other Software whose total
payment amount at least equals that of the returned Software.

 

5.        SUBSCRIPTION
KITS

 

5.1                   Distribution of Subscription Kits. Sun
grants to Partner a non-transferable, nonexclusive, limited license to
distribute Subscription Kits within the Territory. “Subscription Kit” means
tangible or electronically downloadable materials for Licensed Products
designated in the applicable Sun price list as a Sun Software Subscription
products and delivered in a kit form. Subscription Kits contain (i) a

 

2

 

certificate for
the Sun Software Subscription services entitling an End User to receive
drop-shipments of upgrades for Licensed Products directly from Sun; (ii) Sun
Software Subscription services program terms; (iii) End User registration and
acceptance forms to be completed and returned to Sun; and (iv) marketing
collateral.

 

5.2                   Restrictions. Partner may not open any
Subscription Kit prior to delivery to End Users. Partner may not sell or
distribute Subscription Kits unless the End User has first provided
satisfactory proof of its license for the most current version of the Licensed
Products. Proof of End User’s current license will be satisfied by the End User
showing Partner copies of its license or install disk, cover page of the
install disk manual or other form of proof satisfactory to Sun that End User is
licensed to the current version level. Subscription Kits may be purchased only
from Authorized Distributors or Sun.

 

5.3                   Returns. In the event an End User does not
accept the terms provided in the Subscription Kit and elects within fifteen
(15) days of purchase to return the Subscription Kit to Partner, Partner must
accept return of the Subscription Kit and refund the fees paid by End User.
Partner may return, shipping prepaid, to the Authorized Distributor from which
the Subscription Kit was purchased, the Subscription Kit returned by the End
User for a refund of the fees paid by Partner, provided, however, that: (i) the
Subscription Kit was properly returned to Partner by the End User within
fifteen (15) days of its purchase; and (ii) Partner requests and has received a
Return Material Authorization (“RMA”) number from the Authorized Distributor
within five (5) business days of the Subscription Kit’s return by the End User
to Partner.

 

5.4                   Other Programs. Any additional
subscription offerings and requirements are set forth in the Guide.

 

6.        NOT FOR RESALE SOFTWARE

 

6.1                   Purchase. As part of the Sun Software
Channel Program, Partner may obtain not-for-resale copies of Licensed Products
(“NFR Software”). Licensed Products available as NFR Software are designated on
the Channel Web and may be ordered only from Authorized Distributors and Sun.
Partner may use no more than one (1) copy of each NFR Software at each Partner
business location. Each location at which NFR Software is used must be staffed
with Partner employees who have met all applicable training, testing and
authorization requirements set forth in the Guide.

 

6.2                   Labeling and Use. NFR Software must at all
times be clearly labeled “Not For Resale
Software” and may be used only for purposes of internal staff
training, pre-sales support, Partner demonstrations and Sun approved marketing.

 

6.3                   Destruction of NFR Software. Partner must
destroy all NFR Software: (i) upon notice that the NFR Software has been
discontinued or is available as a new revision release or (ii) if it is no
longer being used on a regular basis by Partner for the purposes described in
Section 6. To obtain new revision releases of NFR Software, Partner must
provide AuthorizedDistributor or Sun with written certification that the NFR
Software has been destroyed.

 

6.4                   Restrictions. Partner may not use the NFR
Software for development of software programs; nor copy, resell or distribute the
NFR Software to any third party. In addition to this Section 6, Partner’s use
of NFR Software is further subject to the terms of the BCL which accompanies
the software.

 

7.        SUPPORT

 

During the term of this
Agreement, Partnerwill provide prospective End Users with complete pre-sale
support, and End Users with post-sale support as provided in the Guide.

 

8.        SUN SOFTWARE CHANNEL PROGRAM WEB SITE

 

Subject to the following,
Sun will provide Partner with an account login, password and the site URL for
the Channel Web.

 

8.1 Use of Web Contents. Title to and
ownership in all products, including software products, documents and other
program information contained in the Channel Web (“Web Contents”) will solely
and exclusively be and remain in Sun and its licensors. Partner may use Web
Contents only for: (a) its internal evaluation purposes and (b) at its primary
business facility. If the software products accessed as part of Web Contents contain
third party code, Partner’s use of the products may be subject to additional
terms. Partner is not authorized to make any modifications or revisions to Web
Contents nor distribute Web Contents to any third party. Partner will indemnify
Sun from all liability, expense, and damage of any type arising from Partner’s
violation of this Section 8.1.

 

8.2 No Support for Web Contents. Partner
acknowledges that Sun is not obligated to make any of Web Contents available as
a final Sun product. Sun retains the right to make any modifications or changes
to Web Contents at any time without prior notice to Partner. Web Contents are
provided strictly on an “AS IS” basis. Partner acknowledges that no support
will be provided by Sun for the software product(s) contained in the Web
Contents.

 

9.        WARRANTIES AND DISCLAIMER

 

Sun warrants that for a
period of ninety (90) days from Partner’s receipt of Software provided under
this Software Exhibit, the media on which the Software is furnished will be
free of defects in materials and workmanship under normal use. Partner’s
exclusive remedy and Sun’s entire liability under this limited warranty will be
for Sun to replace the Software media.

 

10.      ADDITIONAL LIMITATIONS

 

IN NO EVENT WILL ANY
ENTITY WORKING WITH SUN ON THE DEVELOPMENT AND SUPPLY OF ANY LICENSED PRODUCT
OR PART THEREOF BE LIABLE UNDER THIS AGREEMENT.

 

11.      TERM AND TERMINATION.

 

This Software Exhibit
will commence upon the Software Effective Date. Unless earlier terminated as
provided in the Master Terms, this Software Exhibit will remain in effect until
the date established in the following schedule:

 

 

	
  Effective
  Date

  	
  Expiration Date 

  (Of the following year)

  
	
  March 1 - August
  31

  September 1 - February 28

  	
  August 31

  February 28

  

 

3

 

IN WITNESS WHEREOF, the
parties have authorized their representatives to execute this Software Exhibit
effective as of the Effective Date written below.

 

	
   

  	
  SUN MICROSYSTEMS, INC.

  	
   

  	
   

  	
  Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joe Womack

  	
   

  	
  By:

  	
  /s/ Mike Shook

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Joe Womack

  	
   

  	
  Name:

  	
  Mike Shook

  
	
   

  	
  (printed or typed)

  	
   

  	
   

  	
  (printed or typed)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP
  Americas eSun Partner Sales

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective
  Date:

  	
  2-1-00

  	
   

  	
  Date:

  	
  Feb 21, 2000

  
						

 

4

 

Schedule 1

to Software Exhibit

(Partner)

 

1. Territory: United
States

 

2.  Discount: [***]

 

5

 

 

SUN PARTNER AGREEMENT#CS-US-004107-R

 

EXHIBIT B

EQUIPMENT PRODUCTS

 

This Sun Equipment
Exhibit (“Equipment Exhibit”) is effective on February 1, 2000 (“Equipment
Exhibit Effective Date”) between Sun Microsystems Inc. and Partner, and is an
attachment to the Master Terms between Sun and Partner. The Master Terms are an
Integral part of this Equipment Exhibit and are incorporated by reference.

 

1.        DEFINITIONS

 

A.                     “Approved
buying and selling locations” means those location addresses whose identity is
set out in Attachment A.

 

B.                       “End User”
means the entity purchasing Equipment for its own use.

 

C.                       “Guide”
means the Sun Partner Reference Guide.

 

D.                      “Master
Reseller” means a designated Sun Authorized master reseller.

 

E.                        “Price
List” means the applicable Sun Price List current at the time of execution of
this Equipment Exhibit and any subsequent price changes made by Sun.

 

F.                        “Sun
Funds” means Sun Enterprise Development Funds.

 

2.        APPOINTMENT OF PARTNER

 

A.                     Appointment.

 

(1)                     Sun appoints
Partner as a non-exclusive Partner (“Partner”). Partner is authorized to
purchase available Product directly from Sun or from its designated Master
Reseller. Product must be (i) sold, leased or rented (collectively referred to
as “sold”); (ii) sold directly to End Users via personal contact, web or
telesales basis; and (iii) installed and supported on a face to face basis at
an End User site in the United States (“Authorized Sale”). Partner is permitted
to outsource services up to ten percent (10%) of its purchases of Product under
this Exhibit B.

 

(2)                     The sale of Products to any entity other than
an End User is prohibited. The sale of Products to the Federal Government is
prohibited unless Partner executes a Government System (GSI) Agreement.
Partner’s primary business must at all times be the sale and support of
computer systems and related services.

 

B.                       Guide. Sun’s Partner’s policies are
detailed in its Partner Reference Guide located at http://channel.sun.com/US/.
Partner represents that it has read the Guide and will comply with all
applicable rules and procedures. Sun may modify the Guide from time to time
upon thirty (30) days’ Notice.

 

3.        SUN FUNDS

 

Partner will receive from
Sun, Sun Funds on certain sales of Products computed at Sun’s list price,
excluding Products not purchased for resale and Products that Partner’s Master
Reseller did not purchase from Sun. Sun may modify this Section upon thirty (30)
days’ Notice.

 

4.        BUSINESS PLAN

 

Partner has submitted a
Business Plan to, and which has been reviewed by, Sun (attached as Attachment
B). Partner has represented to Sun that the Business Plan accurately reflects
the manner in which it intends to market and support Products. Either party may
initiate a review of the accuracy of Partner’s Business Plan upon thirty (30)
days’ notice, provided that Sun shall initiate no more than one review per
calendar quarter.

 

5.        ATTACHMENTS

 

The Attachments may be
modified only upon the mutual consent of the parties, except that Sun may
modify Attachment C (Object Code License) at any time. The current version of
each Attachment is hereby incorporated by reference.

 

6.        PARTNER’S OBLIGATIONS

 

A.           Sale and Support. Partner shall use its
best efforts to promote the sale of Products, and shall purchase and maintain
the demonstration equipment identified in the Guide for each authorized selling
location. Partner shall provide to each End User, as detailed in the Guide and
the Business Plan; (i) complete pre- and post-installation support, including
complete installation, training, and continuous technical service and (ii)
hardware and software maintenance support. Partner must meet the additional
Competency requirements detailed in the Guide prior to selling or installing
Products more than 200 miles from an authorized selling location. The sale and
direct support of Products must be performed at all times by full-time
employees who are Sun trained and Sun certified, including at least one full
time Sun dedicated sales representative and one full time, Sun dedicated
systems engineer. Training and certification may be secured directly from Sun
or from any Sun Authorized training provider. Sun’s support options are set out
in the Guide. Certification requirements are detailed in the Guide.

 

B.             Spare  Parts.
The use of spare parts purchased under the authority granted by this
Agreement is strictly limited to (i) resale to an Partner’s End User for
internal use, or (ii) the service of Products sold and installed by Partner
under this Agreement, except that Partner may use such parts to service all of
an End User’s systems if Partner has sold and installed at least twenty-five
percent (25%) of the systems for which service is being provided.

 

C.             Upgrades. The list price of upgrades is
based upon the return to Sun of specified parts from the system(s) being
upgraded, as set out in the U.S. Price List. Partner is

 

Sun, Sun Microsystems Inc., (“Sun”), and the Sun Logo are
trademarks of Sun Microsystems, Inc. Products bearing SPARC trademarks are
based upon an architecture developed by Sun Microsystems, Inc.

 

1

 

responsible for assuring
that the specified parts are received by Sun within thirty (30) days after
shipment of the upgrade to Partner. If the specified parts are not timely
received, Master Reseller or Sun will invoice and Partner agrees to pay Master
Reseller or Sun (net 30 days) for the non-returned parts, the difference
between the list price of the purchased upgrade(s) and the list price of the
upgraded system(s) if purchased new.

 

D.                      Partner Documentation Business Records, and Reports. Partner
shall furnish to its End Users, at the time of delivery of Products, a sales
receipt stating the date of sale, and, if applicable, the serial number of
Products sold. Partner shall, during the term of this Agreement and for five
(5) years thereafter, keep and maintain complete and accurate business records
with respect to its purchase and sale of all Products, including, all documents
relating to or exchanged between Partner and its End Users, Master Partner and
Sun. Sun may review these records upon request.

 

Partner shall provide
monthly Productivity Status Reports (“PSRs”) to Sun. All PSR reports shall be
Java-based PSR reports only, in accordance with the Java-based PSR guidelines
beginning at url: http://channel.sun.com/US/policies/newpsrguide.html. Upon the
initial failure to timely submit a complete PSR, Sun may cancel Sun Fund
accruals and suspend participation in other programs. Any subsequent failure to
remedy or timely submit a PSR may result in immediate termination of this
Agreement.

 

E.                        Indemnity and Insurance. Partner agrees to
indemnify and hold Sun harmless from and against all claims from Partner’s End
Users or third parties arising out of any acts and/or omissions of Partner or
its employees or representatives. Partner shall carry liability insurance to
protect Sun from all such claims, pay the premiums therefor, and deliver to Sun,
upon request, proof of such insurance (which shall require thirty (30) days’
written notice to Sun in event of modification or termination).

 

F.                        Fair Representation. Partner shall
display, demonstrate, and represent Products fairly and shall make no representations
concerning Sun or its Products which are false, misleading, or inconsistent
with those representations set forth in promotional materials, literature and
manuals published and supplied by Sun. Partner shall comply with all applicable
laws and regulations in performing under this Agreement.

 

G.                       Sun  SPARC
Only. Except as otherwise provided in writing by Sun, Partner shall
not sell, lease, or otherwise deal in any product based on SPARC Architecture,
unless such product (i) is a Sun Product or (ii) is a “laptop system”. A
product is a “laptop” system if it is (i) transportable, (ii) battery operated,
(iii) under sixteen (16) pounds total weight including case, and (iv) packaged
without a CRT. Partner is not prohibited by this Agreement from selling any
product that does not contain the SPARC Architecture.

 

H.                      Partner
shall purchase all Sun Products for resale directly from Sun or from its
designated Master Reseller unless an exception is granted by Sun in writing.
Purchase terms and conditions as may be agreed upon between Partner and
designated Master Reseller shall govern the purchase of Products from the
Master Reseller. Sun will permit Reseller to change the identity of its
designated Master Reseller only once per year, by Notice (which shall include
the effective date of the transition), during the thirty (30) days’ period
prior to each year’s Expiration Date.

 

No
Simultaneous Orders. The
intention of the parties, and the goal of this Agreement, is that Partner will
not issue the same purchase orders for Products from both Sun and Master
Reseller with the intention that one order be canceled in favor of the other
order. Partner must not issue orders directly to Sun and to a Master Reseller
at the same time for the same Products. Failure to comply with this section
will be considered a material breach, and may result in immediate termination
of the Agreement. This section does not otherwise affect terms and conditions
regarding cancellations of, or changes to, orders that may exist in the Agreement
or in any agreement with a Master Reseller.

 

I.                           Limited Warranty. Partner must provide a
warranty to its End Users at least equivalent to the warranty provided by Sun.
Partner agrees to indemnify Sun for any liability or damages caused by
Partner’s provision of any other warranty.

 

J.                          Failure
to comply with any of the foregoing obligations will constitute a material
breach of this Agreement.

 

7.                         LIMITED
WARRANTY

 

7.1 Partner shall arrange
for all End Users to be notified that they will receive the following warranty
(“the Warranty”) directly from Sun. This Warranty will be included in Sun
product packaging. The duration of the Warranty, applicable response times,
start dates and other Warranty details are specified at
http://channel.sun.com/service/globalwarranty/ (“the Warranty Web Page”) and
are applicable as at the date an order is accepted, or at End User’s option,
the Effective Date of this Agreement. Any subsequent changes to Warranty
details specified on the Warranty Web Page will not apply to Products purchased
by End Users prior to any change. Partner is responsible for notifying its end
users that they will receive the following warranty (“The Warranty”) directly
from Sun.

 

7.2                   Subject to 7.1
above, Sun warrants that:

 

(a) the Hardware will be
free from defects in materials and workmanship.

 

(b) The Software will be
warranted either according to the warranty set forth in 7.2 (c) below or the
warranty set out at the Warranty Web-Page, whichever is greater, for such
software specifically mentioned therein.

 

(c) the media on which
Software is furnished (if any) will, for a period of ninety (90) days from the
date of purchase, as evidenced by a copy of the receipt, be free from defects
in materials and workmanship under normal use. Except for the foregoing,
Software is provided “AS IS”.

 

7.3       Partner’s sole and exclusive remedy and
Sun’s entire liability for breach of the warranties specified in this Section
7, will be, at Sun’s option, the repair, replacement of, or refund of the
actual cost paid for the Products (less reasonable wear and

 

2

 

tear)
and/or to replace the media for Software or refund the associated license fee
paid.

 

7.4       This Warranty is contingent upon proper
treatment and use of the Products and maintenance of a safe and suitable site.
No warranty will apply to any Product that has been (i) modified, altered or
adapted without Sun’s written consent, (ii) maltreated or used in a manner
other than in accordance with the Product manual or, (iii) repaired by any
third party in a manner which fails to meet Sun’s maintenance requirements and
quality standards. Product problems attributable to the use of the Products
with equipment or software not supplied or expressly approved by Sun are not
covered under warranty. Any services provided for Product or problems which are
out of warranty will be billed for on a time and materials basis.

 

8.        COMMERCIAL TERMS FOR
PRODUCTS

 

Prices and Discounts 

 

For Products on Sun’s then current, applicable U.S.
Computer Systems Price List, Sun agrees to grant to Partner the following
discounts when Partner purchases directly from Sun: [***] on Category A
Product, [***] on Category B Products and [***] on Category H Products. Such
discounts will not apply to those Products which are listed as
“non-discountable” in the appropriate price list, nor may they be applied to
exceed any listed maximum discount. Such discounts will apply towards purchases
of discountable spare parts, but such discounts will not apply to purchases of
training, installation (except where included in the purchase price of the
Products), consulting, repairs, maintenance work or similar services and source
code license fees. 

 

Orders and Delivery. 

 

When Partner purchases direct from Sun, Partner shall
submit purchase orders in writing or electronically via Sun’s eCommerce site in
accordance with the requirements defined on that site. Order acceptance will
only be effective upon issuance of Sun’s order acknowledgement. Each order must
be for a minimum of five hundred dollars ($500.00) Sun will use reasonable
efforts to meet target delivery dates identified on the order acknowledgement.
Title to Products (except Software) and risk of loss or damage to Products will
pass to Partner [***]. Sun reserves the right to make Product substitutions and
modifications that do not cause a material adverse affect in overall Product
performance. 

 

Rescheduling
and Reconfiguration. 

 

Partner may, when purchasing direct from Sun,
reschedule or reconfigure all or part of any specific orders once at no charge,
as long as a “Change Purchase Order” is received by Sun at least thirty (30)
days prior to the scheduled delivery date and the rescheduled delivery date is
within sixty (60) days of the original date. If an order is rescheduled or
reconfigured at Partner’s request on any other basis, or if Sun rescheduled the
order because Partner fails to meet an obligation under this Agreement, Sun may
charge Partner a restocking fee equal to [***] of the list price of the
rescheduled or reconfigured portion of the order. If Partner refuses shipment
at its requested delivery location, Sun may charge Partner a restocking fee of
[***] of the list price of the shipment. 

 

9.                         ASSIGNMENT
OF PURCHASING RIGHTS

 

Partner
may receive an assignment of purchase rights from an approved third party when
the third party receives a purchase order from its end user so that Partner may
procure Product for said third party. A separate assignment agreement
(“Assignment Agreement”) must be signed by Sun, Partner and third party
authorized signatories.

 

10.                  TERM AND
TERMINATION

 

Term. This Agreement shall commence on the Equipment Exhibit Effective Date
and shall remain in force until the date established according to the following
schedule:

 

	
  Effective
  Date:

  	
  Expiration
  Date:

  (of each following
  year)

  
	
  March 1 - August
  31

  	
  August
  31

  
	
  September 1 -
  February 28

  	
  February
  28

  

 

It
shall be automatically renewed on an annual basis thereafter, unless at least
thirty (30) days prior to any year’s Expiration Date, Sun or Partner tenders
Notice of Intention not to renew.

 

11.                  STATUTE OF
LIMITATIONS

 

No
claim or action, regardless of form, arising out of this Agreement may be
brought by either party more than two (2) years after the claim or cause of
action has arisen, or in the case of non-payment, more than two (2) years from
the date payment was due.

 

12.                  GOVERNING LAW

 

Any
claim or cause of action must be brought solely and exclusively in the courts
of the state of California

 

IN
WITNESS WHEREOF, THE DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE
EXECUTED THIS AGREEMENT, AS OF THE DATE FIRST ABOVE WRITTEN

 

	
  SUN
  MICROSYSTEMS INC.:

  	
   

  	
  PARTNER

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joe Womack

  	
   

  	
  By:

  	
  /s/ Mike Shook

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Joe Womack

  	
   

  	
  Name:

  	
  Mike Shook

  	
   

  
	
   

  	
  (Print or Type)

  	
   

  	
   

  	
  (Print or Type)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP Americas eSun
  Partner Sales

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  3-2-00

  	
   

  	
  Date:

  	
  Feb 21, 2000

  	
   

  
								

 

3

 

ATTACHMENT A

 

AUTHORIZED LOCATIONS/MASTER RESELLER

 

Headquarters

 

 

MASTER RESELLER

 

4

 

ATTACHMENT B

 

BUSINESS PLAN

 

Attached

 

5

 

ATTACHMENT C

 

END USER OBJECT CODE LICENSE

 

SUN IS WILLING TO LICENSE
THE OPERATING SYSTEM SOFTWARE TO YOU ONLY UPON THE CONDITION THAT YOU ACCEPT
ALL OF THE TERMS CONTAINED IN THIS LICENSE AGREEMENT. READ THE TERMS AND
CONDITIONS OF THIS LICENSE CAREFULLY BEFORE USING THE SOFTWARE. BY USING THE
SOFTWARE, YOU AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. IF YOU ARE
NOT WILLING TO BE BOUND BY THIS AGREEMENT, YOU ARE NOT AUTHORIZED TO USE THE
OPERATING SYSTEM SOFTWARE.

 

1.        License
to Use. Customer is granted a non-exclusive and non-transferable
license (“License”) for the use of the applicable SolarisR* operating system
software in machine-readable form, together with accompanying documentation
(“Software”), by the number of users and with the class of computer hardware
for which the corresponding fee has been paid.

 

2.        License
to Develop. In the event that Customer desires to develop software
programs which incorporate portions of Software (“Developed Programs”), the
following provisions apply, to the extent applicable: Developed Programs are to
have an application programming interface that is the same as that of Software;
fonts within Software are to remain associated with their toolkit or server;
Developed Programs may be used and distributed, but only on computer equipment
licensed to utilize Solaris operating system software, unless an additional
Developer’s License Agreement has been executed by Sun and Customer; Customer
is not licensed to develop printing applications or print, unless Customer has
secured a valid printing license; and Customer agrees to indemnify, hold
harmless and defend Sun from and against any claims or suits, including
attorneys’ fees, which arise or result from distribution or use of Developed
Programs.

 

3.        Restrictions.
Software is copyrighted and title to all copies is retained by Sun
and/or its licensors. Customer shall not make copies of Software, other than a
single copy of Software for archival purposes and, if applicable, Customer may,
for its internal use only, print the number of copies of on-line documentation
for which the applicable fee has been paid, in which event all proprietary
rights notices on Software shall be reproduced and applied. Except as
specifically authorized in Paragraph 2 above, Customer shall not modify,
decompile, disassemble, decrypt, extract, or otherwise reverse engineer
Software, except to the extent any of the foregoing limitations are
unenforceable under applicable law. Software is not designed or licensed for
use in on-line control equipment in hazardous environments such as operation of
nuclear facilities, aircraft navigation or control, or direct life support
machines.

 

4.        Confidentiality.
Software is confidential and proprietary information of Sun and/or its
licensors. Customer agrees to take adequate steps to protect Software from
unauthorized disclosure or use.

 

5.        Warranty.
Sun warrants that the media on which Software is furnished will be free of
defects in materials and workmanship under normal use for a period of ninety
(90) days from the date of purchase, as evidenced by a copy of the receipt.
Otherwise, Software is provided “AS IS,” without a warranty of any kind. This
warranty extends only to Customer as the original licensee. Customer’s
exclusive remedy and Sun’s entire liability under this warranty will be the
correction of defects in media or replacement of the media, or, if correction
or replacement is not reasonably achievable by Sun, the refund to Customer of
the license fee paid, upon return of Software.

 

6.        Disclaimer
of Warranty. EXCEPT AS SPECIFIED IN THIS LICENSE AGREEMENT, ALL
EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT, ARE HEREBY EXCLUDED TO THE EXTENT ALLOWED BY APPLICABLE LAW.

 

7.        Limitation
of Liability. IN NO EVENT WILL SUN BE LIABLE FOR ANY LOST REVENUE,
PROFIT OR DATA, OR FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE
DAMAGES HOWEVER CAUSED AND REGARDLESS OF THEORY OF LIABILITY ARISING OUT OF THE
USE OF OR INABILITY TO USE SOFTWARE, EVEN IF SUN HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. In no event shall Sun’s liability to Customer,
whether in contract, tort (including negligence), or otherwise, exceed the
license fee paid by Customer for Software. The foregoing limitations shall
apply even if the above stated warranty fails of its essential purpose.

 

8.        Termination.
This License is effective until terminated. Customer may terminate this License
at any time by destroying all copies of Software including any documentation.
This License will terminate immediately without notice from Sun if Customer
fails to comply with any provision of this License. Upon termination, Customer
must destroy all copies of Software.

 

9.        Export
Regulations. Software, including technical data, is subject to U.S.
export control laws, including the U.S. Export Administration Act and its
associated regulations, and may be subject to export or import regulations in
other countries. Customer agrees to comply strictly with all such regulations
and acknowledges that it has the responsibility to obtain licenses to export,
re-export, or import Software.

 

10.      U.S.
Government Restricted Rights. If Customer is acquiring Software
including accompanying documentation on behalf of the U.S. Government, the
following provisions apply. If Software is supplied to the Department of
Defense (“DOD”), Software is subject to “Restricted Rights”, as that term is
defined in the DOD Supplement to the Federal Acquisition Regulations (“DFAR”)
in paragraph 252.227-7013(c)(1). If Software is supplied to any unit or agency
of the United States Government other than DOD, the Government’s rights in
Software will be as defined in paragraph 52.227-19(c)(2) of the Federal
Acquisition Regulations (“FAR”). Use, duplication, reproduction, or disclosure
by the Government is subject to such restrictions or successor provisions.
Contractor/Manufacturer is: Sun Microsystems Computer Company, 2550 Garcia
Ave., Mountain View, CA 94043.

 

11.      Governing
Law. This Agreement is made under, shall be governed by and
construed in accordance with the laws of the State of California, U.S.A., excluding
its choice of law provisions.

 

12.      Integration.
This Agreement is the entire agreement between Customer and Sun relating to
Software and: (i) supersedes all prior or contemporaneous oral or written
communications, proposals and representations with respect to its subject
matter; and (ii) prevails over any conflicting or additional terms of any
quote, order, acknowledgement, or similar communication between the parties
during the term of this Agreement. No modification to this Agreement will be binding,
unless in writing and signed by a duly authorized representative of each party.

	
  *Solaris is  a registered trademark of Sun
  Microsystems, Inc.

  	
  Part
  No. 801-3229-10

  
	
  Sun
  Microsystems Inc.

  	
  Rev.A,
  May 1994

  

 

6

 

	
  

  	
  GENERAL TERMS

  	
   

  

 

GENERAL TERMS

 

	
   

  	
  Company Name: 

  	
   

  	
  Strategic Technologies, Inc. 

  
	
   

  	
  General Terms Reference No: 

  	
   

  	
  AR-72366

  

 

These Sun Terms and
Conditions (“General Terms”) are made as of 2/1/2003 (“Effective Date”) between
SUN MICROSYSTEMS, INC., a Delaware corporation with its address at 4150 Network
Circle, Santa Clara, CA 95054 and Strategic
Technologies, Inc.  with its address at 301 Gregson Drive, Cary, NC 27511.

 

1.        INTERPRETATION

 

1.1                   The purpose of
the General Terms is to create a single mechanism under which Strategic Technologies, Inc.  and its
Affiliated Companies (“Company”) may form purchasing or other Agreements with
Sun Microsystems, Inc. and its Affiliated Companies (“Sun”).

 

1.2                   In the General
Terms:

 

“Affiliated
Company” means, in relation to either party, any entity: (a) which is owned 50%
or more by that party; or (b) over which that party exercises management
control; or (c) which is under common control with that party; or (d) which
owns 50% or more of that party;

 

“Agreement”
means each agreement entered into under the General Terms, comprising the
General Terms and an Exhibit executed by Sun and Company referencing the
General Terms;

 

“Confidential
Information” means any information disclosed by one party to another under any
Agreement which is, prior to or at the time of disclosure, identified in
writing as confidential or proprietary;

 

“Equipment”
means the hardware (including components), software media and spare parts
listed in the standard product price lists published by Sun from time to time;

 

“Exhibit” means any exhibit to the General Terms as executed by the
parties from time to time;

 

“IPR”
means intellectual property rights, including patents, trademarks, design
rights, copyrights, database rights, trade secrets and all rights of an
equivalent nature anywhere in the world;

 

“Products” means Equipment or Software;

 

“Services” means the services described in any Service Listing or SOW;

 

“Service
Listing” means any offering in Sun’s Enterprise Services Service List, which is
located at http://www.sun.com/service/servicelist
(a hard copy of each of which will be made available to Company on
request), together with such other standard service offerings as the parties
may agree from time to time;

 

“SOW” means any
statement of work relating to Services;

 

“Software”
means (i) any binary software programs listed in the standard price lists
published by Sun from time to time, (ii) any Updates, and (iii) any related
user manuals or other documentation; 

 

“Sun
Trademarks” means all names, marks, logos, designs, trade dress and other brand
designations used by Sun in connection with Products and Services;

 

“Updates”
means subsequent releases and error corrections for Software previously
licensed, as listed in the standard price lists published by Sun from time to
time.

 

2.        CONFIDENTIAL INFORMATION

 

2.1                   A party
receiving Confidential Information (“the Recipient”) may use it only for the
purposes for which it was provided under the Agreement. Confidential
Information may be disclosed only:

 

(a)                     to employees
or contractors obligated to the Recipient under similar confidentiality
restrictions; and

 

(b)                    in relation solely to Agreements involving
software, services or other activities on the part of iPlanet E-Commerce
Solutions, to employees or contractors of Netscape Communications Corporation
and other Affiliated Companies of America Online, Inc.;

 

in
each case only for the purposes for which it was provided under the relevant
Agreement.

 

2.2                   The obligations of section 2.1 do not apply to
information which:

 

(a)                     is rightfully obtained by the Recipient without breach of any obligation to maintain
its confidentiality;

 

(b)                    is or becomes known to the public through no act or omission of the Recipient;

 

(c)                     the Recipient develops independently without using Confidential Information of the
other party; or

 

(d)                    is disclosed
in response to a valid court or governmental order, if the Recipient has given
the other party prior written notice and

 

1

 

provides
reasonable assistance so as to afford it the opportunity to object.

 

3.        RESTRICTED ACTIVITIES

 

3.1                   Export laws. Products,
Services and technical data delivered by Sun may be subject to US export
controls or the trade laws of other countries. Company will comply with all
such laws and obtain all licenses to export, re-export or import as may be
required after delivery to Company. Company will not export or re-export to
entities on the most current U.S. export exclusion lists or to any country
subject to U.S. embargo or terrorist controls as specified in the U.S. export
laws. Company will not use or provide Products, Services, or technical data for
nuclear, missile, or chemical biological weaponry end uses.

 

3.2                   Nuclear applications. Company acknowledges that Products and Services are not designed or
intended for use in the design, construction, operation or maintenance of any
nuclear facility.

 

4.        SUN TRADEMARKS

 

4.1                   Company may
refer to Products and Services by their associated names, provided that such
reference is not misleading and complies with Sun’s Trademark and Logo
Policies, which are found at http://www.sun.com/policies/trademarks.

 

4.2                   Company may not remove or alter any Sun Trademarks,
nor may it co-logo Products or Services. Company agrees that any use of Sun
Trademarks by Company will inure to the sole benefit of Sun.

 

4.3                   Company agrees not to incorporate any Sun Trademarks
into Company’s trademarks, service marks, company names, Internet addresses,
domain names, or any other similar designations.

 

5.        PUBLICITY

 

5.1                   Sun may use
Company’s name in promotional materials, including press releases,
presentations and customer references regarding the sale of Products or
Services. These permissions are free of charge for worldwide use in any medium.
Sun will obtain Company’s prior approval for publicity that contains claims,
quotes, endorsements or attributions by Company, such approval not to be
unreasonably withheld.

 

6.        INTELLECTUAL PROPERTY CLAIMS

 

6.1                   Each party (“the Indemnifying Party”) will
defend or settle, at its option and expense, any legal proceeding brought against the other (“the Indemnified
Party”) to the extent that it is based on a claim that materials (which term
includes Products) developed and provided by the Indemnifying Party infringe a
third party’s patent, trade secret or copyright. The Indemnifying Party will
indemnify the Indemnified Party against all damages and costs attributable
exclusively to such claim awarded by the court finally determining the case,
provided that the Indemnified Party:

 

(a)                     gives written notice of the claim promptly to the
Indemnifying Party;

 

(b)                    gives the Indemnifying Party sole control of
the defense and settlement of the claim;

 

(c)                     provides to the Indemnifying Party, at the
expense of the Indemnifying Party, all available information and assistance;

 

(d)                    does not compromise or settle such claim; and

 

(e)                     Is not in material breach of any Agreement.

 

6.2                   If such materials are found to infringe, or in the reasonable opinion of the
Indemnifying Party are likely to be the subject of a claim, the Indemnifying
Party will at its option:

 

(a)                     obtain for the Indemnified Party the right to
use such materials;

 

(b)                    replace or modify the materials so they become
non-infringing; or

 

(c)                     if neither (a) nor (b) is reasonably
achievable, remove such materials and refund their net book value.

 

6.3                   Neither party has any obligation to the extent any
claim results from:

 

(a)                     use of materials in combination with any third
party equipment, software or data;

 

(b)                    compliance by the Indemnifying Party with the
designs or specifications of the Indemnified Party;

 

(c)                     modification of materials other than at the
direction of the Indemnifying Party; or

 

(d)                    use of an allegedly infringing version of the
materials, if the alleged infringement could have been avoided by the use of a
different version made available to the Indemnified Party.

 

6.4                   This section states the entire liability of each
party (as Indemnifying Party) and the exclusive remedies of each party (as
Indemnified Party) for claims that materials infringe a third party’s IPR.

 

7.        LIMITATION OF LIABILITY

 

7.1                   No limitation on certain categories of
liability. Each party
acknowledges the full extent of its own liability to the other, arising from:

 

(a)                     death or  personal
injury resulting from negligent acts or omissions;

 

(b)                    breach of any applicable license grant; or

 

(c)                     claims for non payment;

 

and the non-excludable
statutory rights of consumers (for example, under laws providing for strict
product liability) are not affected.

 

7.2                   Limitations on other categories of liability. Subject to 7.1 above and to the extent not
prohibited by applicable law:

 

(a)                     each party’s maximum aggregate liability for all
claims relating to any Agreement, whether for breach of contract, breach of warranty
or

 

2

 

in tort, including
negligence, will be limited to two million US dollars (U.S. $2,000,000) or, in
the case of purchases, to the amount paid to the other party during the
previous twelve (12) months for the product or service which is the subject
matter of the claim up to a maximum of two million US dollars ($2,000,000); and

 

(b)                    neither party
will be liable for any indirect, punitive, special, incidental or consequential
damages in connection with or arising out of the General Terms or any Agreement
(including, without limitation, loss of business, revenue, profits, goodwill,
use, data, electronically transmitted orders, or other economic advantage),
however they arise, whether in breach of contract, breach of warranty or in
tort, including negligence, and even if that party has previously been advised
of the possibility of such damages.

 

7.3                   Failure of essential purpose. Liability for
damages will be limited and excluded, even if any exclusive remedy provided for
in the Agreement fails of its essential purpose.

 

8.                         TERMINATION
AND EXPIRATION

 

8.1                   Termination for cause. Either party may
terminate the General Terms or any Exhibit immediately by written notice:

 

(a)                     if the other
party commits a non-remediable material breach of the General Terms or Exhibit
(as the case may be); or

 

(b)                    if the other
party fails to cure any remediable material breach within thirty (30) days of
being notified in writing of such breach.

 

8.2                   Termination without cause.

 

(a)                     Either party
may terminate the General Terms immediately by written notice if no Exhibit is
in effect.

 

(b)                    Either party
may terminate any Exhibit at any time upon expiration of ninety (90) days’
written notice.

 

8.3                   Actions following termination or expiration. On
termination or expiration of the General Terms (for whatever reason), all
Exhibits shall automatically terminate with immediate effect. Following
termination or expiration of an Exhibit (for whatever reason), each party will
deliver to the other any property of the other in its possession or control
relating to that Exhibit, in good condition, reasonable wear and tear excepted.

 

8.4                   Effect of termination. Neither party will
be liable for any damages arising out of the termination or expiration of the
General Terms or any Exhibit, provided that such termination or expiration will
not affect any right to recover:

 

(a)                     damages
sustained by reason of material breach; or

 

(b)                    any payments
which may be owing in respect of any Agreement.

 

9.                         ASSIGNMENT
AND SUBCONTRACTING

 

9.1                   Neither party
may assign or otherwise transfer any of its rights or obligations under the
General Terms or any Exhibit without the prior written consent of the other
party, which consent will not be unreasonably withheld, except that:

 

(a)                     both parties
may assign their right to receive payment; and

 

(b)                    Sun may use
subcontractors in the performance of its obligations, in which case Sun will
remain responsible for the performance by such sub-contractors.

 

10.                  DISPUTE
RESOLUTION

 

The parties will use
reasonable efforts to resolve any dispute arising out of the General Terms or
any Exhibit through a meeting of appropriate managers from each party. If the
parties are unable to resolve the dispute, either party may escalate the
dispute to its executives. If an executive level meeting fails to resolve the
dispute within thirty (30) days after escalation, either party may seek any
available legal relief. This provision will not affect either party’s right to
seek injunctive or other provisional relief at any time.

 

11.                  GENERAL

 

11.1             Governing law.

 

(a)                     All disputes
will be governed by the laws of California. The venue for litigation will be
the appropriate courts located in Santa Clara County, California.

 

(b)                    Choice of law
rules of any jurisdiction and the United Nations Convention on Contracts for
the International Sale of Goods will not apply to any dispute under the
Agreement.

 

11.2             Force majeure. A party is not liable under
any Agreement for non-performance caused by events or conditions beyond that
party’s reasonable control, if the party makes reasonable efforts to perform.
This provision does not relieve either party of its obligation to make payments
then owing.

 

11.3             Notices. All written notices required by
the General Terms or any Exhibit must be delivered in person or by means
evidenced by a delivery receipt or acknowledgment and will be effective upon
receipt. Notices communicated by electronic mail or facsimile will be deemed to
be written.

 

11.4             Relationship. Neither the General Terms nor
any Agreement is intended to create a partnership, franchise, joint venture,
agency, or a fiduciary or employment relationship. Neither party may bind the
other party or act in a manner which expresses or implies a relationship other
than that of independent contractor.

 

11.5             Invalidity. If any provision of the General
Terms or any Agreement is held invalid by any law or

 

3

 

regulation of any
government or by any court or arbitrator, such invalidity will not affect the
enforceability of other provisions.

 

11.6             Survival. Rights and obligations under the
General Terms and any Exhibit which by their nature should survive, will remain
in effect after termination or expiration of the General Terms or the relevant
Exhibit.

 

11.7             No waiver. Any express waiver or failure to
exercise promptly any right under the General Terms or any Exhibit will not
create a continuing waiver or any expectation of non-enforcement.

 

11.8             Modification. No modification to the
General Terms or any Exhibit will be binding, unless in writing and manually
signed by an authorized representative of each party.

 

11.9             Entire agreement. Each Agreement
constitutes the parties’ entire agreement relating to its subject matter. It
cancels and supersedes all prior or contemporaneous oral or written
communications, proposals, conditions, representations and warranties and
prevails over any conflicting or additional terms contained in any quote,
purchase order, acknowledgment, or other communication between the parties
relating to its subject matter during its term.

 

IN
WITNESS WHEREOF THE DULY AUTHORISED REPRESENTATIVES OF THE PARTIES HAVE
EXECUTED THESE GENERAL TERMS AS OF THE EFFECTIVE DATE.

 

	
   

  	
  SUN MICROSYSTEMS, INC.

  	
   

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ G. Grimes

  	
   

  	
  BY:

  	
  /s/ Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NAME:

  	
  G. Grimes

  	
   

  	
  NAME:

  	
  Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
  VP PMA

  	
   

  	
  TITLE:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  2/24/03

  	
   

  	
  DATE:

  	
  Dec. 13, 2002

  

 

4

 

 

iFORCE BUSINESS TERMS EXHIBIT

 

iFORCE BUSINESS TERMS EXHIBIT

 

	
  Company Name:

  	
   

  	
  Strategic Technologies, Inc.

  
	
   

  	
   

  	
   

  
	
  General Terms Reference No:

  	
   

  	
  AR-72366

  
	
   

  	
   

  	
   

  
	
  Exhibit Reference No: 

  	
   

  	
   

  

 

THIS EXHIBIT is an
Exhibit to the Sun General Terms and Conditions (“General Terms”) referenced
above, and is effective as of 2/1/2003 (“Exhibit Effective Date”).

 

The General Terms and the
Guide (as defined below) are integral parts of this Exhibit and are
incorporated by reference. The General Terms, the Guide and this Exhibit are
together referred to as the “Agreement”.

 

As specified and only to
the extent expressly permitted in the Agreement, Company is authorized to (i)
purchase certain Products from Sun or a Sun authorized channel partner, and
(ii) distribute such Products to End Purchasers or Sun authorized channel
partners.

 

1.        INTERPRETATION

 

1.1                   In this
Exhibit:

 

“Accreditation” means
certification by Sun that Company meets the Criteria;

 

“Accepted Order” has the
meaning stated in section 3.1;

 

“Appendix”
means any Appendix to this Exhibit;

 

“Criteria”
means the selection criteria applicable to Company’s Partner Type(s), as set
out in the Guide;

 

“Deliverable”
means in relation to any Services, the specific items to be delivered to
Company or End Purchaser in connection with the applicable Service Listing or
SOW;

 

“the
End Purchaser” means any party to whom Company markets or sells Products or
Services for internal use (and not for resale, marketing or leasing);

 

“Exhibit”
means this Exhibit, including any Appendices and Schedules;

 

“the
Guide” means the program guide(s) applicable to Company’s Partner Type(s), as
modified by Sun from time to time;

 

“the
Guide Obligations” means the Sun policies and procedures, and the ongoing
obligations applicable to Company’s Partner Type(s), as set out in the Guide;

 

“Order”
means an order for Products or Services, 
which may be submitted by Company to Sun in hard copy form (“Purchase
Order”) or in electronic form (“Electronic Order”);

 

“Order
Confirmation” means a written or electronic acknowledgment or invoice issued by
Sun in response to an Order;

 

“POS
Information” means the point of sale or other information required by Sun and
detailed in the Guide;

 

“Price
List” means, in relation to any Order, as determined by reference to section
4.1 of this Exhibit;

 

“Schedule”
means any Schedule to this Exhibit.

 

1.2                   Capitalized
terms used but not defined in this Exhibit have the meanings set out in the
General Terms and the Guide.

 

1.3                   In the event of
any inconsistency between the elements of the Agreement, the following order of
precedence will apply (in descending order):

 

(a) the Schedules;

 

(b) the Appendices;

 

(c) the main text of this
Exhibit;

 

(d) the General Terms;

 

(e) the applicable Price
List, Service Listing or SOW;

 

(f) the Guide;

 

(g) the Order
Confirmation;

 

(h) the Order.

 

2.        APPOINTMENT

 

2.1         Subject to the terms of
the Agreement, Sun hereby appoints Company (but not any Affiliated Company,
unless such Affiliated Company has satisfied Sun’s Accreditation requirements
and explicitly agrees to be bound by the terms of this Agreement) on a
non-exclusive basis, to act in the capacity of such Partner Types, in such
territories and for such term as are specified in the Schedule, for so long as
it continues to meet the applicable Criteria.

 

1

 

2.2                   The rights and
responsibilities applicable to each Partner Type are more particularly
described in the Guide. Sun may add to or modify the Guide at its sole
discretion on a non-discriminatory basis and the additional or modified rights
and obligations shall come into effect sixty (60) days after Company receives
notice of such changes.

 

3.        ORDERING

 

3.1                   Ordering
procedure

 

(a)       Company may order Products or Services
by:

 

(i)                       submitting
an Electronic Order in the manner directed by Sun; or

 

(ii)                    submitting a
Purchase Order to Sun (and Company acknowledges that Electronic Orders for
certain Products or Services may need to be supplemented by a Purchase Order);

 

in each case specifying
the Products or Services ordered and referencing the General Terms and
applicable Letter of Authorization numbers. By doing so, Company agrees that
the Order is governed by the Agreement.

 

(b)       Sun may accept the Order by:

 

(i)                       issuing an
Order Confirmation to Company; or

 

(ii)                    shipping
Products or initiating performance of Services pursuant to the Order.

 

(c)                     The
identification of the Products or Services in the Order and any Order
Confirmation, together with any applicable Service Listings or SOWs and the
Agreement, will constitute an “Accepted Order” and create a binding commitment
for the purchase of those Products or Services.

 

4.        PRICING AND PAYMENT TERMS

 

4.1                   Applicable
Price List. The Price List applicable to an Order under this Exhibit
depends on the Products or Services ordered and on the country of delivery of
Services or installation of Products (“the Destination Country”). Unless
otherwise specified in the Schedule, the Price List is:

 

(a)       The
Sun country Price List in effect in the country in which the Order is accepted
if:

 

(i)                       both the
Destination Country and such country accepting the Order are within the
European Economic Area, or

 

(ii)                    all sales under this Exhibit are related to a
single country (i.e., the country accepting the order and the Destination
Country are always the same country); else

 

(b)                    The Sun
international Price List in effect in the Destination Country; provided that
the Sun country Price List in effect in the Destination Country for the
relevant Products or Services will apply if such international Price List does
not list the relevant Products or Services.

 

4.2       Pricing
and payment arrangements.

 

(a)                     For Products
or Services which are discountable in the applicable Price List, Sun agrees
(subject to section 4.3) to grant Company the discounts set out in the Schedule
or the Guide.

 

(b)                    All payments
will be made in the currency of the applicable Price List (or as otherwise
agreed in writing).

 

(c)                     Software
license fees are not contingent upon nor dependent on any further deliverables
from Sun, including but not limited to, professional services.

 

(d)                    Where Company
has appropriate credit arrangements with Sun, Company shall pay all invoices
within thirty (30) days of the date of the invoice or, in case of Products,
delivery (whichever is the later). In all other cases, Company shall pay cash
in advance of shipment or performance.

 

(e)                     Company is
not required to pay the disputed portion of any invoice, pending resolution of
that dispute, if written notice of the dispute has been provided to Sun within
fifteen (15) days of receipt of the invoice.

 

4.3                   Review of
discounts. Sun has the right to modify Price Lists and Discounts from time
to time; such modifications taking effect on the dates identified to Company.
Company will reimburse Sun for discounts extended to Company that are based on
volume, term of service or other criteria not earned by Company.

 

5.        COMPANY OBLIGATIONS

 

5.1                   Conformity to Criteria and Guide Obligations.  Company will comply at its own expense
with the applicable Criteria and the Guide Obligations for so long as this
Agreement remains in force.

 

5.2       POS
Information. Company warrants:

 

(a)                     that all POS
Information it provides will be obtained in accordance with the procedures set
out in the Guide;

 

(b)                    that Company
has notified the End Purchaser of Sun’s intended use of POS Information (as
stated in the Guide) and obtained all necessary consents to such use.

 

5.3       Policies and Procedures/Fair Representation.
Company will:

 

(a)                     represent Sun
fairly and will make no representations or guarantees concerning Sun, Company’s
relationship with Sun, or Sun’s Products or Services, that are false,
misleading, or inconsistent with those representations set out in the
Agreement, promotional materials, literature, manuals and Price Lists published
and supplied by Sun from time to time;

 

(b)                    comply with
all applicable laws and

 

2

 

regulations
in performing its obligations under this Agreement, including, without
limitation, all applicable data privacy laws and regulations;

 

(c)                     comply with the U.S. Foreign Corrupt Practices
Act and other laws implementing the Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, and Company warrants
that neither it nor any person representing it will make, offer, promise or
authorize, directly or indirectly, any payment or transfer of anything of value
to an official, representative, or employee of any governmental agency or
instrumentality, any political party or candidate for public office, or make
any payment to anyone who Company knows or should know will make a payment to
any of the foregoing, in order to promote or retain business or assist Company
in performing its obligations and/or providing information to Sun under this
Exhibit.

 

5.4                   Indemnity. Company agrees to indemnify and
hold Sun, its employees and agents harmless from and against all claims from
End Purchasers and other third parties arising out of any acts and/or omissions
of Company and its employees or agents. Company shall carry liability insurance
at a sufficient level to protect Sun, its employees and agents from all such
claims naming Sun as additional insured.

 

5.5                   Manuals, Tools and Information. Should Sun
make manuals and documentation (collectively “Materials”) or tools and
information (collectively “Tools”) available to Company, then such Tools and
Materials may be used only for the purposes of and in accordance with this
Agreement (including, without limitation, the following terms):

 

(a)       All Tools and Materials are supplied “AS
IS” and Sun disclaims all warranties.

 

(b)                   All Tools and Materials are proprietary to Sun
and, as between Company and Sun, Sun is the sole owner of all right, title and
interest, including copyrights or other intellectual property rights, in and to
any and all ideas, concepts, expertise, programs, systems, methodologies, data
or other materials embodied in, underlying or reduced to practice in such Tools
and Materials along with any enhancements, modifications or improvements
thereto.

 

(c)                    Company will not make copies of Tools or
Materials, except as expressly authorized by Sun, and will return or destroy
all Tools and Materials in its possession within thirty (30) days of the
termination of this Exhibit or as otherwise requested by Sun.

 

(d)                    Company is
prohibited from (i) developing any materials which incorporate portions of the Tools
or Materials; and (ii) from modifying the Tools or Materials.

 

(e)                    Tools and Materials are confidential to Sun
and its licensors and the confidentiality provisions of the Agreement shall
apply to the Tools and Materials.

 

(f)                      Company shall promptly advise Sun in writing
of any misappropriation or misuse of the Tools or Materials of which Company
becomes aware.

 

5.6                   Electronic ordering and services. For the
purposes of placing Electronic Orders and using electronic Tools and services,
Company represents and warrants that:

 

(a)                     it will keep confidential any unique user
identification and password that Sun assigns to Company; and

 

(b)                   all  of
Company’s employees or agents who submit orders or use Tools or services are
authorized by Company to do so.

 

5.7                   Failure to comply with Company obligations.
Without limiting the materiality of other breaches of this Agreement, failure
to comply with any of the obligations in section 5 will constitute a material
breach of this Agreement.

 

6.        IPR
OWNERSHIP AND LICENSING

 

6.1       Pre-existing IPR. Each party shall retain
its own pre-existing IPR.

 

6.2       License terms.

 

(a)                     General scope of licenses. Sun agrees to
grant to Company a license to use Software and Deliverables to the extent
permitted in the Appendices.

 

(b)                    Audit rights. Sun or its independent audit
firm may, upon reasonable notice, examine and audit the records and systems of
Company to ensure compliance with any license granted by Sun. Any audit will be
performed during Company’s regular business hours and in a manner which avoids
unreasonable interference with Company’s business operations.

 

(c)                     Injunctive relief. Company acknowledges
that any breach or threatened breach of any license involving unauthorized use
of Sun’s intellectual property will result in irreparable harm to Sun for which
damages would not be an adequate remedy.

 

(d)                    Proprietary rights notices. Company may not
alter or obscure any proprietary rights notice appearing on any Sun-supplied
materials, and must include such notices on any copies.

 

7.        EXPORT LAWS

 

7.1       Terminology.
In this section:

 

(a)       “Export
Exclusion List” includes but is not limited to the United States Treasury

 

3

 

Department’s
Specially Designated Nationals List and the United States Commerce Department’s
Entity and Denied Persons Lists, in all cases as the same may be updated from
time to time, and including any equivalent or replacement lists;

 

(b)                    “Export Laws”
means (i) all applicable U.S. export controls including but not limited to the
United States Export Administration Act and Regulations (15 CFR Parts 730-774; http://www.bxa.doc.gov) and Foreign Assets
Control Regulations (http://www.treas.gov/ofac/index.html)
and (ii) local import/export controls, in all cases as the same may
be updated from time to time, and including any equivalent or replacement
controls; and

 

(c)                     “Export
Licenses” means export, re-export, or import authorizations from the United
States or other governments.

 

7.2                   Compliance with Export Laws. Products and Services are
subject to Export Laws. Company shall comply strictly with all such laws, and
in particular:

 

(a)                     shall obtain any Export Licenses for Products
and Services after delivery by Sun as may be required by the Export Laws;

 

(b)                    shall not
market, sell or otherwise provide Products or Services to any person whom it
knows or has reason to know is involved in the design, development, production
or use of missiles, chemical/biological, nuclear or other weapons of mass
destruction;

 

(c)                     shall not transfer, export or re-export
Products and Services to any entity identified on the most current U.S.
government Export Exclusion Lists, or to any country subject to U.S. embargo or
terrorist controls as identified in the U.S. Export Laws; and

 

(d)       shall
provide end use and End Purchaser information upon Sun’s request.

 

7.3                   Export compliance audits. Sun may audit and request copies of Company’s
order records to ensure compliance with Export Laws, and Company shall
implement any corrective action recommended by Sun as a result of such audit
findings.

 

7.4       Notification
requirements. The following provisions apply where the Guide so
requires:

 

(a)                     Company acknowledges that U.S. export controls
limit the computational performance level of computers that may be transferred,
exported, or reexported to certain countries unless authorized by the U.S.
government. Company agrees that it will not use Sun product to manufacture,
develop, enhance, or upgrade computers that exceed the performance limits as
specified in the most current U.S. Export Laws.

 

(b)                    Company shall include the following notice on
packing lists, commercial invoices, shipping documents and other documents
involved in the transfer, export or re-export of Sun products: “These
commodities, technology or software were exported from the United States in
accordance with the Export Administration Regulations.”

 

8.        WARRANTY

 

8.1                   Warranties. Company represents that when it resells
Products or Services ordered under this Agreement, it will notify End
Purchasers that they will receive the benefit of a warranty in equivalent terms
to the applicable warranty set out in the respective Appendix.

 

8.2                   NO IMPLIED WARRANTIES. EXCEPT AS SPECIFIED IN THIS EXHIBIT, ALL EXPRESS
OR IMPLIED CONDITIONS, REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTY OR CONDITION OF MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT, ARE HEREBY EXCLUDED TO THE MAXIMUM
EXTENT PERMITTED BY LAW

 

9.        TERMINATION

 

9.1                   Termination of Exhibit. For the avoidance of doubt, the termination
provisions set out in the General Terms shall apply to this Exhibit

 

9.2       Additional provisions relating to
termination under this Exhibit.

 

(a)                     Either party
may terminate an Accepted Order immediately by written notice: (i) if the other
party commits a non-remediable material breach of such Accepted Order; or (ii)
if the other party fails to cure any remediable material breach within thirty
(30) days of being notified in writing of such breach.

 

(b)                    This Agreement
will terminate automatically if Company ceases to do business in the normal
course, becomes or is declared insolvent or bankrupt, is the subject of any
proceeding relating to the liquidation or insolvency of Company which is not
dismissed within ninety (90) days or makes an assignment for the benefit of its
creditors.

 

(c)                     Sun may
terminate this Agreement immediately by written notice if Company undergoes any
change in ownership or control (whether by way of voting or contract rights or
otherwise) or in its business, which change Sun considers material, in the
light of the fact that Company has been appointed by Sun because of its present
financial, technical and managerial conditions.

 

4

 

(d)                    Sun may
terminate Company’s authorization to act as a given Partner Type, or to do so
in a given location, immediately by written notice (i) if Company fails to meet
the applicable Criteria and Guide Obligations to a material degree, or (ii) if
Company fails to meet the applicable Criteria and Guide Obligations to a
non-material degree and fails to cure such failure within thirty (30) days of
being notified in writing of the requirement to do so.

 

9.3                   Post-termination actions. The following
provisions apply to this Exhibit generally (in the event of termination in its
totality) and to the Company’s activities in particular locations only (in the
event of termination of Company’s authorization to act in a given location).
Upon termination:

 

(a)                     Company will
immediately cease and desist from marketing or distributing Products and
Services under authority from Sun, and will (i) return or, if agreed to by Sun,
destroy all tools, materials and other Sun property provided to Company, at
Company’s expense, within thirty (30) days, (ii) immediately pay all amounts
due and owing, and (iii) promptly notify Sun of the Products in Company’s
inventory, as well as the net invoice price and an estimate of the then fair
market value of such inventory;

 

(b)                    Sun will have
the right of first refusal to repurchase Products in Company’s inventory at the
lower of net invoice price or the then fair market value, as may be adjusted
for any amounts due but unpaid pursuant to section 9.3(a)(ii). Sun may exercise
this right by providing Company with written notice of its election to do so
within fifteen (15) days following the date that Company complies with section
9.3(a)(iii). Except where termination is by Sun for breach, and subject to the
terms and obligations of this Agreement, during the ninety (90) day period
following termination, Company may sell and/or license under the terms of this
Exhibit any products that Sun does not elect to repurchase.

 

(c)                     Sun will have
the right to cancel by written notice all or part of any unfulfilled Order
previously accepted by Sun. To the extent that Sun does not cancel any such
Order, the terms of this Agreement shall apply to it.

 

10.      USE OF SUN TRADEMARKS AND LOGOS

 

10.1             Sun Trademark Rights. Company agrees that as
between Company and Sun, Sun is the sole owner of all right, title and interest
in and to the Sun Trademarks and all associated goodwill. Company is granted no
right, title or license to, or interest in, any Sun Trademark. Company agrees
not to challenge Sun’s ownership or use, or the validity, of the Sun
Trademarks, or attempt to adopt or register any mark identical or confusingly
similar to any of the Sun Trademarks. Should Company acquire (by operation of
law or otherwise) any rights in any Sun Trademark, it shall immediately at no
expense to Sun assign to Sun all such rights and associated goodwill,
applications and registrations. Company will cooperate with Sun and take all
reasonable actions required to assist Sun to secure, protect and maintain ownership
rights in the Sun Trademarks worldwide, at Sun’s cost, including giving prompt
notice to Sun of any potential infringement thereof and cooperating with Sun in
the preparation, execution and recording of legal documents necessary to
register or otherwise protect the Sun Trademarks.

 

10.2             Logo Usage. Sun grants to Company a
limited, non-exclusive, non-transferable, royalty-free, worldwide permission to
use an applicable Sun logo (the “Logo”), if any, to refer or relate to Sun’s
program for Company’s Partner Type(s) and only:

 

(a)                     in the exact
form provided by Sun;

 

(b)                    in pre-sale
advertising and marketing materials that prominently display Company’s own
corporate name and logo, but not on product, packaging, documentation, shipping
containers, or other materials distributed with Products or the rendering of
Services;

 

(c)                     on Company’s
web site, as a link to the Sun Microsystems home page (www.sun.com)  or to an Internet URL to be provided by Sun’s iForce
program manager;

 

(d)                    in a manner
less prominent than Company’s own corporate name and logo;

 

(e)                     in accordance
with the Sun Trademark & Logo Usage Requirements and with any graphics
standards distributed by Sun;

 

(f)                       in a manner
that is truthful and not misleading, and that does not use the Logo to imply
any relationship with, or endorsement or sponsorship by, Sun that is not true;

 

(g)                    in a manner
that avoids disparaging statements or implications about Sun or its products or
services;

 

(h)                    on materials
that are in compliance with all applicable laws and governmental regulations;
and

 

(i)                        with the
following trademark legend on the page where the Logo appears (unless Company
is required to use a more specific legend by any other agreement Company may
have with Sun): “Sun, Sun Microsystems, the Sun logo and iForce are trademarks
or registered trademarks of Sun

 

5

 

Microsystems, Inc. in the
U.S. and other countries and are used with permission. Company and its
products/services are independent of Sun Microsystems, Inc.”

 

This grant does not
extend to Company’s subsidiaries, affiliates, suppliers, distributors, dealers,
agents, customers, or other third-party entities. Company shall promptly modify
any use of the Logo that does not comply with this Agreement upon notice from
Sun specifying the non-compliance, which noncompliance shall be determined in
Sun’s discretion. Sun may change the Logo, or create new logos to replace the
Logo currently in use. Upon reasonable notice from Sun, Company shall promptly
modify its use of the Logo to conform to any such changed or new logo.

 

10.3              Injunctive Relief. Company agrees that a
material breach of the obligations in this section 10 is likely to cause
irreparable harm to Sun for which damages would not be an adequate remedy.
Therefore, in addition to its rights and remedies otherwise available at law,
including, without limitation, the recovery of damages for breach of this
Agreement, Sun shall be entitled to: (a) immediate equitable relief,
specifically including, but not limited to, both interim and permanent
restraining orders and injunctions; and (b) to such other and further equitable
relief as the court may deem proper under the circumstances.

 

IN WITNESS WHEREOF THE
DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE EXECUTED THIS IFORCE
EXHIBIT AS OF THE EXHIBIT EFFECTIVE DATE.

 

	
  SUN MICROSYSTEMS, INC.

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
  BY: 

  	
  /s/ G. Grimes

  	
   

  	
  BY: 

  	
  /s/ Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NAME: 

  	
  G. Grimes

  	
   

  	
  NAME: 

  	
  Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE: 

  	
  VP PMA

  	
   

  	
  TITLE: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE: 

  	
  2/24/03

  	
   

  	
  DATE: 

  	
  Dec, 13, 2002

  

 

6

 

Appendix 1 to the iForce
Business Terms Exhibit 

Additional provisions relating to Products

 

	
  Company Name:

  	
   

  	
  Strategic
  Technologies. Inc.

  
	
  General Terms Reference No:

  	
   

  	
   

  
	
  Exhibit Reference No:

  	
   

  	
   

  
	
  Appendix Reference No:

  	
   

  	
   

  

 

1.        DELIVERY ARRANGEMENTS FOR PRODUCTS

 

1.1                   Target delivery
dates. In relation to Products, Sun will use reasonable efforts to meet the
delivery dates stated on its Order Confirmation.

 

1.2                   Changing delivery arrangements.

 

(a)                     Sun may make
Product substitutions and modifications that do not cause a material adverse
affect in overall Product performance;

 

(b)                    Subject to
Company’s agreement, Sun may make and invoice for partial deliveries; and

 

(c)                     Company may,
when purchasing direct from Sun, re-schedule or re-configure all or part of an
Order in accordance with the applicable provisions of the Guide.

 

1.3                   Title and risk. Unless otherwise specified
in a Schedule or otherwise agreed by Sun in writing, Title to Equipment and
risk of loss of or damage to Products will pass from Sun upon delivery, which
will be made in accordance with Incoterms 2000, as specified in Sun’s price
list and then current delivery terms table located at http://www.sun.com/sales/delivery-terms/index.html,  and
Products will be deemed accepted upon such delivery. In the United States, the
relevant Incoterm is Ex Works Sun’s Product Delivery Center.

 

2.        CHARGING ARRANGEMENTS FOR PRODUCTS

 

2.1                   Charges and Invoices. The charges for
Products are as set out in the Price List.

 

2.2                   Taxes and expenses. The stated charges for
Products are exclusive of all sales and other taxes based upon the value of the
Products. Company is responsible for payment of all such taxes.

 

3.                         LICENSE
TERMS FOR SOFTWARE PRODUCTS

 

3.1                   License grant. Sun grants to Company a non
exclusive and non-transferable license to use Software provided to Company
hereunder for its internal use only, subject to:

 

(a)                     any
restrictions set out in the Order or Order Confirmation as to the permitted
number of users and CPUs; and

 

(b)                    any
supplemental license terms accompanying the Software.

 

3.2                   Permission to distribute. To the extent of
its authorization as set out in the Schedule, and subject to payment of the
applicable fee, Sun grants Company a non-exclusive and non-transferable license
to distribute Software to End Purchasers in the territory to which such
authorization applies, as part of the sale of the hardware system on which
Company obtained the Software. Company shall require each of its End Purchaser
licensees to enter into a license agreement that is consistent with the rights
and obligations in this section, and that incorporates in substance, and is no
less protective of Sun than, the terms and conditions of the Sun binary code license
provided with the Software. Company shall keep records identifying each
licensed End Purchaser and the capacity of the license granted.

 

3.3                   Reservation of rights. Software is
confidential and copyrighted, all rights therein not expressly granted to Company
are reserved to Sun, and Sun retains title to all copies.

 

3.4                   License restrictions. Except to the extent
permitted by applicable law, Company may not make copies of Software, other
than for archival purposes, or modify, decompile, or reverse-engineer Software.

 

3.5                   Commercial software notice. If Software is
being acquired by or on behalf of the U.S. Government or by a U.S. Government
prime contractor or subcontractor (at any tier), then the Government’s rights
in Software and accompanying documentation are only as set out in this
Agreement; this is in accordance with 48 CFR 227.7201 through 227.7202-4 (for
Department of Defense (DoD) acquisitions) and with 48 CFR 2.101 and 12.212 (for
non-DoD acquisitions).

 

4.                         PRODUCT
WARRANTIES

 

4.1                   Warranty. Sun warrants that all Equipment
as at the date of delivery will be free from material defects in materials and
workmanship for the period shown on the web-page at http://www.sun.com/service/support/warranty (“the Warranty
Web Page”) (a hard copy of which is available on request). Sun furthermore
warrants that Software listed on the Warranty Web Page as at the date of
delivery, for the

 

7

 

period shown on the
Warranty Web Page, will contain the features described in the applicable users
manual, as it exists at the date of delivery to Company. Otherwise Software is
provided “AS IS”.

 

4.2                   Changes to Warranty Web Page. Any changes
to the warranty details specified on the Warranty Web Page from time to time
will not apply to Products ordered prior to such change.

 

4.3                   Exclusive remedy. Company’s sole and
exclusive remedy and Sun’s entire liability for breach of the above warranty
will be (a) the repair or, at Sun’s option and expense, replacement of
defective Equipment; and (b) the provision of Software support as shown on the
Warranty Web Page. Parts or components which are replaced under applicable
warranty may be new or like-new. Title in all defective parts which are removed
from Equipment under applicable warranty shall transfer back to Sun.

 

4.4                   Products excluded from warranty. No
warranty will apply to any Product which has been:

 

(a)                     modified,
altered or adapted without Sun’s written consent;

 

(b)                    maltreated or
used in a manner other than in accordance with the relevant manual;

 

(c)                     installed or
repaired by any third party in a manner which fails to meet Sun’s quality
standards;

 

(d)                    used with
equipment or software not covered by the warranty, to the extent that the
problems are attributable to such use; or

 

(e)                     sold to or
procured by Company from any entity not authorized by Sun to distribute
Products to Company, where such exclusion is permitted under applicable local
law.

 

5.        REPORTING REQUIREMENTS FOR INTERNATIONAL TRANSACTIONS

 

5.1                   Company will
report all Product exports and re-exports by providing a monthly report to Sun
by the 15th day of each month with (i) the name of the buying office
of Company, (ii) the name of the Sun selling office, (iii) Product type, (iv)
serial number(s), (v) new country of installation and (vi) date of export for
each Product exported from the original country of installation. A sample
monthly report is available from Sun on request.

 

IN WITNESS WHEREOF THE
DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE EXECUTED THIS IFORCE EXHIBIT
AS OF THE APPENDIX EFFECTIVE DATE.

 

	
   

  	
  SUN MICROSYSTEMS, INC.

  	
   

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ G. Grimes

  	
   

  	
  BY:

  	
  /s/ Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NAME:

  	
  G. Grimes

  	
   

  	
  NAME:

  	
  Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
  VP PMA

  	
   

  	
  TITLE:

  	
  VICE PRESIDENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  2/24/03

  	
   

  	
  DATE:

  	
  Dec. 13, 2002

  

 

8

 

Appendix 2 to the IForce
Business Terms Exhibit

Additional provisions relating to Services

 

	
  Company Name: 

  	
   

  	
  Strategic
  Technologies Inc.

  
	
  General Terms Reference
  No:

  	
   

  	
  AR -72366

  
	
  Exhibit Reference No:

  	
   

  	
   

  
	
  Appendix
  Reference No:

  	
   

  	
   

  

 

1.        DEFINITIONS

 

In this Appendix:

 

“Covered Systems”
means the systems indicated on the relevant Order Confirmation;

 

2.        SUN’S OBLIGATIONS

 

2.1                   Exclusions from
Services. Sun’s obligation to provide Services under this Exhibit is
subject to Company’s fulfillment of its obligations set out in the Guide, and
contingent upon proper use and care of Covered Systems. Sun has no obligation
to provide support services that are required because of:

 

(a)                     improper use,
abuse, accident, or neglect;

 

(b)                    alterations,
modifications, or attempts to repair systems not authorized by Sun;

 

(c)                     alterations
or modifications of Software code;

 

(d)                    use of
Software with products or equipment not on the applicable Price List or
approved by Sun in writing;

 

(e)                     failure to
maintain Software or systems at the Sun specified minimum release level or
configuration necessary to effectuate problem fixes or keep a system within the
terms of Sun’s end of life support;

 

(f)                       causes
external to the system, such as failure to maintain environmental conditions
within the operating range specified by Sun;

 

(g)                    attachment of
the Covered System to or use with equipment, software, or other items which are
not sold to Company or End Purchaser by Sun;

 

(h)                    problems
caused by relocations or attempts to relocate Covered Systems; or

 

(i)                        problems
attributable to components other than the Covered System.

 

Sun will use commercially
reasonable efforts to make support required as a result of such events
available outside of this Exhibit, and any such support will be invoiced
separately and paid at Sun’s then-current published time and materials rates in
the country in which the support is provided.

 

3.        IPR OWNERSHIP AND LICENSE TERMS FOR SERVICE DELIVERABLES

 

3.1       License
terms.

 

(a)                     License to Company. Sun grants to Company a
non-exclusive and non-transferable license to use Deliverables for its internal
use only, subject to:

 

(i)                       any
restrictions set out in the Order or Order Confirmation as to the permitted
number of users and CPUs; and

 

(ii)                    any
supplemental license terms accompanying the Deliverable.

 

(b)                    Permission to sub-license. To the extent of
its authorization as set out in the Schedule, and subject to any limitations
set out in the Guide or the applicable Service Listing or SOW, Sun grants
Company the right to grant End Purchasers in the territory to which such
authorization applies, a royalty free, non-transferable, right and license to
use Deliverables for such End Purchaser’s Internal use. Company shall:

 

(i)                       implement
its own end user license agreement with such End Purchasers, which agreement is
consistent with the rights and obligations in this section, and incorporates in
substance, and is no less protective of Sun than, the terms set out in this
section;

 

(ii)                    use commercially
reasonable efforts to enforce the terms of any such end user license agreement;
and

 

(iii)                 where Company
obtains an indemnity from End Purchasers for any damages incurred by Sun, to
the extent such damage is caused by misuse by End Purchasers of a Sun
deliverable that is sublicensed by Company, pay such damage award to Sun.

 

(c)                     Use of  tools
and Updates. Tools may be accessed only by authorized Company
contacts for the sole purpose of diagnosing and resolving problems on Covered
Systems. The provision of an Update will not alter any warranty on the Software
previously

 

9

 

licensed, and such
Updates may be used or accessed only in connection with the use of Covered
Systems.

 

(d)                   License restrictions. Except to the extent
permitted by applicable law, Company may not:

 

(i)                        make
copies of Deliverables, other than for archival purposes;

 

(ii)                     modify,
decompile, or reverse-engineer Deliverables;

 

(iii)                  authorize End
Purchasers to do the foregoing.

 

(e)                    Reservation of  rights. Software is confidential and copyrighted, all rights
therein not expressly granted to Company are reserved to Sun, and Sun retains
title to all copies.

 

4.        SERVICE WARRANTIES

 

4.1                   Warranty. Sun warrants that Services will
be performed in a good and workmanlike manner.

 

4.2                   Exclusive remedy. Company’s sole and
exclusive remedy and Sun’s entire liability for breach of the above warranty
will be reperformance of Services.

 

4.3                   Claims. Any claim for breach of the above
warranty must be made in writing and notified to Sun within 90 days of
performance of the Services at issue.

 

5.        CHARGING ARRANGEMENTS FOR SERVICES

 

5.1                   Charges and
invoices. The charges for Services are as set out in the Price List or the
applicable SOW (if not in the Price List). Charges for systems support Services
shall be invoiced monthly, quarterly or annually in advance as agreed between
the parties as stated in the Accepted Order. Invoices for other Services shall
be rendered upon completion of such Services or monthly in the event the
duration of services exceeds one month.

 

5.2                   Items not included in charges. Except as
otherwise stated in the Guide or Service Listing, or SOW the stated charges are
exclusive of the following items (for which Company is responsible):

 

(a)                     all sales and
other taxes based upon the value of the Services;

 

(b)                    reasonable
travel expenses in the amount actually incurred by Sun;

 

(c)                     reasonable
and necessary out-of-pocket expenses associated with any services designated as
consulting services in a Service Listing or SOW (“Consulting Services”);

 

(d)                    costs incurred
by Company or its employees in connection with their participation in
educational services;

 

(e)                     transportation
and insurance charges; and

 

(f)                       the costs
of operating supplies and accessories.

 

6.        MISCELLANEOUS

 

6.1                   Service avaliability. Services may not be
available in certain locations, and Deliverables may vary between locations.
Services are subject to availability of qualified Sun personnel and facilities
and may be subject to additional costs or terms or to payment of minimum
applicable fees. Sun may modify the Service Listings at any time, but will
continue to provide Deliverables as set out in the relevant Service Listing in
effect on the date the relevant Order Confirmation was issued. Sun may make
Service substitutions and modifications that do not cause a materially adverse
effect in overall Service performance.

 

6.2                     Additional
provisions relating to Accepted Orders for Services.

 

(a)                     Renewal. In order to ensure that Service is
not interrupted, Company should renew a renewable Accepted Order for Services
for successive one (1) year periods by submitting a new Order in accordance
with this Exhibit at least thirty (30) days prior to the expiration date. Sun
may modify the prices and/or discounts set forth in a renewable Accepted Order
for Services upon renewal of any such Accepted Order, or annually for Accepted
Orders with a term of more than one year.

 

(b)                    Termination. Without limiting section 9.1
of the main text of the Exhibit, the following additional provisions shall
apply to Accepted Orders for Services:

 

(i)                       neither
party may terminate a renewable Accepted Order for Services without cause
during its initial term; and

 

(ii)                    (either party
may terminate a renewed Accepted Order for Services without cause after its
initial term by giving sixty (60) days’ prior written notice to the other
party.

 

7.        SERVICES SUPPLIED TO COMPANY AS AN END PURCHASER

 

The rights and
obligations set out in this section 7 apply to Services that Company buys for
itself and in respect of Products it uses as an End Purchaser.

 

7.1                   Remote Services. By purchasing any Services
which are delivered remotely, Company:

 

(a)                     agrees that
Sun may access Products remotely at Customer’s site, and may process and store
Product data in order to remotely monitor, manage and service Products (all
such data will be treated by Sun as Company Confidential Information, except
that Company permits disclosure for the purposes of fulfilling this Agreement);

 

(b)         commits to procure and maintain
a Sun- approved bridge or gateway appropriate to the systems or networks
involved, at Company’s expense; and

 

10

 

(c)                    assumes
responsibility for all  telecommunications
and internet access charges related to the remote Services.

 

If Company fails to
permit or facilitate remote Services, Sun may decline to deliver such Services
and assess additional charges or other conditions for the delivery of Services
that would otherwise be provided remotely, or revoke any applicable warranties.

 

7.2      Systems Support

 

(a)                    Company Sites. Systems
support will be delivered to the Company’s sites and for the systems indicated
on the relevant Order Confirmation (respectively, “Company Sites” and “Covered
Systems”). Company will give Sun at least thirty (30) days’ written notice
prior to relocating Covered Systems, which notice must specify the new site.
Support of relocated systems is subject to local availability and may be
subject to additional fees, and to inspection and recertification of the
relocated systems at Sun’s applicable time and materials rates.

 

(b)                    Problem
Avoidance. Company will perform routine system preventative maintenance and
cleaning. Prior to requesting support from Sun, Company will comply with all applicable
operating and troubleshooting procedures, as posted on a Sun knowledge database
or as otherwise provided by Sun. If such efforts are unsuccessful in
eliminating the malfunction, Company will promptly notify Sun. Company will
establish and maintain a procedure external to Covered Systems so that Company
can reconstruct lost or altered files, data, or programs.

 

(c)                    Qualified Personnel. Requests for hardware
and software support may be made only by Company personnel who:

 

(i)                        possess
the necessary expertise and training (as from time to time defined by Sun) to
diagnose and resolve system and software malfunctions with direction by Sun;
and

 

(ii)                     are
designated as “Contacts” in accordance with the applicable Service Listing or
SOW.

 

(d)                    Additional
Systems. Company may add systems to an Accepted Order for a period
coterminous with the term of the Accepted Order at Sun’s applicable, pro-rated,
per-system fee, upon written notice to Sun and subject to Sun’s rights of
inspection. Sun will provide to Company an add-on Order Confirmation reflecting
the additional Covered Systems and associated additional fee.

 

(e)                    Eligible
Systems - Automatic Eligibility. Systems support is available only for
systems which are covered by a valid software license and are in good working
condition. Systems placed under an Accepted Order for systems support prior to
the expiration of:

 

(i)                        Sun’s
warranty; or

 

(ii)                     an existing
Sun support agreement, automatically will be deemed to be in good working
condition.

 

(f)                      Eligible Systems - Eligibility after Observation
Period. In respect of any system that does not qualify for support
under sub-section 7.3 (e), Sun may require that the system pass an inspection.
In that event, Sun may place such system under observation, and support coverage
will only commence after the system has operated for ninety (90) consecutive
days (the “Observation Period”) without experiencing a system failure. Systems
requiring support during the Observation Period will receive such support on a
time and materials basis.

 

(g)                   Eligible Systems - Other. In respect of any system that does
not qualify for support under sub-sections 7.3 (e) or (f), Sun reserves the
right to determine whether any problem occurring during the first ninety (90)
days of support coverage is attributable to a condition predating the
commencement of support coverage, and to bill Company at Sun’s applicable time
and materials rates to correct such problem and return such system to eligible
condition.

 

7.3      On-Site Materials

 

(a)                    Company will
segregate, safeguard and designate as the property of Sun all tools, parts,
spares, equipment and materials placed on a Company site and for which title is
not transferred to Company (“On-Site Materials”).

 

(b)                   On-Site
Materials may only be used by authorized persons consistent with the terms of
the applicable Service Listing or SOW. Company will have no right or interest
in the On-Site Materials, and will not grant any liens or security interests
therein. Company assumes all risk of loss or damage to On-Site Materials that
may occur prior to their return and receipt by Sun.

 

(c)                    Within ten
(10) days after termination or expiration of any Accepted Order, Company will
deliver to Sun any On-Site Materials related to such Accepted Order, with a
bill of lading, freight charges prepaid and fully

 

11

 

insured.

 

7.4      Non-Solicitation

 

(a)                    Without the
prior written consent of Sun, Company will not recruit any personnel assigned
by Sun to perform any Consulting Services for Company until one (1) year after
completion of the applicable Services.

 

(b)                   “Recruit” means
to initiate personal contact for the purposes of hiring, but does not include
responding to an unsolicited application, receiving unprompted responses to
advertisements, or receiving candidates who are, without Company involvement,
presented to Company by a recruiting firm.

 

(c)                    If Company
hires personnel in violation of this provision, Company immediately will pay
Sun liquidated damages in an amount equal to the hired employee’s total
compensation for the six (6) months preceding the date of hiring.

 

7.5                  Other
Obligations In Respect Of Services Purchased As An End Purchaser. Company
shall fulfill all applicable Company obligations under the Agreement, and
acknowledges that performance of this Agreement by Sun is conditional upon
Company’s fulfillment of such obligations; and that any additional services
that Sun provides as a result of Company’s failure to do so will be billed
separately, at Sun’s applicable time and materials rates. Company will
cooperate with Sun and will provide safe and timely access to its premises and
computer equipment, including remote access, adequate working space, facilities
and any other services, personnel, information or materials that Sun personnel
may reasonably require to perform Sun’s obligations.

 

7.6                  Limitations on
use of Service. Company acknowledges that for Services that are designated
as being solely for Company’s internal use, Company may not provide, lease, or
resell Services, directly or indirectly, to any third party, unless, and only
to the extent that, Company is authorized by Sun in writing to do so.

 

7.7                  Termination of Accepted Orders for Services under this
section. Without limiting the termination arrangements set out in
the Exhibit, the following additional provisions shall apply to termination of
this Exhibit and of Accepted Orders made under this Exhibit:

 

(a)                    Sun will
deliver to Company any Deliverables, whether finished or unfinished, subject to
receipt of payment for any Services rendered through the date of termination or
expiration; and

 

(b)                   where the
Exhibit has been terminated by Sun for cause, Company will destroy all copies
of Software.

 

IN WITNESS WHEREOF THE
DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE EXECUTED THIS IFORCE
EXHIBIT AS OF THE APPENDIX EFFECTIVE DATE.

 

	
   

  	
  SUN MICROSYSTEMS, INC.

  	
   

  	
   

  	
  COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ G. Grimes

  	
   

  	
  By:

  	
  /s/ Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  G. Grimes

  	
   

  	
  Name:

  	
  Anthony P. Orlando

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP PMA

  	
   

  	
  Title:

  	
  Vice President 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  2/24/03

  	
   

  	
  Date

  	
  Dec. 13, 2002

  

 

12

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