EX-10.6 6 ex10-6.txt WARP Solutions Confidential WARP MASTER DISTRIBUTOR Master Distribution Agreement THIS MASTER DISTRIBUTOR AGREEMENT (the "Agreement'), is made as of this _1__ day of ___September___ 2002_ (the "Effective Date") by and between CDI Technologies, Inc., including its employees, agents, contractors, subsidiaries and Affiliates, and including such Affiliates' employees, agents and contractors (collectively, "MASTER DISTRIBUTOR"), a California corporation, with a places of business at _1630 Oakland Road, San Jose, California and 14F Samsung Bd.237-11, Nonhyundong, Kangnamgu Seoul, Korea__ , and WARP Solutions, Inc. ("WARP"), a Delaware corporation, with a place of business at 535 West 34 Street 5th Floor, New York NY 10001. In consideration of the mutual promises contained herein, the above-mentioned parties agree as follows: Section 1: Definitions 1.1 Capitalized terms used in this Agreement shall have the meanings attributed to them below or in context in which the term is used, as the case may be. (i) "Affiliate" means any entity which, directly or indirectly, Controls, is Controlled by, or is under common Control with another entity, and any partnership in which such entity is a partner. The foregoing definition includes any entity that conforms to the definition as of the Effective Date hereof, as well as any entity that conforms to the definition any time after the Effective Date hereof, provided that any entity shall only be deemed to be an Affiliate hereunder for such period of time that it conforms to the definition during the term of this Agreement. (ii) "Business Day" shall mean any day other than a Saturday, Sunday or any National holiday. (iii) "Confidential Information" means: (a) any information, whether written or oral, which relates to internal controls, computer or data processing programs, algorithms, electronic data processing applications, routines, subroutines, techniques or systems, or information concerning the business or financial affairs and methods of operation or proposed methods of operation, accounts, transactions, proposed transactions, security procedures, trade secrets, know-how, or inventions of either the Protected Party, any Affiliate of the Protected Party, or any client, agent, contractor or vendor of the Protected Party and (b) the identities and other related information of clients of either Protected Party, except such information which is in the public domain at the time of its disclosure to the Receiving Party or thereafter enters the public domain other than as a result of a breach of duty on the part of the Receiving Party or its personnel, or where the Receiving Party can prove it derived the information independently. (iv) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through record or beneficial ownership of voting securities, by contract, or otherwise. (v) "Customer" means an entity to whom the MASTER DISTRIBUTOR, under the terms of this Agreement, sells the System.. (vi) "Customer Maintenance and Support Services Agreement" means the service level agreement for providing support to the Customer according to WARP'S policies, subject to the payment by Customer of the applicable fees for such support. (vii) "MASTER DISTRIBUTOR" is the entity, first identified above, including its employees, agents, contractors and Affiliates, and including such Affiliates' employees, agents and contractors, who directly service a specific end-user market segment. The MASTER DISTRIBUTOR will purchase WARP's System directly from WARP, and, unless otherwise expressly stated herein, resell such System to end user customers and resellers. (viii) "Effective Date" with reference to the Agreement means the date, first set forth above, upon which the Agreement becomes binding and enforceable. Effective Date, when used in specific reference to a particular Exhibit, means the date first set forth in that particular Exhibit upon which that Exhibit becomes binding and enforceable. (ix) "Include" and its derivatives shall mean including without limitation. This term is as defined, whether or not capitalized in this Agreement. (x) "NDA" means the NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT by and between MASTER DISTRIBUTOR and WARP dated ___8/31/02_______________ . (xi) "Protected Party" means the party furnishing its Confidential Information to the other party. (xii) "Receiving Party" means the party who receives Confidential Information from the other party. (xiii) "System" means the proprietary programmed network appliance named in Exhibit A to the Agreement and any changes to it provided by WARP, as well as any Documentation. Section 2: Appointment, Customers 2.1 Appointment as MASTER DISTRIBUTOR. WARP hereby grants to the MASTER DISTRIBUTOR a temporary,-exclusive right to distribute the System to the Customers in South Korea during the term of this Agreement. This Agreement (with its attached Exhibits) provides the terms and conditions which shall govern the appointment of the MASTER DISTRIBUTOR. 2.2 Customers. MASTER DISTRIBUTOR is authorized to solicit end user Customers for the System from all classes of potential end users of the System. Section 3: Fees. 3.1 MASTER DISTRIBUTOR agrees to pay the purchase price of the System, and other amounts due, as specified in Exhibit B attached hereto (collectively the "Purchase Price"). 3.2 The MASTER DISTRIBUTOR agrees to pay the Purchase Price and other amounts due, if any, within thirty (30) days of receiving an invoice from WARP. 3.3 All amounts stated in the Purchase Price for the System purchased by MASTER DISTRIBUTOR from WARP are in US dollars. Section 4: MASTER DISTRIBUTOR's Sales Rights 4.1 In connection with the exercise of its rights under this Agreement, but solely in connection with the marketing of System, the MASTER DISTRIBUTOR may refer to itself during the term of this Agreement as an authorized MASTER DISTRIBUTOR of WARP. 4.2 Sales to Customers. MASTER DISTRIBUTOR is authorized to contact, solicit, and accept, in accordance with the terms hereof, potential Customers of the System. All Customers of the System obtained through the efforts of MASTER DISTRIBUTOR shall be in privity of contract with MASTER DISTRIBUTOR. MASTER DISTRIBUTOR shall bear all credit risks with respect to the Customers. 4.3 MASTER DISTRIBUTOR shall have no right to reproduce the System, or any part thereof. All of the Systems shall be distributed pursuant to WARP's current NDA, as amended by WARP from time to time, a copy of which WARP will provide MASTER DISTRIBUTOR. MASTER DISTRIBUTOR shall not sell or distribute any System to any Customer unless the Customer has accepted the terms of WARP's current NDA, under penalty of perjury and in writing. Page 1 of 4 WARP Solutions Confidential WARP MASTER DISTRIBUTOR Master Distribution Agreement 4.4 The MASTER DISTRIBUTOR shall not have the right to obtain and/or retain the rights to distribute other network appliances or products similar to and/or that compete with the System from other vendors. WARP will not appoint other MASTER DISTRIBUTORS or DIRECT RESELLERS to sell the System in South Korea during the term of this agreement. Section 5: MASTER DISTRIBUTOR's Obligations 5.1 MASTER DISTRIBUTOR agrees to purchase Systems for the sole purpose of reselling them to Customers or for internal use for supporting sales and marketing and support activities. 5.2 The MASTER DISTRIBUTOR must be certified in accordance with the Certification Program described in Exhibit C. Even if the MASTER DISTRIBUTOR has completed the Certification Program, WARP has final authority to decide if the MASTER DISTRIBUTOR is to be given certification. 5.3 The MASTER DISTRIBUTOR shall participate in WARP's relevant sales, pre-sales and technical training programs. 5.4 The MASTER DISTRIBUTOR shall be resposible for the installation of the System at the Customer's location. 5.5 The MASTER DISTRIBUTOR shall provide and be responsible for basic technical support services to the Customer with respect to the installation of the System. The MASTER DISTRIBUTOR will perform such services in a professional and workman-like manner. 5.6 MASTER DISTRIBUTOR agrees to purchase 5 units upon signing agreement on a sale or return basis. Conditioning that WARP shall provide sucessful installations with 5 units in October,2002 and show the performances as promised in written materials for 30days, MASTER DISTRIBUTOR will indicate by December 1, 2002 it's intention to either pay for the units or return them to WARP. If MASTER DISTRIBUTOR pays for the units it must wire funds to WARP's account no later than December 5 2002.If it decides to return the units it must do so by December 5 2002 in good and working condition. If they are damaged in any way MASTER DISTRIBUTOR agrees to compensate WARP for damages based on WARP's estimated cost of damages. The price of these units are specified in Exhibit B. 5.7 MASTER DISTRIBUTOR agrees to enter into a standard service agreement with WARP. The pricing for this support are outlined in Exhibit B. Section 6 : WARP's obligations 6.1 Technical support WARP shall dispatch one dedicated engineer to Korea, at WARP's expenses, for two weeks to assist with references site installations in October, 2002. Additionally, upon the request of CDI prior November 30, 2002, WARP shall dispatch one dedicated engineer to Korea at WARP's expenses, for additional three consecutive business days to resolve technical problems of reference sites or assist with references site installations. WARP requires 2 weeks lead time to schedule this visit. 6.2 Development support WARP will provide CDI with written response to development requests and customization within 2 weeks from receiving written request. Section 7: Duration, Termination and Renewal 7.1 Duration of Agreement. The term of this Agreement shall commence on the Effective Date and, , shall remain in full force and effect for a term of 120 days. 7.2 Renewal. WARP agrees to discuss entering into a longer term MASTER DISTRIBUTION aggreement with MASTER DISTRIBUTOR within 120 days of the effective date. The terms of this potential agreement with largely be based on MASTER DISTRIBUTORS success over the period of this agreement. 7.3 Termination. 7.3.1 Terminations for Cause. In the event that either party or any of its Agents breaches any of the terms of this Agreement and said breach is not cured within thirty (30) days after written notice thereof to the non-breaching party, the non-breaching party may terminate this Agreement immediately by providing notice of termination to the breaching party. 7.3.2 Terminations without Cause. Either party may terminate this Agreement at any time, after the first 120 days, upon written notice to the other party. Section 8: Prices and Advertising Program 8.1 MASTER DISTRIBUTOR may set the prices paid to it by Customers for the System it sells to them, within the following parameters, unless agreed otherwise: 8.1.1 The MASTER DISTRIBUTOR's margin will be set at a maximum margin of__100___% over the wholesale price; and the wholesale price of the System is set out in Exhibit B; and 8.1.2 The MASTER DISTRIBUTOR has the authority to reduce this margin and to unilaterally lower the retail price paid to it by Customers as a part of the MASTER DISTRIBUTOR's sales or marketing strategy. The MASTER DISTRIBUTOR shall in no way interpret this maximum margin as a suggested minimum price and is actually encouraged to reduce this price to enhance the appeal of the System to its Customers. 8.2 WARP has the right to revise its prices to MASTER DISTRIBUTOR MONTHLY, with thirty (30) days' written notice. Such revisions shall apply to orders received by WARP on or after the effective date of the revision. WARP shall price new products at the time of their introduction to market. 8.3 MASTER DISTRIBUTOR shall be responsible for paying all taxes of any nature which become due with regard to the distribution or sale of the System to Customers, except for taxes on WARP 's income, irrespective of which party may be responsible for reporting or collecting such taxes. WARP will invoice MASTER DISTRIBUTOR for all shipping charges and such invoices will be due and payable by MASTER DISTRIBUTOR by thirty (30) days from the date of such invoice. 8.4 Cooperative Advertising Program fully described in Exhibit D attached hereto. WARP may modify any such terms and conditions, or terminate such program, on at least 30 days' written notice to the MASTER DISTRIBUTOR. Upon termination of this agreement by either party, the Cooperative Advertisng Allowance shall expire immediately. No funds will be given or credited to the MASTER DISTRIBUTOR after such termination. Cooperative Advertising Program. WARP shall grant a cooperative advertising allowance of up to 1% of the Customer sales price for Systems (the "Cooperative Advertising Allowance"). Such allowance is to be available to the MASTER DISTRIBUTOR for the purposes of promotion and marketing of System consistent with the current terms and conditions of WARP's Section 9: Relationship of Parties During the Term of this Agreement 9.1 MASTER DISTRIBUTOR, its agents and employees shall under no circumstances be deemed agents or representatives of WARP. Other than as set forth in this Agreement, neither WARP nor MASTER DISTRIBUTOR shall have any right to enter into any contract or commitment in the name of, or on behalf of, the other, or to bind the other in any respect whatsoever. The parties shall have no right or authority, either express or implied, to assume or create, on behalf of the other party, any obligation or responsibility of any kind or nature. Section 10: Ownership 10.1 MASTER DISTRIBUTOR acknowledges that WARP owns all rights, title and interest, including, without limitation, all patent, copyright, trademark, trade secrets, intellectual property, moral rights and other proprietary rights, in and to the System and the propriatary technology incorporated into the System. Nothing herein shall be deemed as giving the MASTER DISTRIBUTOR any rights in or to the System or the propriatary technology incorporated into the System. Page 2 of 4 WARP Solutions Confidential WARP MASTER DISTRIBUTOR Master Distribution Agreement 10.2 MASTER DISTRIBUTOR shall not have access to or modify the source code of the System, nor shall it translate, reverse engineer, decompile, disassemble, or create derivative works based on the System or the propriatary technology incorporated into the System. 10.3 MASTER DISTRIBUTOR shall not remove any copyright notice, patent or patent pending notice, or other proprietary or restrictive notice or legend contained or included in any material provided by WARP. 10.4 The use by MASTER DISTRIBUTOR of the property rights mentioned herein is authorized only for the purposes of marketing and selling the System. MASTER DISTRIBUTOR will not use, authorize, or permit the use of the name WARP or any other trademark owned by WARP as part of its firm, corporate or business name or in any other way, without the prior written consent of WARP. Section 11: Confidentiality. 11.1 MASTER DISTRIBUTOR shall not disclose any information concerning the System to any person other than those employees, Affiliates, or consultants who use the System as part of the sales and marketing effort. 11.2 Both parties, using utmost care, shall hold in trust for each other and shall not use or disclose to any third party any Confidential Information which may be disclosed in connection with performance under this Agreement, and both parties shall employ all reasonable measures to protect Confidential Information from unauthorized or inadvertent disclosure, including measures no less protective than those measures that each party employs to protect its own information of a like nature. 11.3 Unless required by law, and except to assert their rights hereunder or for disclosures to employees with a need to know, the parties agree not to disclose the terms of this Agreement or matters relating thereto to any third party without the prior written consent of the other party. 11.4 All provisions of this Section and of the NDA shall remain in effect and survive the termination or expiration of this Agreement. In the event of any conflict between the provisions of this Agreement and those of the NDA, the provisions of the NDA shall take precedence. Section 12: Promotion 12.1 WARP may refer to MASTER DISTRIBUTOR by name in its filings with the Securities and Exchange Commission, its press releases and its advertising and promotional materials in connection with MASTER DISTRIBUTOR'S business association with WARP. Section 13: Product Warranty 13.1 WARP represents, warrants and covenants that it has full title to and ownership of the System and the propriatary technology incorporated into the System, free and clear of liens, claims and encumbrances. 13.2 WARP agrees to indemnify, defend and hold harmless the MASTER DISTRIBUTOR, its directors, officers, employees and agents, and defend any action brought against same with respect to any claim, demand, cause of action, debt or liability, to the extent that such action is based upon a claim arising our of or relating to any infringement of a copyright, trademark, trade secret, patent or other intellectual property right of any third party as a result of the MASTER DISTRIBUTOR'S use of the System in accordance with this Agreement. MASTER DISTRIBUTOR agrees to furnish WARP with prompt notice of such infringement claim, whereupon MASTER DISTRIBUTOR hereby authorizes WARP to defend such claim and agrees to cooperate and assist WARP fully in such defense, at WARP'S expense. 13.3 Indemnification. MASTER DISTRIBUTOR agrees to indemnify and hold WARP harmless from any liability, loss, damage, cost or expense (including reasonable attorney's fees and costs) incurred by WARP arising out of a claim by any third party against WARP as a result of the activities of the MASTER DISTRIBUTOR. The obligations of the MASTER DISTRIBUTOR hereunder shall survive the termination of this Agreement. 13.4 THE SYSTEM IS PROVIDED "AS IS". EXCEPT AS EXPRESSLY SET FORTH ABOVE IN SECTION 13.1, WARP HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. WARP DOES NOT WARRANT THAT THE OPERATION OF THE SYSTEM WILL BE UNINTERRUPTED OR ERROR FREE. 13.5 LIMITATION OF LIABILITY. EXCEPT FOR WARP'S OBLIGATIONS UNDER SECTION 13.2, IN NO EVENT SHALL WARP'S LIABILITY TO MASTER DISTRIBUTOR OR ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT EXCEED THE TOTAL AMOUNT ACTUALLY RECEIVED BY WARP HEREUNDER DURING THE PREVIOUS SIX (6) MONTHS. EXCEPT IN THE EVENT OF A BREACH OF CONFIDENTIALITY, IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANOTHER PARTY OR ANY THIRD PARTY FOR ANY INTERRUPTION IN THE OPERATION OF SUCH PARTY'S LOSS OF DATA, COSTS OF PROCUREMENTS OF SUBSTITUTE GOODS OR SERVICES OR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES UNDER ANY CAUSE OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION SHALL APPLY NOTWITHSTANDING ANY FAILURE OF AN ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. Section 14: Force Majeure 14.1 Neither WARP nor MASTER DISTRIBUTOR shall be liable for any failure, inability or delay to perform hereunder, if such failure, inability or delay is due to war, strike, fire, explosion, sabotage, accident, casualty, government law or regulation or any other cause beyond the reasonable control of the party so failing, and if due diligence shall be used in resuming performance. Section 15: Waiver 15.1 The failure of the parties in any instance to insist upon strict performance of any provision of this Agreement shall not be construed to be a waiver or relinquishment of all provisions or a waiver or relinquishment of a right to insist upon strict performance in the future; rather, such strict performance shall continue in full force and effect. Section 16: Modifications 16.1 Except as otherwise explicitly provided herein, this Agreement sets forth the entire understanding of the parties; any amendment, modification or waiver of any provision of this Agreement, or consent to any departure from the terms and conditions of this Agreement, must be in writing and signed by the parties hereto in order to be effective. Any such amendment, modification or waiver shall be effective only in the specific instance and for the specific purpose stated. Section 17: Notices 17.1 All notices under this Agreement shall be in writing and sent by mail, e-mail or facsimile, addressed as follows: WARP: Brian Matzke WARP Solutions, Inc. 535 West 34 Street, 5th Floor New York, NY 10001 USA E-mail: bmatzke@warpsolutions.com Fax: (646) 792-2812 Tel. (212) 962-9277 Page 3 of 4 WARP Solutions Confidential WARP MASTER DISTRIBUTOR Master Distribution Agreement MASTER DISTRIBUTOR: [Kelvin Kim, President CDI Technologies, Inc. 1630 Oakland Road, Suite A113 San Jose, CA 95131 1-408-441-6930 1 408-441-8743 FAX 17.2 Notices shall be effective upon receipt. The address indicated above for either party may be changed by prior written notice to the other party. Section 18: Severability 18.1 If any provision of this Agreement is determined to be invalid for any reason, such determination shall not affect the validity of the remaining provisions hereof, which shall continue in full force and effect. The invalid term or provision shall be replaced by such valid term or provision as comes closest to the intention underlying the invalid term or provision. Section 19: Jurisdiction 19.1 The interpretation, construction and effect of this Agreement shall be governed and construed in all respects in accordance with the Laws of United States, the State of New York without regard to its conflicts of law principles or to the United Nations Convention on Contracts for the International Sale of Goods, and the parties hereby submit to the exclusive jurisdiction of the state and federal courts of the State of New York. MASTER DISTRIBUTOR consents to a non-jury trial. Section 20: Non-solicitation 20.1 During the term of this Agreement and for twelve (12) months thereafter, MASTER DISTRIBUTOR shall not induce or influence, or attempt to induce or influence, any person who is engaged as an employee or consultant of WARP to terminate his or her engagement with WARP. MASTER DISTRIBUTOR shall not be in violation of this provision if a WARP employee or consultant responds to a public advertisement for employment. Section 21: Entire Agreement 21.1 This Agreement, the attached Exhibits hereto, and any agreement between the parties expressly identified herein, constitute the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. Section 22: Non-Assignability 22.1 This Agreement shall be binding on the parties hereto. Neither party may, or shall have the power to, assign this Agreement without the prior written consent of the other party, and any assignment made without such consent shall be void and of no effect as between the parties and shall be deemed a breach of this Agreement. Notwithstanding the foregoing, either party, without the prior written consent of the other party, shall have the right to assign or sublicense this Agreement and any right or obligation hereunder to an entity which acquires all or substantially all of the assets of such party or to any successor in a merger or acquisition of such party, during the term of this Agreement. Section 23: Conflict of Provisions 23.1 In the event of a conflict between the provisions of any Exhibit hereto and the provisions set forth in the body of this Agreement, the provisions of this Agreement shall govern. Section 24: Section Numbers and Headings 24.1 The section numbers and headings used herein are for information only and shall not affect the interpretation of any provision of this Agreement. Section 25: Binding Effect 25.1 This Agreement shall be binding upon and inure to the benefit of WARP and its authorized successors and assigns, under this Agreement, and MASTER DISTRIBUTOR and its authorized successors and assigns, under this Agreement. Section 26: Survival 26.1 The provisions set forth under Section 10, 11, 13 and 20 in this Agreement shall survive the expiration, termination or rescission of this Agreement and continue in full force and effect. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above. WARP SOLUTIONS, INC. MASTER DISTRIBUTOR By: ---------------------------- ---------------------------- (Authorized signature) (Authorized signature) Name: -------------------------- ---------------------------- (Name of signer, printed) (Name of signer, printed) Title: ------------------------- ---------------------------- (Title of signer, printed) (Title of signer, printed) Date: -------------------------- ---------------------------- Page 4 of 4