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Terms and Conditions

PROOFPOINT CHANNEL PARTNER PROGRAM TERMS AND CONDITIONS

Last Modified: July 2013

Welcome to Proofpoint’s Channel Partner Program! The following terms and conditions, together with any documents they expressly incorporate by reference (collectively, this "Agreement"), governs the activities of anyone acting as a Proofpoint, Inc. (“Proofpoint”) channel partner (“you” or “Channel Partner”). Please read this Agreement before you register to become a Proofpoint Channel Partner. If you accept or agree to this Agreement on behalf of a company or other legal entity, you represent and warrant that you have the authority to bind that company or other legal entity to this Agreement and, in such event, “you” and “your” will refer and apply to that company or other legal entity. By completing the registration process for the Channel Partner Program and by clicking to accept or agree to this Agreement when this option is made available to you, you represent and warrant that you have read, understand, have the legal capacity to, and hereby agree to be legally bound by these terms and conditions. If you have entered into a separate written agreement with Proofpoint, that written agreement will govern your relationship with Proofpoint. Proofpoint may revise and update this Agreement from time to time in its sole discretion by posting such modifications to this Agreement on the Proofpoint Partner Portal with the effective date posted on the top of the Agreement, "Last Modified Date”. Your continued activity as a Channel Partner following the posting of revised Agreement means that you accept and agree to the changes. If the modified Agreement is not acceptable to you, your only recourse is to cease acting as a Channel Partner. All changes are effective immediately when Proofpoint posts them, and apply to all Channel Partner activities thereafter.


1. DEFINITIONS.

1.1. “Appliance(s)” means the hardware appliance(s) containing the Software.

1.2 “Confidential Information” has the meaning set forth herein.

1.3 “Channel Partner Discount” means the discount off the Price List for Channel Partner’s designated classification and level as posted on Proofpoint’s Partner Portal or provided within the Partner Program Guide, which may provide differentiation based on classification, level, registered versus unregistered deals, and product category, among other things. Discounts, levels, deal registration and product categories may be updated at Proofpoint’s sole discretion on its Proofpoint Partner Portal from time to time. Proofpoint authorized discounts are subject to participation and adherence to Proofpoint’s deal registration process. Proofpoint’s deal registration processes are available for review in the applicable Channel Partner Program Guide. You are encouraged to review the Proofpoint Partner Portal at least monthly to see the most current discount tables.

1.4 “Channel Partner Program Guide” means the then current policies and procedures posted on Proofpoint’s Partner Portal or provided to Channel Partner that describe each type of Channel Partner’s (Direct Reseller, Distributor, Managed Service Provider, or Indirect Reseller) participation in Proofpoint’s Channel Program, which is made a part of this Agreement by this reference.

1.5 “Customer” means a customer who purchases Proofpoint Products from Channel Partner or the person or entity to which the Proofpoint Products are ultimately provided.

1.6 “Customer Agreement” means either (i) the clickwrap license agreement between Proofpoint and a Customer that is included in the Proofpoint Products or (ii) a written agreement between Proofpoint and a Customer governing such use of the Proofpoint Product.

1.7 “Demonstration Equipment and/or Services” means Appliances and/or Software used by Channel Partner (i) to demonstrate Proofpoint Products; (ii) to allow potential Customers to evaluate Proofpoint Products; (iii) for Channel Partner’s internal training purposes; and (iv) to provide technical support to Customers.

1.8 “Distributor” means a Proofpoint Channel Partner who is appointed to distribute the Proofpoint Products to Direct Reseller and/or Indirect Resellers in accordance with this Agreement.

1.9 “Distribution Reseller” means a third party appointed by Distributor to resell Proofpoint Products directly to Customers in accordance with this Agreement.

1.10 “Distribution Reseller Agreement” means Distributor’s form of written agreement pursuant to which Distributor appoints distribution resellers to sell the Proofpoint Products directly to Customers in accordance with this Agreement.

1.11 “Documentationmeans the standard user documentation for the Proofpoint Products that Proofpoint makes generally available to its customers.

1.12 “Extension Term” means each additional period for which a Customer Agreement for a subscription based Proofpoint Product, is extended pursuant to this Agreement.

1.13 “Hosted Services” means providing access to the Proofpoint Product to Customer over the internet via Partner’s hosting network from a centralized data center.

1.14 “Indirect Reseller” means a third party appointed by Proofpoint to purchase Proofpoint Products solely from Proofpoint Distributors and resell Proofpoint Products to Customers in accordance with this Agreement.

1.15 “Intellectual Property Rights” means patent rights (including patent applications and disclosures), copyrights, Marks, trade secrets, know-how and any other intellectual property rights recognized in any country or jurisdiction in the world.

1.16 “Initial Term” shall mean the first subscription period of a Customer Agreement for a subscription based Proofpoint Product that is specified on Channel Partner’s purchase order for such Customer.

1.17 “Lead” means the name of a prospective Customer that has not previously acquired Proofpoint Products that is provided to Channel Partner by Proofpoint.

1.18 “Mailbox” means a separate account on a Customer’s e-mail server for the receipt of messages or data within such Customer’s e-mail system or network. Aliases and distribution lists, which are correctly configured as such by Customer, shall not be counted as separate mailboxes provided each person who has access to such aliases and distribution lists has a separate account on a Customer’s email server for the receipt of messages or data within such Customer’s e-mail system or network. For the purposes of any resale of the Proofpoint Products named (i) “Proofpoint Enterprise Governance” and “Proofpoint Secure Share”, such Proofpoint Products shall be sold on the basis of “Named User” which is defined as ‘Customer's employees, agents, contractors, consultants or other individuals who are authorized by Customer to use the applicable Proofpoint Product on behalf of Customer’, and (ii) “Proofpoint Essentials”, such Proofpoint Products shall be sold on the basis of Active Users which is defined as number of users provisioned on Proofpoint Essentials for purposes of email filtering or interface access and as counted by Proofpoint Essentials, and the definition of Mailbox in this Agreement shall not apply and any reference to “Mailbox” shall be deleted and replaced with ‘Named User’ or ‘Active User’, as applicable.”

1.19 “Marks” means Proofpoint’s trademarks, service marks, trade names, service names, logos and designations in or associated with Proofpoint Products or services.

1.20 “Ordering Information” means the following information that must appear on each Channel Partner purchase order: (i) a reference to this Agreement; (ii) the Customer name and contact information (including telephone number and email address); (iii) type, quantity and price of the Proofpoint Products (including the number of Mailboxes purchased); (iv) shipping location, (v) Initial Term; and (vi) requested delivery date.

1.21 “Price Change Effective Date” means the date thirty (30) days after written notice (which may be via email) to Channel Partner by Proofpoint of price changes for the Proofpoint Products or changes to the Channel Partner Discount.

1.22 “Price List” means Proofpoint’s then current price list for the Territory, a current copy of which is posted on Proofpoint’s Partner Portal.

1.23 “Proofpoint Channel Partner Ordering & Payments Policies” means the then current payment and finance policies posted on Proofpoint’s Partner Portal that describe Channel Partner’s financial and credit obligations, which is made a part of this Agreement by this reference.

1.24 “Proofpoint Partner Portal” means the access to the Proofpoint Channel Program documents and information from https://www.proofpoint.com/partners/partner-login.php.

1.25 “Proofpoint Products” means the Proofpoint products and services on the Price List.

1.26 “Prospect” means a prospective sales opportunity that Channel Partner identifies and registers with Proofpoint in accordance with this Agreement.

1.27 “Public Software" means any software that contains, or is derived (in whole or in part) from, any software that is distributed as free software, open source software or similar licensing or distribution models. Software does not include Public Software.

1.28 “Reseller” means a third party appointed by Proofpoint to resell Proofpoint Products to Customers in accordance with this Agreement.

1.29 “Software” means the object code form of the proprietary software products owned or distributed by Proofpoint or provided as a service by Proofpoint, including any updates and upgrades thereto, excluding Public Software.

1.30 “Subscription Fees” mean the annual fees paid by a Customer for the right to use subscription based Proofpoint Products purchased by Customer and receive support during the applicable Term.

1.31 “Term” means the Initial Term of a Customer Agreement and any Extension Term of such Customer Agreement.

1.32 “Territory” means the geographic area in which Channel Partner is permitted to carry out its activities as an authorized channel partner.

2. APPOINTMENT AND GRANT OF LICENSE

2.1 General. Prior to distributing or selling Proofpoint Products, Proofpoint requires that all of its Channel Partners register and qualify with Proofpoint.

2.2 Appointment. Upon Proofpoint’s written approval, Proofpoint will appoint Channel Partner in accordance with the designations set forth in this Section 2.2. Channel Partner hereby accepts such appointment and agrees to provide the Proofpoint Products in accordance with the terms and conditions of this Agreement.

If Channel Partner is designated a “Reseller”, the following applies .

Subject to all the terms of this Agreement and compliance therewith, Proofpoint grants Channel Partner a non-sublicensable, non-transferable, non-exclusive, right to: (i) market, distribute, demonstrate and use the Proofpoint Products under the terms of this Agreement; and (ii) resell the Appliance and/or the Software to Customers located and taking delivery within the Territory solely for such Customers internal use. Channel Partner may resell the Software on a subscription basis and only for use on the number of Appliances, computers and/or servers and Mailboxes which are solely operated and accessed by Customer and for which Channel Partner has paid Proofpoint the applicable Subscription Fees. Nothing herein constitutes a sale of, or transfer of, title to, any Software. If Channel Partner requests that Proofpoint delivers the Proofpoint Products to Channel Partner for delivery to a Customer, Channel Partner shall provide the Proofpoint Products to Customers exactly as ordered and received from Proofpoint and shall not remove, modify or otherwise tamper with the Proofpoint Products or any package containing the Proofpoint Products, other than as expressly permitted under this Agreement. As a condition to purchasing or licensing the Proofpoint Products, the Initial Term for each Customer must be a minimum subscription term of one (1) year, except for Proofpoint Essentials, where the minimum term is one (1) month.


If Channel Partner is designated a “Distributor”, the following applies.

Subject to all the terms of this Agreement and compliance therewith, Proofpoint grants Distributor a non-sublicensable, non-transferable, non-exclusive, right to market and sell Proofpoint Products, solely through Distribution Resellers, to Customers located and taking delivery within the Territory solely for such Customers internal use and for the number of Mailboxes on the purchase order accepted by Proofpoint. Distribution Resellers may only sell the Proofpoint Products to Customers directly and prior to any sales of the Proofpoint Products by a Distribution Reseller, Distributor must execute a Distribution Reseller Agreement with such Distribution Reseller that binds such Distribution Reseller to terms and conditions substantially similar to those in this Agreement. Unless otherwise agreed in writing by Proofpoint, Distributor may not distribute, sell or sublicense Proofpoint Products directly to Customers. Distribution Resellers may sell the Proofpoint Products only on a subscription basis and only for use on the number of Appliances, computers and/or servers and Mailboxes which are solely operated and accessed by Customer and for which Distributor has paid Proofpoint the applicable Subscription Fees. If Distributor requests that Proofpoint delivers a Proofpoint Product to Distributor or a Distribution Reseller for delivery to a Customer, Distributor or the Distribution Reseller shall provide the Proofpoint Product to Customers exactly as ordered and received from Proofpoint and shall not remove, modify or otherwise tamper with such Proofpoint Product. As a condition to purchasing a subscription based Proofpoint Product, the Initial Term for each Customer must be a minimum subscription term of one (1) year, except for Proofpoint Essentials, where the minimum term is one (1) month.

If Channel Parnter is designated a “Managed Service Provider”, the following applies .

Subject to all the terms of this Agreement and compliance therewith, Proofpoint grants Managed Service Provider a following fully paid up, non-exclusive, non-transferable license to install, host, operate on Managed Service Provider’s systems, or access, the Proofpoint Products for the sole purpose of providing outsourcing services to Customer or managing the Proofpoint Products on behalf of Customer or integrating the Proofpoint Products with the Hosted Services.


If Channel Partner is designated an “Indirect Reseller”, the following applies.

Subject to all the terms of this Agreement and compliance therewith, Proofpoint grants Indirect Reseller a non-sublicensable, non-transferable, non-exclusive, right to purchase solely from Distributors and resell to Customers located and taking delivery within the Territory solely for such Customers internal use and for the number of Mailboxes on the purchase order accepted by Proofpoint.

2.3 License Restrictions. Except as otherwise permitted under this Agreement, Channel Partner will not and will not allow any third party to: (i) reverse engineer or otherwise attempt to discover any source code or underlying ideas or algorithms of the Proofpoint Products except to the extent permitted by applicable law, (ii) modify, translate, or otherwise create derivative works of the Proofpoint Products; (iii) copy any Proofpoint Products, in whole or in part, or distribute or transfer Proofpoint Products except as provided herein; (iv) rent, lease, provide or make the functionality of the Software available to third parties by means of hosting, application services provider, service bureau, time sharing or any other type of services without Proofpoint’s express prior written consent; (v) allow the removal, alteration, covering or obscuring of any notice or Mark that appears on the Proofpoint Products or on any copies or media; or (vi) appoint third parties to market, sublicense or otherwise distribute the Proofpoint Products except as otherwise expressly permitted herein.

2.4 Trademark License. Subject to Channel Partner’s compliance with the terms and conditions of this Agreement, Proofpoint grants to Channel Partner a non-exclusive, non-transferable license to use the Marks, during the term of this Agreement, solely in connection with marketing, promotion, resale and distribution of the Proofpoint Products. Any such use of a Mark by Channel Partner must correctly attribute ownership of such Mark to Proofpoint or its suppliers and licensors and must be in accordance with applicable law and Proofpoint’s then current Mark usage guidelines. Upon Proofpoint’s request, Channel Partner’s advertising, marketing or promotional materials in which a Mark is used will be submitted to Proofpoint for its prior written approval, which shall not be unreasonably withheld. Channel Partner will not remove or obscure any Marks on or in the Proofpoint Products as delivered to Channel Partner, and will not attach any additional Marks, logos or trade designations on or to the Proofpoint Products. Channel Partner acknowledges and agrees that Proofpoint owns the Marks and that any and all goodwill and other proprietary rights that are created by or that result from Channel Partner’s use of a Mark hereunder inure solely to the benefit of Proofpoint. Channel Partner will at no time apply to register any Mark, trade name or other designation that is confusingly similar to any Mark. Channel Partner shall promptly advise Proofpoint of the use of any mark infringing any of the Marks. Upon any termination or expiration of this Agreement, Channel Partner will have no further right to use any Mark.

2.5 Ownership. Channel Partner acknowledges and agrees that the Proofpoint Products, and all software programs embodied in the Proofpoint Products, Documentation, any work product and all copyright, patent, trade secret and other proprietary rights therein and thereto shall vest at all times in and are and will remain the sole and exclusive property of Proofpoint and its suppliers or licensors, as applicable.

2.6 Reserved Rights. Proofpoint reserves the right, from time to time, and without obligation or liability to Channel Partner, to: (i) change the Proofpoint Products; (ii) add to or delete from the list of the Proofpoint Products specified in the Price List; (iii) change or terminate the level or type of service or support that Proofpoint makes available for the Proofpoint Products; and (iv) update or modify the Channel Partner Program Guide; provided, that any such changes will not be effective until thirty (30) days after written notice (which may be via email) of any such changes. Proofpoint reserves the right to market the Proofpoint Products, directly or indirectly, to any end user or customer worldwide, including through distribution channels, including distributors, original equipment manufacturers, resellers, and dealers.

2.7 Public Software. Use of Public Software is subject to the terms and conditions of the license agreement provided with the Public Software. In the event no such agreement is provided, the Public Software is provided "AS IS" and Proofpoint (i) makes no warranty of any kind or nature regarding Public Software; and (ii) shall in no event be liable to any party for any damages which in any way arise out of or relate to Public Software. To the extent applicable for certain Public Software, Proofpoint will make the source code available, upon Channel Partner’s written request. This offer to obtain a copy of certain Public Software source code is valid for three years from the date of delivery of the applicable Public Software.

3. OBLIGATIONS OF CHANNEL PARTNER

3.1 Compliance with Channel Partner Program Guide. Channel Partner shall comply with the applicable Channel Partner Program Guide.

3.2 Compliance with Proofpoint Channel Partner Ordering & Payments Policies. Channel Partner shall comply with the Proofpoint Channel Partner Ordering & Payments Policies.

3.3 Channel Partner’s Business Practices. Channel Partner shall (i) comply with all applicable laws and regulations, (ii) avoid deceptive, misleading or unethical practices, and (iii) conduct business in a manner that reflects favorably at all times on the Proofpoint Products and Proofpoint’s goodwill and reputation.


4. REPRESENTATIONS AND WARRANTIES

4.1 Channel Partner Warranties. Channel Partner represents and warrants that: (i) Channel Partner has the unrestricted right and authority to enter into and perform this Agreement; (ii) no consent of any other person, entity or governmental authority or agency is needed to market or re-sell the Proofpoint Products as contemplated hereunder; and (iii) its use or resale or sublicensing of the Proofpoint Products does not and will not violate any applicable laws, including without limitation any applicable competition or antitrust


4.2 Channel Partner Conduct and Compliance with Laws.

4.2.1 Conduct. Channel Partner shall not engage in any deceptive, misleading or unethical practices that are or might be detrimental to Proofpoint, the Proofpoint Products or any third party, and otherwise shall conduct its business in its own name and in such a manner as will be reasonably expected to reflect favorably at all times on the Proofpoint Products and the good name, goodwill and reputation of Proofpoint.

4.2.2 Foreign Corrupt Practices Act; Compliance with Law. Channel Partner has an obligation to comply with all applicable laws and regulations which apply from time to time to the promotion and sale of Proofpoint Products and any applicable Proofpoint goods and services, including but not limited to the Foreign Corrupt Practices Act, all US and international anti-bribery laws and all US export, trade and sanctions programs laws. Neither Channel Partner nor any of its employees, contractors or agents may make an offer, payment, promise to pay, or authorize payment, or offer a gift, promise to give, or authorize the giving of anything of value for the purpose of influencing an act of decision of an official of any foreign government or the U.S. government (including a decision not to act) or inducing such a person to use his/her influence to affect any such governmental act or decision in order to assist in obtaining, retaining or directing any business. A foreign governmental official shall include any person holding an executive, legislative, judicial or administrative office, whether elected or appointed, or of any public international organization, such as the United Nations or the World Bank, or any person acting in any official capacity for or on behalf of such government, public enterprise or state-owned business, any political party or party official, any political candidate or any person or entity who Channel Partner knows or has reason to believe will give part of any payment to any of the aforementioned categories of people for such purpose. Should Channel Partner have any further questions about FCPA, Channel Partner may visit the Department of Justice website at www.usdoj.gov/criminal/fraud/fcpa.

4.2.3. Export Control. Channel Partner understands and acknowledges that Proofpoint is subject to regulation by agencies of the United States government, including but not limited to, the U.S. Department of Commerce, which prohibits export or diversion of certain products and technology to and business dealings with certain countries, territories and entities. Channel Partner warrants that (i) it will comply with applicable laws, including export, re-export and foreign policy controls and restrictions (including any applicable U.S. sanctions programs) to ensure that neither the Proofpoint Products nor any direct product thereof or technical data related thereto is exported or re-exported directly or indirectly in violation of any such laws, or used for any purposes prohibited by any such laws; and (ii) it will implement reasonable reseller, customer opportunity, lead, purchase order, shipping and/or delivery screening processes to ensure that it is in compliance with such laws and regulations and to ensure that it does not introduce any denied person or entity into Proofpoint systems.

4.2.4. Governmental Approvals. If applicable, Channel Partner represents and warrants that it has obtained all required approvals of the government within a given territory of distribution in connection with this Agreement and that the provisions of this Agreement and the rights and obligations of the parties hereunder, are enforceable under the laws within the territory of distribution.

4.3 Proofpoint Warranty. Proofpoint has and shall have all requisite ownership, rights and licenses to perform its obligations under this Agreement fully as contemplated hereby and to grant to Channel Partner all rights specified herein with respect to the Proofpoint Products and intellectual property rights to be granted hereunder. This Agreement constitutes a valid and binding obligation of Proofpoint enforceable in accordance with its terms.

4.4 Limited Software Warranty. Proofpoint warrants only to Channel Partner that, for a period of ninety (90) days after the Software is provided to Channel Partner, the Software will be capable of performing in all material respects in accordance with the functional specifications set forth in the Documentation. As Channel Partner’s sole and exclusive remedy and Proofpoint’s entire liability for any breach of the foregoing warranty, Proofpoint will, at its option: (i) promptly correct any Software that fails to meet this limited warranty; (ii) provide Channel Partner with a reasonable procedure to circumvent the nonconformity; or (iii) terminate the license for the non-conforming Software. If Proofpoint terminates the license under this Section 4.4, Proofpoint shall reimburse Channel Partner for any amounts paid to Proofpoint for such Software.

4.5 Limited Appliance Warranty. Proofpoint warrants only to Channel Partner that the Appliance will be free from defects in materials and workmanship, under normal intended use, for one year from the original shipment date. Channel Partner’s sole and exclusive remedy and Proofpoint’s entire liability for any breach of the foregoing warranty is to ship a replacement Appliance. If the Appliance is damaged due to negligence or neglect, Channel Partner will be responsible for all shipping and repair costs. Otherwise, Channel Partner will be responsible for shipping costs to Proofpoint and Proofpoint will be responsible for shipping the replacement Appliance to Channel Partner. At the time of shipping, Proofpoint will issue an invoice to Channel Partner for the replacement Appliance. Proofpoint will issue a credit memo against such invoice upon receipt of the failed Appliance. Any Appliance that is replaced becomes the property of Proofpoint. Proofpoint will not be responsible for Channel Partner’s or any third party’s software, firmware, information, or data contained in or stored on any Appliance returned to Proofpoint, whether under warranty or not.

4.6 Disclaimer and Indemnity. The Proofpoint products are warranted only to Channel Partner, and Channel Partner shall not extend any warranties for or on behalf of Proofpoint or Proofpoint suppliers or licensors to Customers or any other third parties.

4.7 Warranty Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH ABOVE, PROOFPOINT AND PROOFPOINT SUPPLIERS AND LICENSORS DISCLAIM ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, INCLUDING WITHOUT LIMITATION REGULATORY COMPLIANCE, PERFORMANCE, ACCURACY, RELIABILITY, AND NONINFRINGEMENT. PROOFPOINT DOES NOT WARRANT THE ACCURACY OF THE INTENDED EMAIL BLOCKING OF ANY MAIL MESSAGE, THE SOFTWARE OR APPLIANCE WILL MEET CHANNEL PARTNER’S OR CUSTOMER REQUIREMENTS OR THAT NO EMAIL WILL BE LOST OR THAT THE SOFTWARE WILL NOT GIVE FALSE POSITIVE OR FALSE NEGATIVE RESULTS. PROOFPOINT DOES NOT WARRANT THE OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE. THIS DISCLAIMER OF WARRANTY CONSTITUTES AN ESSENTIAL PART OF THIS AGREEMENT. SOME STATES DO NOT ALLOW LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY LASTS SO THE FOREGOING LIMITATIONS MAY NOT APPLY TO CHANNEL PARTNER.

5. CONFIDENTIALITY

5.1 Confidential Information. As used herein, "Confidential Information" means all confidential and proprietary information of a party ("Disclosing Party") disclosed to the other party ("Receiving Party"), whether orally or in writing, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure, including the terms and conditions of this Agreement (including pricing and other terms reflected in Schedules), the Software, passwords and access controls provided by Proofpoint for access to the Proofpoint Products business and marketing plans, technology and technical information, product designs, and business processes. Confidential Information shall not include any information that: (i) is or becomes generally known to the public without breach of any obligation owed to Disclosing Party; (ii) was known to Receiving Party prior to its disclosure by Disclosing Party without breach of any obligation owed to Disclosing Party; (iii) was independently developed by Receiving Party without breach of any obligation owed to Disclosing Party; or (iv) is received from a third party without breach of any obligation owed to Disclosing Party.

5.2 Disclosure. Receiving Party shall not disclose or use any Confidential Information of Disclosing Party for any purpose outside the scope of this Agreement, except with Disclosing Party's prior written consent. Receiving Party shall protect the confidentiality of Disclosing Party's Confidential Information in the same manner that it protects the confidentiality of its own confidential information of like kind (but in no event using less than reasonable care). Receiving Party shall promptly notify Disclosing Party if it becomes aware of any actual or reasonably suspected breach of confidentiality of Disclosing Party's Confidential Information.

5.3 Authorized Disclosure. If Receiving Party is compelled by law to disclose Confidential Information of Disclosing Party, it shall provide Disclosing Party with prior notice of such compelled disclosure (to the extent legally permitted) and reasonable assistance, at Disclosing Party's cost, if Disclosing Party wishes to contest the disclosure.

5.4 Injunctive Relief. If Receiving Party discloses (or threatens to disclose) any Confidential Information of Disclosing Party in breach of confidentiality protections hereunder, Disclosing Party shall have the right, in addition to any other remedies available to it, to seek injunctive relief to enjoin such acts, it being acknowledged by the parties that any other available remedies may be inadequate.

5.5 Termination of Agreement. Upon any termination of this Agreement, the Receiving Party shall continue to maintain the confidentiality of the Disclosing Party's Confidential Information and, upon request, return to the Disclosing Party or, (at the Disclosing Party's election), destroy all materials containing such Confidential Information.


6. INDEMNIFICATION

6.1 General Indemnity. Each party shall defend the other in, and indemnify the other against, any claim or action of a third party resulting from the gross negligence or willful misconduct of the indemnifying party or its employees, agents, or representatives, bodily injury, death or damage to tangible property or claims based on violation of any applicable law or regulation.

6.2 Proofpoint Intellectual Property Indemnity. Proofpoint will (i) defend Channel Partner against any suit or proceeding by a third party to the extent based on a rightful claim that the Proofpoint Products in the form created by Proofpoint and sold to Channel Partner pursuant to this Agreement (the “Indemnified Products”) directly infringes any valid U.S. patent or copyright, in the Territory, and (ii) pay any damages awarded in such suit or proceeding as a result of such claim (or pay any settlement of such claim), provided that Channel Partner will promptly notify Proofpoint in writing of the third party claim, suit or proceeding (in any event, within thirty (30) days after Channel Partner becomes aware or reasonably should have been aware of such claim); authorizes and allows Proofpoint to have sole control of the defense and/or settlement of the claim; and provides any information, assistance and other cooperation reasonably requested by Proofpoint in connection with the claim, suit or proceeding.

6.3 Injunctions. In the event of a claim relating to an Indemnified Product, Proofpoint will, at its sole option and expense: (a) procure for Channel Partner the right to continue to use and resell and, if and as applicable, for Customers the right to use the Indemnified Products under the terms of this Agreement; (b) replace or modify the Indemnified Products to be (or to make it more likely to be) non-infringing; or (c) if the foregoing options are not reasonably practicable, then Proofpoint may terminate Channel Partner’s rights to use and resell Indemnified Products and refund all amounts paid by Channel Partner to Proofpoint attributable to Customers’ future usage or access to the Indemnified Products hereunder.

6.4 Indemnity Exclusions. Proofpoint shall have no liability for, and the aforementioned Proofpoint obligations shall not apply to any claim based on or relating to (1) the use of the Indemnified Products in combination with any other product, service or device, if such infringement claim would have been avoided by the use of the Indemnified Products without such other product, service or device; (2) any modification or adaptation to the Indemnified Products; (3) use or resale of an Indemnified Products other than as expressly authorized pursuant to this Agreement or pursuant to applicable Proofpoint Documentation; (4) use or resale of the Indemnified Products by Channel Partner after Proofpoint has made available to Channel Partner a modified version or replacement for the Indemnified Products or has provided notice to Channel Partner that a claim of infringement has been or may be made with respect to the Indemnified Product; (5) specifications, instructions, features, functions or designs or other elements provided by or requested by Channel Partner; or (6) the practice of any process or method relating to the Customers’ use of the Indemnified Products..

6.5 Limitation. THE FOREGOING PROVISIONS OF THIS SECTION 6 SET FORTH PROOFPOINT’S SOLE AND EXCLUSIVE OBLIGATIONS AND CHANNEL PARTNER’S SOLE AND EXCLUSIVE REMEDIES, WITH RESPECT TO, ANY CLAIMS REGARDING THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OF ANY KIND.

6.6 Channel Partner Indemnity. Channel Partner agrees to defend, indemnify and hold Proofpoint and its directors, employees, and agents harmless from and against all liabilities, damages, costs, fees and expenses, including reasonable attorneys fees, incurred as a result of: (i) any representations, warranties, guarantees, or other written or oral statements made by or on behalf of Channel Partner relating to the Proofpoint Products other than those specified in the Documentation or as expressly authorized by Proofpoint in writing; (ii) the failure of Channel Partner to provide the Proofpoint Products in accordance with this Agreement; or (iii) any use by a Customer of any product not licensed by Proofpoint but used in conjunction with the Proofpoint Products, if liability would have been avoided by the exclusive use of the Proofpoint Products. Channel Partner’s indemnification obligations hereunder are contingent upon Proofpoint (a) promptly giving written notice of the claim to Channel Partner; (b) giving Channel Partner sole control of the defense and settlement of the claim (provided that Channel Partner may not settle or defend any claim unless it unconditionally releases Proofpoint of all liability); and (c) provides to Channel Partner, at Channel Partner‘s cost, all reasonable assistance.

7. LIMITATION OF LIABILITY.

7.1 Limitation of Liability. EACH PARTY’S AGGREGATE LIABILITY HEREUNDER SHALL BE LIMITED TO DIRECT DAMAGES UNDER THIS AGREEMENT THAT SHALL IN NO EVENT EXCEED THE TOTAL AMOUNT ACTUALLY PAID OR PAYABLE BY CHANNEL PARTNER TO PROOFPOINT IN THE 12 MONTHS PRIOR TO THE ACT OR OMISSION GIVING RISE TO THE CLAIM. TO THE EXTENT PERMITTED BY APPLICABLE LAW, WHATEVER THE LEGAL BASIS FOR THE CLAIM, NEITHER PARTY, NOR ANY OF ITS AFFILIATES OR SUPPLIERS, WILL BE LIABLE FOR ANY INDIRECT DAMAGES (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES, DAMAGES FOR LOST PROFITS OR REVENUES, BUSINESS INTERRUPTION, OR LOSS OF BUSINESS INFORMATION) ARISING IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF SUCH POSSIBILITY WAS REASONABLY FORESEEABLE.

7.2 Exceptions to Limitation of Liability. THE FOREGOING LIMITATION OF LIABILITY IN SECTION 7.1 SHALL NOT APPLY TO ANY BREACH OF THE INTELLECTUAL PROPERTY RIGHTS IN SECTION 2, ANY BREACH OF SECTION 5 (“CONFIDENTIALITY”), ANY BREACH OF SECTION 4.1 (REPRESENTATIONS AND WARRANTIES), ANY BREACH OF EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 6, ANY BREACH OF CHANNEL PARTNER’S OBLIGATION TO MAKE PAYMENTS PURSUANT TO THIS AGREEMENT, ANY DAMAGES CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY OR ITS AGENTS, ANY DAMAGES ARISING FROM BODILY INJURY OR DEATH THAT IS CAUSED BY A PARTY’S NEGLIGENCE OR THAT OF ITS EMPLOYEES OR AGENTS; OR ANY DAMAGES CAUSED BY A PARTY’S FRAUDULENT MISREPRESENTATION TO THE OTHER PARTY.

7.3 Disclaimer of Liability to Customer. PROOFPOINT AND ANY THIRD PARTY PROVIDER TO PROOFPOINT DISCLAIMS ANY AND ALL LIABILITY TO ANY CUSTOMER UNDER THIS AGREEMENT.


8. TERM AND TERMINATION

8.1 Termination for Cause. Either party may terminate this Agreement at any time if (i) a receiver is appointed for the other party or its property, (ii) the other party makes an assignment for the benefit of its creditors generally, (iii) proceedings are commenced by or for the other party under any applicable bankruptcy, insolvency, or debtor’s relief law, (iv) the other party liquidates or dissolves or attempts to do so, (v) the other party assigns or purports to assign or transfer this Agreement in breach of its provisions, or (vi) the other party commits any other breach of a material obligation hereunder which it fails to cure within 15 days of written notice or which is by its nature incurable. Proofpoint may terminate this Agreement if Channel Partner is merged or consolidated, sells all or substantially all of its assets, or is subject to any substantial change in management or control.

8.2 Effect of Termination or Expiration. Channel Partner’s right to resell the Proofpoint Products to new Customers or renew terms of existing Customer Agreements for Extension Terms will terminate immediately upon the effective date of termination or expiration of this Agreement. Upon termination of this Agreement any licenses for the Proofpoint Products sold by Channel Partner in accordance with this Agreement prior to date of termination shall continue in accordance with the terms of the Customer Agreement, as long as there is no breach thereof. Except as otherwise provided in this Section 8.2, upon termination or expiration of this Agreement for any reason: (i) Channel Partner shall immediately cease using and shall deliver to Proofpoint, the Documentation, as well as any unused sales literature and other written information and materials supplied by Proofpoint pursuant to this Agreement or that contain Proofpoint’s Marks; (ii) Channel Partner shall immediately cease to identify itself as a provider of Proofpoint Products or otherwise affiliated in any manner with Proofpoint; (iii) no later than 10 days after expiration or termination, Channel Partner shall return all Proofpoint Confidential Information; (iv) the due dates of all outstanding invoices to Channel Partner for the Proofpoint Products will automatically be accelerated so they become due and payable on the date of termination or expiration, even if longer terms had been provided previously; (v) all purchase orders or portions thereof remaining undelivered on the date of termination or expiration will automatically be canceled; and (vi) Channel Partner will cease using the Marks and promoting and advertising the Proofpoint Products. Upon termination of this Agreement and request by Proofpoint, Channel Partner will cooperate with, and provide reasonable assistance to Proofpoint in order to facilitate an undisrupted transition of the support of the Proofpoint Products to Proofpoint or another organization designated by Proofpoint. If Channel Partner transitions support in accordance with the foregoing sentence, Channel Partner will pay to Proofpoint pro-rated unused Subscription Fees received from such Customers. If this Agreement is terminated by Channel Partner or by Proofpoint and Proofpoint does not request Channel Partner to transition support as specified above, (a) Channel Partner shall continue to provide support to Customers for the remaining subscription terms of existing Customer Agreements; and (b) Channel Partner shall continue to pay support fees to Proofpoint in accordance with the terms of this Agreement; and (c) Proofpoint shall continue to provide support for the Proofpoint Products in accordance with its support obligations specified in this Agreement. Upon the earlier of (i) termination of this Agreement and transition of Channel Partner’s support obligations to Proofpoint, or (ii) expiration of Channel Partner’s Customer support obligations specified in this Section 8.2 Channel Partner shall immediately cease using and shall deliver to Proofpoint or destroy, all copies of the Software (including partial copies) and the Documentation, and return any Appliances provided by Proofpoint for which Channel Partner has not paid the applicable fees.

8.3 No Damages upon Termination. Channel Partner acknowledges and agrees that Proofpoint will not be liable to Channel Partner for damages of any kind that Channel Partner may incur as a result of any termination of this Agreement by Proofpoint, as permitted hereunder, or the expiration of this Agreement. CHANNEL PARTNER WAIVES ANY RIGHTS IT MAY HAVE TO RECEIVE ANY COMPENSATION OR INDEMNITY UPON TERMINATION OR EXPIRATION OF THIS AGREEMENT UNDER THE LAWS OF THE TERRITORY OR OTHERWISE, OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT.

8.4 Obligations on Termination. In the event of the termination or expiration of this Agreement, the provisions of this Agreement which by their nature extend beyond the expiration or termination of this Agreement, including but not limited to Sections: 5 (Confidentiality), 7 (Limitation of Liability), 8 (Term and Termination) and 9 (Miscellaneous), as well as any accrued rights to payment shall remain in effect beyond such termination or expiration until fulfilled. All other rights and obligations, including without limitation Channel Partner’s rights under Sections 2.2 and 2.4, will terminate.

9. MISCELLANEOUS

9.1 Assignment. Channel Partner may not assign or transfer this Agreement, in whole or in part, by operation of law or otherwise, without Proofpoint’s express prior consent. Any attempt to assign or transfer this Agreement, without such consent, will be null and of no effect. For purposes of this Agreement, a change of control will be deemed to be an assignment. Subject to the foregoing, this Agreement will bind and inure to the benefit of each party's permitted successors and assigns.

9.2 Independent Contractors. The relationship of Proofpoint and Channel Partner established by this Agreement is that of independent contractors. This Agreement does not give either party the power to direct and control the day to day activities of the other, nor create any fiduciary relationship between the parties nor deem or constitute the parties as partners, joint venturers, coowners, principal-agent, employer-employee or otherwise participants in a joint or common undertaking, or allow either party to create or assume any obligation on behalf of the other party for any purpose whatsoever.

9.3 Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes any prior and contemporaneous oral or written understanding as to the subject matter hereof. Notwithstanding any language to the contrary therein, no terms stated in a purchase order or in any other order document (other than a statement of work or other order document mutually executed by authorized signatories and expressly incorporated herein) shall be incorporated into this Agreement, and all such terms shall be void.

9.4 Amendments; Waivers. This Agreement may be modified only in writing signed by both parties. A waiver of any provision or breach is no waiver of any other provision or breach.

9.5 Force Majeure. Neither party will be liable to the other for its failure to perform any of its obligations hereunder during any period in which such performance is delayed by circumstances beyond its reasonable control including, but not limited to earthquake, fire, flood, war, embargo, strike, riot, inability to secure materials and transportation facilities, or the intervention of any governmental authority.

9.6 Verifying Compliance. Channel Partner shall keep all usual and proper books and records relating to its performance of this Agreement during the term of this agreement and for three (3) years thereafter (or longer as may be required by law or regulation). This standard takes into account the accounting rules, regulations, authoritative pronouncements, principles and practices accepted in Channel Partner’s jurisdiction. During this same period, Proofpoint’s audit team may conduct audits of Channel Partner’s applicable books, records, reports, operations, processes and facilities during any selected period to verify Channel Partner‘s compliance with the terms of this Agreement. Channel Partner will promptly correct any errors and omissions disclosed by the audits. Any audit will be conducted during Channel Partner’s normal business hours. It will not interfere unreasonably with Channel Partner’s normal business activities. Channel Partner will provide Proofpoint with access to all applicable books, records, operations, processes and facilities that Proofpoint may need to review. If an audit is conducted with notice, Channel Partner will have all applicable books, records and operations available to Proofpoint at the beginning of the audit. This does not limit Proofpoint’s right to seek other remedies as well. If the audit team makes any commercially reasonable recommendations to Channel Partner on record keeping, it will implement the recommendations within a timeframe to which both parties agree. Within thirty (30) days after a request from Proofpoint, Channel Partner shall provide to Proofpoint a written statement from an officer of Channel Partner certifying that Channel Partner is in compliance with all material terms of this Agreement, including without limitation, its reporting and fee payment obligations.

9.7 Publicity. The terms of this Agreement are confidential. No press release or other like publicity regarding this Agreement may be made without the other party’s approval.

9.8 Notices. All notices and other communications hereunder will be given in writing and delivered (i) by personal delivery, by prepaid overnight or courier service to the addresses set forth herein, or (ii) by facsimile to such facsimile number as may be provided in writing by a party. Notices are deemed given on receipt or attempted delivery (if receipt is refused). The foregoing notwithstanding, Price Change and new product notices to Channel Partner will be given via email.

9.9 Governing Law. This Agreement shall be governed and construed under the laws of California without reference to conflict of law principles. The parties expressly agree that the United Nations Convention on Contracts for the International Sale of Goods will not apply. Jurisdiction and venue of any dispute or court action arising from or related to this Agreement or the Software shall lie exclusively in or be transferred to the courts the County of Santa Clara, California, and/or the United States District Court for the Northern District of California. You hereby consent and agree not to contest, such jurisdiction, venue and governing law. Notwithstanding the foregoing, (i) if Channel Partner’s Territory is located in Canada, this Agreement is governed by the laws of the Province of Ontario, Canada. In such case each of the parties to this Agreement irrevocably attorns to the jurisdiction of the courts of the Province of Ontario and further agrees to commence any litigation that may arise under this Agreement in the courts located in the Judicial District of York, Province of Ontario; and (ii) if Channel Partner’s Territory is located in the European Union, this Agreement is governed by the laws of England and Wales. In such case each of the parties to this Agreement irrevocably attorns to the jurisdiction of the courts of London, England and further agrees to commence any litigation that may arise under this Agreement in the courts of London, England. The official language of this Agreement is English. For purposes of interpretation, or in the event of a conflict between English and versions of this Agreement in any other language, the English language version shall be controlling.

9.10 Attorney’s Fees. In the event of any litigation or arbitration hereunder, the arbitrator or court shall award costs and reasonable attorneys’ fees to the prevailing party.

9.11 Injunctive Relief. Each party acknowledges that any breach of its obligations with respect to the proprietary rights of the other party or such party's suppliers or licensors may cause such other party irreparable injury for which there may be inadequate remedies at law and that such other party and its suppliers and licensors will be entitled to seek injunctive relief, in addition to all other remedies available to it.

9.12 Severability. The terms of this Agreement are severable. If any term hereof is held invalid, illegal, or unenforceable for any reason whatsoever, such term will be enforced to the fullest extent permitted by applicable law, and the validity, legality, and enforceability of the remaining terms shall not in any way be affected or impaired thereby.


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