billing at least $1,200 MRR after year one of the Addendum. IN WITNESS WHEREOF, the parties have caused this Addendum to
CLOUD SERVICES RESELLER AGREEMENT SPECIAL ADDENDUM: FACTION CLOUD SERVICES By signing below, you, CSR (“you” or “CSR”) acknowledge and agree to abide by the terms and conditions contained in this special addendum (“Addendum”), regarding the resale of the Cloud Services defined below, provided by eLeMeNtek LLC (doing business as “Faction”) and sold to you by Westcon Group North America, Inc. (“Distributor”), including any of its affiliates and subsidiaries. Any prior terms and conditions of sale or agreements currently in effect between CSR and Distributor, including but not limited to the Cloud Services Reseller Agreement (the “Agreement”), all of which are incorporated herein by reference; remain in full force and effect. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. In the event of any conflict between this Addendum and any prior terms and conditions of sale, this Addendum shall prevail. This Addendum is in addition to and does not replace or modify any Documentation provided in connection with the Cloud Services. This Addendum shall be deemed effective as of the date last signed below (“Effective Date”). CSR and Distributor hereby agree as follows: 1.
Description of Services. Faction is a cloud service provider of a unique infrastructure as a service known as “White Label Cloud Services®” (“Cloud Services”) where Faction owns the IT service(s) infrastructure and makes the Cloud Services available to Distributor for distribution to CSRs who may elect to become White Label Cloud Service Providers and provide the Cloud Services to End Users under CSRs’ own brand(s). Subject to the terms of this Addendum, Distributor hereby appoints CSR, and CSR hereby accepts such appointment, as a reseller of the Cloud Services to End Users in the Territory.
2.
AUP. CSR acknowledges and accepts that its End Users must agree to be bound by the terms of the Faction Authorized Use Policy (“AUP”) for the Cloud Services, available for viewing at www.zift123.com/signin.php, as it may be modified from time to time. CSR shall not modify the AUP and shall notify its End Users that they may not modify the AUP without the prior written consent of Faction. The Cloud Services of any End User who is in breach of the AUP may be suspended and/or terminated by Faction in accordance with this Addendum and/or the AUP upon notification to CSR and the provision of twenty (20) business days to cure any breach. Notwithstanding the foregoing, such cure period will not apply if suspension is necessary to protect the Cloud Services or other End Users from imminent and significant operational or security risk. In the event a suspension under these Terms arises out of conduct constituting a violation of any applicable law or regulation, then any monthly fees remaining in the subscription term, after the month in which such conduct occurred, shall immediately accelerate and be billed to CSR. In the event a suspension does not arise out of conduct constituting a violation of any applicable law or regulation, then upon expiration of the applicable cure period, any monthly fees remaining in the then current year of the subscription term, after the month in which such cure period expired, shall immediately accelerate and be billed to the CSR. Faction may change the AUP from time to time, and any such changes made during the term of the Addendum will become effective upon twenty (20) business days’ notice to CSR and End Users. Distributor reserves the right to reject at its sole discretion any Purchase Order Forms for End Users that do not accept the terms of the AUP.
3.
White Label Cloud Terms. In the event CSR elects to become a White Label Cloud Services Provider, CSR must meet all of the following requirements prior to reselling the Cloud Services under CSR's own brand name: i) CSR will remain in compliance with the White Label Cloud Terms and the AUP as set forth on the Faction Partner Portal at www.zift123.com; ii) CSR will cooperate with Faction in the rendering of the Cloud Services, including without limitation, providing Faction with timely access to appropriate equipment, systems, data, information and personnel of CSR and acknowledge that the failure of CSR to do so could adversely affect Faction's ability to perform; iii) Faction may, in performing its services, be dependent upon and using systems, data, material, and other information furnished by CSR without any independent investigation or verification thereof, including, but not limited to, the identification of critical systems, and Faction shall be entitled to rely upon the functionality of the systems and accuracy and completeness of such information in performing its services; iv) CSR will comply with CSR Confidentiality Terms as set forth on the Faction Partner Portal; v) During the period that Faction makes Cloud Services available to CSR for resale, and for a two (2) year period thereafter, neither Faction nor CSR will directly solicit, for the purpose of employment, any person employed by the other party. 1
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For purposes of this Addendum, the “White Label Cloud Terms” means, collectively, the White Label Cloud Branding Guidelines, White Label Cloud SLA and White Label Cloud Support. The White Label Cloud Terms will be available at the URL to be delivered by Distributor to CSR within a commercially reasonable time following execution of this Addendum or its then current weblink equivalent. Upon request, the White Label Cloud Terms will be made available to CSR prior to execution of the Addendum. CSR will cooperate with any reasonable requests from Faction with respect to the enforcement of the White Label Cloud Terms. In no event will any White Label Cloud Services Provider be permitted to assign and/or pass through any of the White Label Cloud Terms (including the White Label Cloud SLA) to End Users. For clarification purposes, White Label Cloud Servicers Providers may elect to offer individual SLAs to their End Users pursuant to any End User Agreement. Distributor reserves the right to reject at its sole discretion any Purchase Order Forms from CSR where the White Label Cloud Services Providers do not accept the terms of the White Label Cloud Terms. 4.
CSR Terms of Use. Except as otherwise prohibited under this Addendum, CSR may offer to End Users service level agreements with respect to the Cloud Services (the “CSR Terms of Use”) that consist of more favorable terms than provided by Distributor to CSR under the White Label Cloud Terms. CSR acknowledges and agrees that in no event will Distributor be directly liable to End Users for any breach of the CSR Terms of Use.
5.
CSR Fees. CSR shall set all fees which CSR charges to End Users for the Cloud Services. CSR acknowledges and agrees that CSR is liable under this Addendum to pay all undisputed fees due to Distributor for Cloud Services regardless of whether End Users pay fees due CSRs. In the event that any fees owed to Distributor by CSR are thirty (30) days or more overdue, Distributor may suspend access to the Cloud Services associated with such delinquent payment ("Suspension of Access") without any further penalty to Distributor. In the event of a Suspension of Access, any remaining monthly fees in the subscription term associated with such delinquent payment, beginning on the first day of the month immediately following the Suspension of Access, shall immediately accelerate and be billed to CSR. Upon or prior to the expiration of the term of the applicable End User Agreement, Distributor shall have the option to reinstate End User's access to the Cloud Services if Faction has not re-deployed the third party equipment originally allocated to the suspended End User for the Cloud Services to another third party. Upon or prior to the expiration of the applicable End User Agreement, Distributor shall have the option not to renew the Purchase Order Form or terminate the End User account, without any further penalty to Distributor. In the event of reinstatement of Cloud Services, Distributor may request payment of the monthly Fees due from the date of the Suspension of Access through the date of reinstatement of the Cloud Services. For purposes of this Addendum, “End User Agreement” shall means an agreement between a CSR, on the one hand, and End Users, on the other hand, providing for such End User to purchase and use the Cloud Services.
6.
Responsibility for Employees or Agents. CSR shall be liable for the violation of this Addendum by any employee or agent of CSR who gains access to the Cloud Services as a result of CSR’s failure to use reasonable security precautions. CSR shall pay Distributor any fees arising from the use of the Cloud Services by any of the parties described in this Section.
7.
Cloud Service Obligations. CSR agrees to: (i) ensure CSR’s compliance with applicable laws and the AUP for Cloud Services provided; (ii) pay when due all undisputed fees for the Cloud Services; (iii) use reasonable security precautions which are implemented as a condition to End Users’ use of Cloud Services; (iv) cooperate with the reasonable investigation of outages, security problems, and any suspected breach of the Addendum, including the White Label Cloud Terms or the AUP; (v) maintain current account information; and (vi) immediately notify Distributor of any known unauthorized use of a CSR account or an End User account or any other known breach of security.
8.
Suspension. Faction may suspend Cloud Services upon notification to Distributor and End Users if: (i) the Cloud Services are being used in violation of this Addendum, the White Label Cloud Terms, or the AUP; (ii) CSR fails to cooperate with any reasonable investigation of suspected violation of this Addendum, the White Label Cloud Terms, or the AUP; (iii) the Cloud Services have been accessed or manipulated by a third party without consent or (iv) as required by law. Distributor will use commercially reasonable efforts to provide advance notice of a suspension of Cloud Services and opportunity to cure, unless suspension is necessary to protect Cloud Services or other End Users from imminent and significant operational or security risk. A reinstatement fee may be charged upon reinstatement of suspended Cloud Services.
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9.
Access to Content. CSR acknowledges and agrees that neither it, nor any End User, will have access to any End User Content during a suspension of the services or following termination of this Addendum. For purposes of this Addendum, “Content” means electronic files, materials, data, text, audio, video, images or other content transmitted, stored, retrieved or processed by End Users using the Cloud Services. CSR shall notify End Users that they should maintain current and reliable backups of stored files. Distributor has no obligation to help recover files.
10. White Label Cloud Branding Guidelines. Distributor shall provide CSR with Faction’s branding and/or other applicable marketing guidelines (including any guidelines pertaining to CSR's use of Faction's Marks in connection with its promotion and distribution of the Cloud Services) and shall promptly notify CSR of any changes in such guidelines. CSR shall use the Faction Marks only for purposes of identifying the Cloud Services and only during the term of this Addendum, which shall be limited to displaying the Faction Marks on (i) CSR's website or a successor URL of CSR, (ii) printed marketing materials, and/or (iii) electronic collateral materials, unless Faction provides its prior written approval of another use. For purposes of this Addendum, Faction Marks refers to Faction’s and any third-party licensor’s trademarks, logos, and any other marks set forth in the White Label Cloud Branding Guidelines referenced herein. 11. Term. The initial term of this Addendum begins on the Effective Date stated below and will continue until the later of thirty six (36) months, or the expiration or termination of the last Purchase Order Form between the parties. Upon expiration of the initial term, this Addendum shall automatically renew for consecutive renewal terms equal to the initial term unless either party provides at least one hundred and twenty (120) days notice of non-renewal to the other party. 12. Termination. Distributor may terminate this Addendum for cause upon written notice to CSR if: (i) payment of any undisputed invoiced amount is overdue and not paid within ten (10) days of written notice; provided, however, that in the event CSR subsequently fails to pay an undisputed invoice on time, Distributor shall have the right to immediately terminate this Addendum in the event any third, sequential nonpayment without any cure period; (ii) CSR materially breaches any of its obligations under these Terms and fails to cure such breach within thirty (30) days of written notice from Distributor describing the failure; (iii) CSR breaches its confidentiality obligations set forth in the Agreement; or (iv) CSR becomes insolvent or bankrupt, or insolvency, liquidation or other similar proceedings are commenced by or against CSR. Neither party will have the right to termination of this Addendum for convenience during the initial twelve (12) months. After such initial twelve (12) months, this Addendum may be terminated by either party without cause upon at least one hundred and twenty (120) days prior written notice. 13. Effects of Termination. If this Addendum expires or is terminated prior to the end of the term, then the following conditions apply: a.
With respect to all End Users that have been provisioned Cloud Services, the parties shall continue to be bound by the Addendum through the expiration of the then current term of the applicable End User Agreements. CSR and Distributor will work together in good faith to notify End Users that, upon expiration of the then current term of the applicable End User Agreement, CSR will no longer be reselling and/or providing the Cloud Services, and the parties will use their best efforts to transition the End Users to another Faction authorized distributor.
b.
CSR shall discontinue its promotion and distribution of the Cloud Services immediately upon the expiration or termination of this Addendum, except for the distribution of the applicable Cloud Services to End Users through the expiration of the then current term of the applicable End User Agreements; and;
c.
CSR shall return, delete, or destroy all Confidential Information in its possession.
14. Survival. Termination or expiration of this Addendum shall be without prejudice to the rights and obligations of the parties accrued up to and including the date of expiration or termination and will not relieve either party of any obligation under this Addendum, which obligation expressly or by implication survives termination of this Addendum. 15. Ordering and Fees. CSR will issue a purchase order form (“Purchase Order Form”) to Distributor with sufficient information for Distributor to process it. Distributor will have the right to accept or reject the Purchase Order 3 Westcon Group Confidential Information
Form, which shall be communicated to Distributor in writing within two (2) business days of submission. In the event a Purchase Order Form is not accepted or rejected within two (2) business days, such Purchase Order Form shall be deemed accepted. Each Purchase Order Form accepted by Distributor shall be subject to the terms and conditions of the Agreement, which includes this Addendum. Distributor shall charge, and CSR agrees to pay all undisputed recurring and non-recurring fees set forth in the Distributor’s price list for the Cloud Services (“Price List”), which shall be provided upon request. CSR acknowledges that the Price List is subject to change by Distributor from time to time; provided, that Distributor shall notify CSR in writing of any changes to the Price List and the effective date of such changes. 16. Invoicing. Unless otherwise agreed in writing by CSR and Distributor, the Cloud Services shall be sold by CSR to End User for usage by End Users for a fixed term, which shall be a minimum of one (1) year as designated on the Purchase Order Form. CSR shall pay Distributor a monthly fee based upon the prevailing Price List. For clarification purposes, a pro-rated amount shall be due for the first month of billing, with subsequent monthly payments due in in advance of each month. With respect to fees based on any variable rate included in the Price List, such fees shall be payable in accordance with the actual usage by End User usage during the previous month, as set forth in the Fee Schedule. Distributor will invoice CSR and CSR’s payment for undisputed invoices shall be due within net twenty (20) days. All amounts included in invoices will be expressed in U.S. dollars. Distributor may suspend the applicable Cloud Services subject to non-payment if undisputed invoices are not paid when due. Distributor may charge interest on overdue amounts at 18% per annum compounded monthly at 1.5% per month (or the maximum legal rate if it is less). If any amount is overdue by more than net thirty (30) days and Distributor initiates collection actions, CSR agrees to pay Distributor its reasonable costs of collection, including attorney fees and court costs. All fees that are not disputed by CSR within net forty (45) days are conclusively deemed accurate. If CSR desires to dispute an invoice or any portion thereof, CSR shall (i) pay the undisputed portion of such invoice (if any) within net twenty (20) days, and (ii) promptly deliver to Distributor an explanation of its rationale for disputing the invoice. 17. Additional Acknowledgements. Distributor does not promise that the Cloud Services will be uninterrupted, error-free, or completely secure. CSR acknowledges and agrees that there are risks inherent in Internet connectivity that could result in the loss of privacy, Confidential Information, and property and that CSR is solely responsible for the suitability of the Service chosen. CSR acknowledges and agrees that no claim arising from Cloud Services downtime shall exceed an amount equal to fees for Cloud Services for the billing period during which the downtime occurred. 18. Partner Portal. Upon execution of the Addendum, CSR will be given access to Faction’s partner portal for the Cloud Services (“Partner Portal”), which will enable CSR to register opportunities, customize marketing material, view White Label Cloud Terms and conduct email and social media campaigns, in addition to other partnership enhancing capabilities. The annual fee for the Partner Portal is currently being waived, but Distributor reserves the right to discontinue access to the portal and CSR may choose to pay annually for this benefit if CSR is not billing at least $1,200 MRR after year one of the Addendum. IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by their duly authorized representatives. Westcon Group North America, Inc.
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