DISTRIBUTION AGREEMENT

Exhibit 10.4

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (“Agreement”), is by and between INGRAM MICRO INC. (“Ingram Micro”), a Delaware corporation, located at 1600 E. St. Andrew Place, Santa Ana, California 92705, and WEBSENSE, INC., a Delaware corporation (“Vendor”), located at 10240 Sorrento Valley Road, San Diego, California 92121. The effective date (“Effective Date”) of this Agreement shall be the date of the last signature set forth below.

1.1 Produc t. Vendor agrees to authorize Ingram Micro and/or its resellers to market and distribute the Vendor’s proprietary software applications (“Software”) together with subscriptions to access certain Vendor-owned proprietary databases of URL addresses, software applications or other content (“Databases”) (collectively the “Products”), subject to the terms set forth in this Agreement including its exhibits, solely to resellers (“Resellers”) and not directly to customers of such Resellers (“End-Users”). Additional terms are included in Exhibits A – D. Vendor agrees that each Reseller will be subject to Ingram Micro’s standard Sales Terms and Conditions, located at www.ingrammicro.com, at the time of purchase for such Product and such Product is also subject to Vendor’s then –current Subscription Agreement that each End-User must accept to enable Product download. Ingram Micro agrees to use reasonable efforts to promptly notify Vendor of any breach by any Reseller or End-User of any term of the Subscription Agreement of which it becomes aware and to take such action as is reasonably requested by Vendor to protect Vendor interests in the Products. Ingram Micro will not modify or copy any Product; however, Ingram Micro may bundle the Software along with other software or hardware and distribute the Software to its Resellers. No minimum purchase is required and no ordering restrictions shall apply. Vendor shall provide Ingram Micro with not less than thirty (30) days prior written notice of Product discontinuance including alternatives and cessation of Product production. Vendor agrees to provide information regarding new Products, Price changes, Product changes, or Product discontinuance in an electronic format determined by Ingram Micro and mutually acceptable to Vendor.

1.2 Territory. Vendor grants to Ingram Micro and its Affiliates as defined above the exclusive (as set forth below), nontransferable right to market and distribute the Products to its Resellers in the United States and Canada (the “Territory”). Unless otherwise agreed between the parties, this exclusivity shall be effective for one (1) year after the execution of this Agreement; thereafter, Vendor grants to Ingram Micro and its Affiliates the nontransferable right to market and distribute the Products to its Resellers in the United States and Canada on a non-exclusive basis. Notwithstanding the foregoing, although Vendor agrees to use commercially reasonable efforts to direct its resellers to Ingram Micro, this exclusivity shall apply only to Vendor’s sale of its Products through other distributors in the Territory, not to sales by Vendor directly to its Resellers or its other customers or when its Products are a component of another product. Additionally, the parties agree that they will meet approximately one hundred eighty (180) days after the execution of this Agreement to review the exclusivity arrangement and if this arrangement is not working to the parties’ mutual satisfaction, mutually agree to terminate the one (1) year exclusivity requirement. Any Ingram Micro Affiliate located within the United States or Canada that elects to distribute Products in its local region will determine if it will purchase Products from Ingram Micro in accordance with this section or purchase Products directly from Vendor. Any other Ingram Micro Affiliate outside of the United States or Canada that elects to distribute Products in its local region will determine if it will purchase Products from Ingram Micro in accordance with this section or purchase Products directly from Vendor’s affiliate, Websense International Limited (“Vendor’s Affiliate”). If the Affiliate chooses to purchase Products directly from either Vendor or Vendor’s Affiliate, the Affiliate and Vendor (or Vendor’s Affiliate) shall enter into a separate agreement governing the terms of such purchases.

The initial term of this Agreement is one (1) year from the Effective Date. Unless terminated as set forth in Section 11.20 below, this Agreement will automatically renew for successive one (1) year terms unless either party provides written notice of termination no less than thirty (30) days prior to the anniversary date.

3.1 Product Availability. Vendor shall provide Ingram Micro with new Product development and Product revisions information prior to notification of new Product announcements or introductions. Vendor shall use commercially reasonable efforts to notify Ingram Micro of new Product or Product revisions introduction at least thirty (30) days prior to marketplace introduction, but under no circumstances will Vendor notify Ingram Micro of any new Product or Product revisions later than Vendor’s other distributors or resellers, and shall make such Product available for distribution by Ingram Micro no later than the date it is first offered for general sale in the marketplace.

Ingram Micro Inc. Distribution Agreement

3.2 Information. Vendor agrees to provide the following information to Ingram Micro:

(a) Data, images, photos, logos, and other varieties of information regarding Vendor’s products and services provided by Vendor to Ingram Micro (collectively “Information”) solely for distribution or use by Ingram Micro through its catalog, the World Wide Web (internet), Intranet, Fax, CD-ROM, Floppy disk, broadcast, e-mail, and other electronic or printed media (“Electronic Resources”). Vendor hereby grants Ingram Micro a royalty-free, non-exclusive worldwide license to market, sub-license, distribute, display, perform, transmit and promote the Information in furtherance of this Agreement through the Electronic Resources, provided Ingram Micro complies with Vendor’s guidelines for use of the Information. Vendor agrees that it is both necessary and of mutual benefit to the parties that the Information be as current and error-free as is commercially feasible. Vendor agrees to update the Information regularly. Both parties agree that the Electronic Resources and Information contained therein will be made available to users registered with Ingram Micro. Information may also be made available to Ingram Micro customers, non-registered users, or other entities or persons transacting business with Ingram Micro. Ingram Micro shall not be required to screen, edit, or monitor Information prior to its distribution by Electronic Resources, but may do so at its discretion so long as it complies with Vendor’s guidelines for use of the Information.

(b) Public information reasonably requested by Ingram Micro from time to time for the purpose of assessing Vendor’s financial position. Such information includes, without limitation, quarterly financial statements including no less detail than as required by the U.S. Securities and Exchange Commission in a 10-Q statement provided that such information is made available in the public domain.

(c) Notification of changes to Vendor’s name, address, any sale of substantially all of its assets or any sale of any subsidiary or affiliate of Vendor or of any change in the control of Vendor, whether effected by merger or stock sale all of which shall be provided promptly upon public disclosure of such information.

3.3 Information. Ingram Micro agrees to provide the following information to Vendor:

(a) Public information reasonably requested by Vendor from time to time for the purpose of assessing Ingram Micro’s financial position. Such information includes, without limitation, quarterly financial statements including no less detail than as required by the U.S. Securities and Exchange Commission in a 10-Q statement provided that such information is made available in the public domain.

(b) Notification of changes to Ingram Micro’s name, address, any sale of substantially all of its assets or any sale of any subsidiary or affiliate of Ingram Micro or of any change in the control of Ingram Micro, whether effected by merger or stock sale all of which shall be provided promptly upon public disclosure of such information.

3.4 Marketing Support. Vendor shall provide to Ingram Micro, its employees, and its customers reasonable amounts of sales literature, advertising materials and training to support Product sales and reasonable amounts of demonstration Product and training to support Product sales, all at no cost to Ingram Micro.

3.5 Reporting.

(a) Ingram Micro. Ingram Micro will provide Vendor access to standard monthly sales-out and weekly inventory reports in an electronic format as determined by Ingram Micro. If Vendor requests non-standard sales data or other information (“Data”) such Data may be subject to the additional terms of a separate fee-based Point of Sale Report License Agreement (“POS Agreement”).

(b) Vendor. Vendor will provide Marketing Reports in the form as mutually agreed between the parties including Ingram Micro’s market share with Vendor and co-op Vendor reports including expenditures to date. Reports shall be provided within thirty (30) days after the end of the applicable quarter or as mutually agreed upon by the parties.

4.1 Favorable Terms. Vendor agrees that the prices, discounts, and marketing funds (collectively “Prices”), offered to Ingram Micro under this Agreement are now and should continue to be at least as favorable as those offered to any of Vendor’s distributors of substantially similar size and that purchase similar quantities of Products and that compete with Ingram Micro in the Territory (“Ingram Micro Competitors”). If Vendor offers more favorable Prices to any Ingram Micro Competitors, it shall extend such Pricing to Ingram Micro.

4.2 Special Pricing. Vendor may offer special Product pricing, discounts, rebates or incentives (“Special Pricing”) to Ingram Micro and/or to Ingram Micro customers. Vendor agrees that all such Special Pricing shall be designated as a marketing incentive. Ingram Micro shall have no obligation to recover any such Special Pricing from a customer, or reimburse Vendor for any such Special Pricing, in the event (i) the customer returns Product to Ingram Micro after receiving written approval from Vendor for such return or Ingram Micro returns Product to Vendor pursuant to Vendor’s prior written approval of said return that may have been the subject of Special Pricing or (ii) Ingram Micro’s customer fails to comply with Special Pricing terms. Notwithstanding the foregoing, all Special Pricing will be subject to a separate agreement between the parties.

Ingram Micro Inc. Distribution Agreement

4.3 Subscription Fees. Subscription Fees will be Vendor’s then current published list price attached as described in Exhibit D which may be updated from time to time.

4.4 Purchase Orders (“PO”). Products shall be ordered by Ingram Micro by submitting purchase orders which specify the following Reseller and End-User information: name of Reseller and End-User companies, the name and e-mail address of End-User contact, the Vendor part number that corresponds to the Product ordered, the SKU identifying the number of Seats for each End-User which shall have a unique identifier as agreed between the parties, Ingram Micro invoice number and price per SKU and the start and end date of the applicable subscription(s). Ingram Micro agrees that all orders of five thousand (5,000) seats or more must be accompanied by Vendor’s Subscription Order Form, the current form of which is attached as Exhibit B that has been signed by the End-User. The parties agree that it is the responsibility of the Vendor to verify that the Vendor’s Subscription Order Form has been signed prior to acceptance of the applicable Purchase Order. All purchase orders placed with Vendor for Products by Ingram Micro shall be subject to acceptance in writing by Vendor referencing Ingram Micro’s Purchase Order Number; however, Vendor shall be deemed to have accepted a Purchase Order if it fulfills such Purchase Order. Vendor agrees to consider any return requests by Ingram Micro or Ingram Micro’s customers on a case-by-case basis. Vendor is under no obligation to accept returns under this Agreement.

5.1 Use and Ownership of Marks. Each party recognizes the other party’s ownership and title to its respective trademarks, logos, service marks and trade names, including those related to the Products and the Information, whether or not registered (collectively “Marks”). Each party grants to the other party a limited license to use such party’s Marks in connection with the marketing and distribution of the Products subject to such party’s trademark and usage guidelines and prior written approval. Each party may not use the other party’s Marks in advertising, promotion, and publicity of the Products without the express written consent of the other party. Any consent to use a party’s Marks will be conditioned upon compliance with the most current guidelines for use of Marks. Upon request by the other party, the party owning Marks shall provide Marks guidelines (or equivalent guidance) to the other. Any unauthorized modification to Marks is expressly prohibited. Neither party shall acquire any rights in Marks of the other nor will it act to impair the rights of the other party in and to such Marks.

5.2 Domain Locations. Each party shall maintain ownership and administration of the addresses on the World Wide Web (“Domain Locations”) that have been registered on its behalf and neither party may establish any Domain Locations on behalf of the other party without its consent. Upon termination, each party agrees to assign to the other party any rights it may have in any domain names or adwords that include the other party’s Marks.

6.1 Launch Funding. In addition to the marketing allowances identified below, Vendor agrees to provide mutually agreed upon launch funding to Ingram Micro for Product launch and awareness activities commensurate with the Product and customer segments being targeted. Such activities may include training, sales and customer communication and tools, Vendor and Product listing in Ingram Micro’s online catalog, and recruiting services. Initial launch funding shall be provided to Ingram Micro via check or wire transfer as agreed between the parties.

6.2 General Marketing Allowances. Vendor agrees to establish a general cooperative marketing allowance as mutually agreed by the parties (or the allowance offered by Vendor to Ingram Micro Competitors, if greater) of the amount of Product invoices submitted by Vendor to Ingram Micro (or the marketing allowance offered by Vendor to Ingram Micro Competitors, if greater) to cover the costs of Product advertising and/or promotions by Ingram Micro or its customers. Notwithstanding the foregoing, all marketing activities, including but not limited to the payment of marketing funds, will be subject to separate written agreements between the parties.

6.3 Special Marketing Allowances. Exclusive of general marketing allowances, Vendor may, from time to time, provide special marketing allowances to Ingram Micro or selected customer groups (e.g., to government resellers). Any advertising and promotions subject to these special marketing allowances shall be submitted to Vendor for review and approval prior to implementation, and Vendor shall not unreasonably withhold or delay such approval.

Ingram Micro Inc. Distribution Agreement

6.4 Payment of Marketing Funds. Payment of marketing funds will be made in accordance with separate marketing agreements prior to the commencement of such activities.

6.5 Programs. Ingram Micro may, in its sole discretion, offer marketing programs and services to Vendor including but not limited to corporate communications programs, launch programs and reseller pass-through opportunities. The costs, as well as terms and conditions of such programs are outlined in their respective program agreements.

6.6 Email . Each party consents to the other party sending messages of an informational, advertisement or technical nature via e-mail.

7.1 General Warranty. Vendor represents and warrants that (i) it has full power, right and authority to enter into this Agreement and all necessary licenses to provide the Product for resale and (ii) the Product will perform in substantial conformance with the then current Vendor published documentation under normal use for the term of each End-User Subscription. Vendor’s sole obligation and any Ingram Micro, Reseller’s and/or End-User’s sole remedy is to correct any significant deviation from the specifications in a manner determined by Vendor;

THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO DEFECTS IN THE PHYSICAL MEDIA, OPERATION OF THE SOFTWARE AND THE DATABASES, AND ANY PARTICULAR APPLICATION OR USE OF THE SOFTWARE AND THE DATABASES.

Ingram Micro agrees, and will notify and encourage its Resellers to not make any representations or warranties with respect to the Products other than the limited warranties made by Vendor under this Agreement.

7.2 End-User Warranty. Vendor shall provide a warranty statement with the Product for End-User benefit.

7.3 Harmful Code Warranty . Except as set forth below, Vendor represents and warrants that, to its knowledge, the Products will not contain any virus or any other contaminant or disabling devices including, but not limited to, codes, commands or instructions enabling, directly or indirectly, access, alteration, deletion, damage or disablement of the Products, or known viruses, expiration, time-sensitive devices, adware, spyware, malware or other harmful code or malicious programs that would adversely affect the end-user’s experience or inhibit the End-User’s use of the Products. Notwithstanding the foregoing, Ingram Micro acknowledges and agrees that the Products are activated through the use of a Vendor-issued Subscription Key and that upon expiration of an End-User paid up subscription period, Vendor will deactivate the Subscription Key and the Products will cease to function.

8.1 Vendor Indemnity . Vendor will defend, indemnify and hold Ingram Micro harmless from and against any and all damages, liabilities, costs and expenses (including but not limited to attorneys’ fees) arising out of or incurred by Ingram Micro in connection with or as a result of any third party claim or proceeding made or brought against Ingram Micro with respect to any allegation that (i) Vendor’s Product, acts, omissions, misrepresentations, or gross negligence caused personal or bodily injury or tangible property damage , or (ii) there has been any material breach or default by Vendor in the performance of Vendor’s obligations under this Agreement.

8.2 Intellectual Property Indemnity . Vendor shall defend, indemnify and hold Ingram Micro and its customers harmless from and against any claims, demands, liabilities, or expenses (including attorney’s fees and costs) incurred by Ingram Micro arising from the alleged infringement of any third party’s patent, copyright, trademark, trade secret or other proprietary right by reason of the manufacture, sale, marketing, or use of Product or Information to the extent such claim is not based upon: (a) the combination of such Product or Information by Ingram Micro with another product or information not authorized by Vendor; (b) the modification of such Product or Information by Ingram Micro; or (c) use of the Product or Information by Ingram Micro except as authorized in this Agreement. Upon threat of claim or claim of infringement, Vendor may, at its expense and option (i) procure the right to continue using any part of Product, (ii) replace the infringing Product with a non-infringing Product of similar performance, or (iii) modify Product to make it non-infringing. However, such right of return is in addition to, and not a substitute for, Ingram Micro’s right to indemnification hereunder.

Ingram Micro Inc. Distribution Agreement

8.3 Document Production Indemnity . Each party shall indemnify and hold the other party harmless from and against all actual out of pocket costs associated directly with document production, depositions, interrogatories and related demands, arising either from private third party claims or governmental claims or investigations against or concerning the party wherein the other party is neither a party to nor target of such claims or investigations.

8.4 Indemnification by Ingram Micro. Ingram Micro will defend, indemnify and hold Vendor harmless from and against any and all damages, liabilities, costs and expenses (including but not limited to attorneys’ fees) arising out of or incurred by Vendor in connection with or as a result of any third party claim or proceeding made or brought against Vendor with respect to any allegation that (i) Ingram Micro’s acts, omissions, misrepresentations, or gross negligence caused personal or bodily injury or tangible property damage , or (ii) there has been any material breach or default by Ingram Micro in the performance of Ingram Micro’s obligations under this Agreement.

EXCEPT AS OTHERWISE STATED HEREIN, AND EXCEPT TO THE EXTENT OF BODILY INJURY OR DEATH OR VIOLATION OF SECTIONS 5 OR 11.2, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOST PROFITS OR BUSINESS, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY OR OTHERWISE) WHETHER OR NOT EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR CLAIMS BASED ON SECTIONS 5, 8 OR 11.2, IN NO EVENT WILL VENDOR’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY INGRAM MICRO TO VENDOR FOR THE INDIVIDUAL PRODUCT SUBSCRIPTION ON WHICH THE CLAIM IS BASED DURING THE ONE-YEAR PERIOD PRIOR TO THE EVENT OUT OF WHICH THE CLAIM AROSE.

Vendor may, at its sole option, participate in a special pricing and marketing program targeting the federal, state and local government and/or educational markets. If Vendor participates in such a program, Vendor agrees to execute a separate agreement and comply with all mandatory Federal Acquisition Regulation (“FAR”) flow-down provisions, if any, required by such government entity and to which Vendor has agreed in writing.

11.1 Conflicting Terms . In the event of a conflict between the terms and conditions of the underlying Agreement and the terms and conditions in any exhibit thereto, the terms and conditions in the exhibit shall govern.

(a) Either party may disclose to the other information in connection with its performance hereunder which it deems to be confidential and proprietary. Such information, which is originated by the disclosing party (the “Owner”) or is within the special knowledge of such party shall, if in documentary form and conspicuously marked “confidential, at the time of disclosure or it would otherwise by its nature be reasonably considered “confidential”, be considered to be confidential and proprietary (“Confidential Information”). In addition, if any other information is not marked and in documentary form when disclosed, but is thereafter reduced to a writing and forwarded to the other party within ten (10) days of the date of initial visual or oral disclosure and marked “confidential”, it shall, effective from the time of initial disclosure be considered (also “Confidential Information”). Notwithstanding, however, the presence or absence of a marking as indicated above, Confidential Information shall include all information, regardless of the form in which it is transmitted, relating to the Owner’s (or another party whose information Owner has in its possession under obligations of confidentiality) past, present or future research, development or business plans, software, operations or systems (including, without limitation, the terms and conditions of this Agreement, studies or reports, software, memoranda, drafts and other information in either tangible or intangible form).

(b) For a period of two (2) years from the date of disclosure to the party receiving the Confidential Information (the “Recipient”), Recipient shall not disclose any Confidential Information it receives from Owner to any person, firm or corporation except: (i) employees of Recipient and its affiliated companies who have a need to know and who have been informed of Recipient’s obligation hereunder; (ii) contractors or consultants under contract to Recipient who have a need to know, who have been informed of

Ingram Micro Inc. Distribution Agreement

Recipient’s obligations hereunder, and who have agreed in writing not to disclose Confidential Information for a period not shorter than the nondisclosure period provided above; and (iii) as provided in subparagraph (c) below. Notwithstanding the foregoing, the obligations set forth in this Section 11.2 shall, for any Confidential Information which constitutes as trade secret under applicable law, continue so long as such information constitutes a trade secret and the Recipient has not disposed of the Confidential Information pursuant to its document retention policies. Recipient shall use the same degree of care, but in no case less than reasonable care, to avoid disclosure of such Confidential Information as Recipient uses with respect to its own Confidential Information of like importance.

(c) Information shall not be deemed confidential or proprietary for purposes of this Agreement, and Recipient shall have no obligation with respect to any such information, which: (i) is already known to Recipient at the time of its disclosure without restriction; (ii) is or becomes publicly known through no wrongful act of Recipient; (iii) is received from a third party without similar restrictions and without breach of this Agreement; (iv) is independently developed by Recipient without use of or reference to the Confidential Information; or (v) is lawfully required to be disclosed to any government agency or is otherwise required to be disclosed by law provided that the Recipient provides prompt notice to the Owner and uses reasonable efforts to protect the confidentiality of such information.

(d) All Confidential Information disclosed by Owner to Recipient pursuant to this Agreement in tangible form (including, without limitation, information incorporated in computer software) shall be and remain in the property of Owner, and all such Confidential Information shall be promptly returned to Owner or certified as destroyed, as the Owner may so designate, upon written request.

(e) Neither party shall be liable for any errors or omissions in the Confidential Information or for the use or the results of use of Confidential Information. ANY AND ALL INFORMATION DISCLOSED UNDER THIS AGREEMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY OF ANY KIND, AND DISCLOSER HEREBY DISCLAIMS ANY IMPLIED WARRANTIES, INCLUDING MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

11.3 Independent Contractors. Each party shall be considered an independent contractor. The relationship between the parties shall not be construed to be that of employer and employee, nor constitute a partnership, joint venture or agency of any kind. Neither party shall have any right to enter into any contracts or commitments in the name of, or on behalf of, the other party, or to bind the other party in any respect whatsoever.

11.4 Notices. Any legal notices which either party may desire to give the other party must be in writing and may be given by (i) personal delivery to an officer of the party, (ii) by mailing the same by registered or certified mail, return receipt requested, or via nationally recognized courier services to the party at the address of such party as set forth below, or such other address as the parties may hereinafter designate, and (iii) by facsimile subsequently to be confirmed in writing pursuant to item (ii) herein.

Notices to Ingram Micro:

Ingram Micro Inc.

1600 E. St. Andrew Place

Santa Ana, CA 92705

Notices to Vendor:

Websense, Inc.

10240 Sorrento Valley Road

San Diego, CA 92121

11.5 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California, exclusive of its conflicts of law provisions. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. The parties agree to the exclusive jurisdiction and venue of the state and federal courts located in Orange County, California, USA, for the adjudication of any disputes arising from, related to or regarding the Products or the subject matter of this Agreement.

11.6 Dispute Resolution. Unless otherwise agreed in writing, the exclusive procedure for handling disputes shall be as set forth herein. Notwithstanding such procedures, either party may, at any time, seek injunctive relief in addition to the process described below. Performance under the Agreement shall continue during the dispute resolution process except in such instance where continuation would cause the Agreement to fail its essential purpose. The parties agree that payment disputes shall not, in association with such dispute resolution procedures, be considered as a condition giving rise to failure of essential purpose.

Ingram Micro Inc. Distribution Agreement

(a) Informal Dispute Resolution. Prior to mediation the parties shall seek informal resolution of disputes. The process shall be initiated with written notice of one party to the other describing the dispute with reasonable particularity followed with a written response within ten (10) days of receipt of notice. Each party shall promptly designate an executive with requisite authority to resolve the dispute and who is at a higher level of management than the person with administrative responsibility over the Agreement. The informal procedure shall commence within ten (10) days of the date of response. All reasonable requests for non-privileged information reasonably related to the dispute shall be honored. If the dispute is not resolved within thirty (30) days of commencement of the procedure, either party may proceed to mediation pursuant to the rules set forth in (b) below.

(b) Mediation. If the dispute is valued, in the aggregate, at not less than $2.5 million and has not been resolved pursuant to (a) above or, if the parties fail to commence informal dispute resolution pursuant to (a) above, either party may, in writing and within twenty (20) days of the response date noted in (a) above, ask the other party to participate in a one (1) day mediation with an impartial mediator, and the other party shall do so. Each party will bear its own expenses and an equal share of the fees of the mediator. If the mediation is not successful the parties may proceed with litigation subject to Section 11.5 above

11.7 Tax Exemption Certificate. Upon request, Ingram Micro will provide Vendor with a valid tax exemption certificate.

11.8 Compliance. Each party shall comply with all applicable state, federal, and where applicable, country specific rules and regulations and shall indemnify the other party in the event of any violations thereof.

Vendor shall obtain and maintain the following insurance coverage at its expense:

(a) Commercial General Liability (including product and completed operations, personal and advertising injury