[FORM]
ONLINE HOSTING AGREEMENT
This Online Hosting Agreement (this "Agreement") is being entered into
effective as of the 1st day of June, 1999 and is entered into by and between
Diplomat Direct Marketing Corporation, a Delaware corporation ("Diplomat"), and
Xxxxx E-Commerce Corp., a Delaware corporation ("Xxxxx").
R E C I T A L S
A. Historically, Diplomat has been engaged directly in, among other
things, the business of offering consumers the opportunity to place apparel
orders directly with Diplomat through its toll free telephone number and its web
site (the "Direct Access Business").
B. Recently, Xxxxx was formed and Xxxxx and Diplomat have entered into
a Web Design and Consulting Agreement of even date herewith (the "Web
Agreement") pursuant to which Xxxxx has agreed to assist Diplomat in developing
the technology, and providing other services necessary, to further Diplomat's
Direct Access Business, including the hosting and maintenance of Diplomat's web
site (the "Web Site").
C. In connection with Diplomat's operation of its Direct Access
Business, Diplomat desires to obtain various online hosting services
("Services") from Xxxxx, and Xxxxx desires to provide such Services to Diplomat.
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
Section 1. SERVICES.
Xxxxx shall provide, directly or through a third party vendor
reasonably satisfactory to Diplomat, the Online Hosting Services described on
EXHIBIT A hereto, at the cost specified and on the other terms and conditions as
set forth on EXHIBIT A.
Section 2. COMPENSATION.
Diplomat will pay to Xxxxx when due a fee for each of the Services
equal to the amount described in EXHIBIT A hereto relating to each such Service;
PROVIDED, that in the event Diplomat terminates this Agreement in accordance
with Section 3 hereof, the fee for the provision of each
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terminated Service shall cease to accrue on and after the effective date of such
termination. In the event that Diplomat terminates this Agreement other than in
accordance with Section 3, Diplomat shall be obligated to pay for the Services
in accordance with the fee schedule contained on EXHIBIT A throughout the
balance of the Period (as hereinafter defined) as though Xxxxx continued to
provide the terminated Services through the balance of the Period. Late payments
shall accrue interest at a rate equal to fifteen (15%) percent per annum.
Section 3. TERM.
(a) The term of this Agreement shall begin on the date hereof
(the "Effective Date") and shall continue for a period of 12 months thereafter
(the "Period") in full force and effect until it is terminated in accordance
with this Section 3.
(b) Diplomat or Xxxxx, if such party is not in default of the
terms of this Agreement, may extend the term of this Agreement for an additional
one year ("Additional Period"), provided the extending party gives the other
party at least sixty (60) days advance written notice before the end of the
Period. If either party elects to extend the Agreement for the Additional
Period, all other terms and conditions of this Agreement shall continue during
the Additional Period.
(c) Xxxxx shall have the right (but not the obligation) to
terminate this Agreement and the rights granted to Diplomat hereunder if:
(i) Diplomat is in material breach of any of its
obligations hereunder, which breach is not cured within five days of receipt of
written notice from Xxxxx of such breach;
(ii) The Web Agreement is terminated by any of Xxxxx,
Diplomat, or any other party thereto [in the event the rights and obligations of
any party(ies) to such Web Agreement have been duly assigned to a third
party(ies) under the terms thereof] in accordance with the terms of the Web
Agreement, but not if the Web Agreement is terminated by Xxxxx or its
assignee(s) other than in accordance with the terms of the Web Agreement;
(iii) Diplomat is the subject of a voluntary petition
in bankruptcy or any voluntary proceeding relating to insolvency, receivership,
liquidation or composition for the benefit of creditors, if such petition or
proceeding is not dismissed within 60 days of filing, or becomes the subject of
any involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within 60 days of
filing;
(iv) Diplomat involuntarily dissolves or is
dissolved;
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(v) Diplomat is judicially adjudicated insolvent or
generally is unable to pay its debts as they mature or makes an assignment for
the benefit of its creditors; or
(vi) Upon Xxxxx giving Diplomat at least sixty (60)
days advance written notice of termination of this Agreement.
(d) Diplomat shall have the right (but not the obligation) to
terminate this Agreement and the rights granted to Xxxxx hereunder if:
(i) Xxxxx is in material breach of any of its
obligations hereunder, which breach is not cured within five days of receipt of
written notice from Diplomat of such breach;
(ii) The Web Agreement is terminated by any of Xxxxx,
Diplomat, or any other party thereto [in the event the rights and obligations of
any party(ies) to such Web Agreement have been duly assigned to a third
party(ies) under the terms thereof] in accordance with the terms of the Web
Agreement, but not if the Web Agreement is terminated by Diplomat or its
assignee(s) other than in accordance with the terms of the Web Agreement;
(iii) Xxxxx is the subject of a voluntary petition in
bankruptcy or any voluntary proceeding relating to insolvency, receivership,
liquidation or composition for the benefit of creditors, if such petition or
proceeding is not dismissed within 60 days of filing, or becomes the subject of
any involuntary proceeding relating to insolvency, receivership, liquidation or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within 60 days of filing.
(iv) Xxxxx involuntarily dissolves or is dissolved;
(v) Xxxxx is judicially adjudicated insolvent or
generally is unable to pay its debts as they mature or makes an assignment for
the benefit of its creditors; or
(vi) Upon Diplomat giving Xxxxx at least sixty (60)
days advance written notice of termination of this Agreement.
(e) Xxxxx will have the right (but not the obligation) to
terminate this Agreement and the rights granted to Diplomat hereunder, upon 60
days written notice to Diplomat, following the acquisition of all or
substantially all of the assets of Diplomat by any Permitted Assignee (as
defined in Section 9(a) of this Agreement), or the acquisition of the beneficial
ownership of at least 20% (the "Threshold") of the voting power represented by
the voting securities of Diplomat, any successor thereto or any Permitted
Assignee by any person or
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"group" within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act or any successor provision thereof (a
"group") other than The Xxxxx Family Irrevocable Stock Trust U/A dated April 30,
1997, organized under the laws of the State of New York (the "Trust"), Xxxxxx X.
Xxxxx ("Xxxxx"), or any affiliate of Xxxxx or the Trust. For purposes of this
Agreement, (i) the term "beneficial ownership" shall have the meaning set forth
in Rule 13d-3 of the Exchange Act or any successor provisions thereof, (ii) the
term "voting securities' means the common Stock, par value $.0001 per share, of
Diplomat and any other securities issued by Diplomat having the power to vote
generally in the election of directors of Diplomat and (iii) the term
"affiliate" means a person or entity directly or indirectly controlled by,
controlling or under common control with another person. For purposes of this
Section 3, an acquisition shall not include (A) the acquisition by a person of
voting securities of Diplomat pursuant to an involuntary disposition through
foreclosure or similar event, or (B) the acquisition by a person of voting
securities of Diplomat pursuant to a dividend intended to be on a tax-free basis
(a "Tax-Free Spin-Off") under the Internal Revenue Code of 1986, as amended from
time to time, but shall include a subsequent acquisition of voting securities
pursuant to a disposition by the person that acquired the voting securities in
such involuntary disposition or such Tax-Free Spin-Off. In the event any person
acquires beneficial ownership of voting power in excess of the Threshold as a
result of a transaction described in the immediately preceding sentence, the
Threshold with respect to such person shall be adjusted to an amount equal to
the percentage of beneficial ownership held by such person immediately following
such transaction.
(f) A party may exercise its right to terminate pursuant to
this Section 3 by sending appropriate written notice to the other party. No
exercise by a party of its rights under this Section will limit its remedies by
reason of the other party's default, the party's rights to exercise any other
rights under this Section 3, or any of that party's other rights.
Section 4. RECORDS AND ACCOUNTS.
Xxxxx will maintain accurate books, records and accounts of all
transactions relating to the Services performed by it pursuant to this
Agreement. Diplomat may, at its own expense, examine and copy those books and
records as provided in this Section 4. Such books, records and accounts will be
maintained in a manner that allows Diplomat to separate these matters from those
relating to Xxxxx'x other operations. Such books, records and accounts will
reflect such information as would normally be examined by an independent
accountant in performing an audit pursuant to United States generally accepted
auditing standards for the purpose of certifying financial statements, and to
permit verification thereof by governmental agencies. Diplomat may make
examinations pursuant hereto during Xxxxx'x usual business hours, and at the
place in the continental United States where Xxxxx regularly keeps these books
and records. Diplomat will be required to notify Xxxxx at least five business
days before the date of planned examination. If Diplomat's examination is not
completed within one month from commencement, Xxxxx at any time may require
Diplomat to terminate such examination on
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seven days' notice to Diplomat; PROVIDED that Xxxxx has cooperated with Diplomat
in the examination of such books and records.
Section 5. NO RESTRICTIONS.
Nothing in this Agreement shall limit or restrict the right of any of
Diplomat's directors, officers or employees or any of Xxxxx'x directors,
officers or employees to engage directly or indirectly in the same or similar
business activities or lines of business as Diplomat or, respectively, or limit
or restrict the right of Diplomat or Xxxxx as the case may be, to engage in any
other business or to render or obtain, as the case may be, services of any kind
to or from, as the case may be , any corporation, firm, individual, trust or
association.
Section 6. INDEPENDENT CONTRACTORS.
Xxxxx and Diplomat are independent contractors. There is no
relationship of partnership, joint venture, employment, franchise or agency
between Xxxxx and Diplomat. Neither Xxxxx nor Diplomat shall have the power to
bind the other or incur obligations on the other's behalf without the other's
prior written consent. When Xxxxx'x employees act under the terms of this
Agreement, they shall be deemed at all times to be under the supervision and
responsibility of Xxxxx and no person employed by Xxxxx and acting under the
terms of this Agreement shall be deemed to be acting as agent or employee of
Diplomat or any customer of Diplomat for any purpose whatsoever.
Section 7. CONFIDENTIALITY.
Xxxxx and Diplomat each agree to hold in strict confidence, and to use
reasonable efforts to cause each of their employees and representatives to hold
in strict confidence, all confidential information concerning Xxxxx or Diplomat,
as the case may be, furnished to or obtained by the other party, in the course
of performing the obligations provided for under this Agreement except to the
extent that (a) such information has been in the public domain through no fault
of Xxxxx or Diplomat, as the case may be, (b) disclosure or release is compelled
by judicial or administrative process, or (c) in the opinion of counsel to Xxxxx
or Diplomat, as the as may be, disclosure or release is necessary pursuant to
requirements of law or the requirements of any governmental entity including,
without limitation, disclosure requirements under the securities laws of the
United States or similar laws of other jurisdictions applicable to Xxxxx or
Diplomat, as the case may be.
Section 8. PROPRIETARY RIGHTS OF XXXXX.
All materials, including but not limited to any computer software (in
object code and source code form), data or information developed or provided by
Xxxxx, or its suppliers under this Agreement, and any know-how, methodologies,
equipment, or processes used by Xxxxx to provide the Services to Diplomat,
including, without limitation, all copy-rights, trademarks,
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patents, trade secrets, and any other proprietary rights inherent therein and
appurtenant thereto (collectively, "Host Materials") shall remain the sole and
exclusive property of Xxxxx or its suppliers. To the extent, if any, that
ownership of the Hose Materials does not automatically vest in Xxxxx by virtue
of this Agreement or otherwise, Diplomat hereby transfers and assigns to Xxxxx
all rights, title and interest which Diplomat may have in and to the Host
Materials. Diplomat acknowledges and agrees that Xxxxx is in the business of
designing and hosting Web sites, and that Xxxxx shall have the right to provide
to third parties services which are the same or similar to the Xxxxx Services,
and to use or otherwise exploit any Host Materials in providing such services.
Section 9. DISPUTE RESOLUTION.
(a) In the event that any party to this Agreement has
any claim, right or cause of action against any other party to this Agreement,
which the parties shall be unable to settle by agreement between themselves,
such claim, right or cause of action, to the extent that the relief sought by
such party is for monetary damages or awards, shall be determined by arbitration
in accordance with the Rules of the American Arbitration Association ("AAA"),
through the adjudication by a single arbitrator, in New York, New York, with the
decision of such arbitrator to be final and binding upon all parties. The fees,
costs and expenses of such arbitration, as submitted by the AAA, shall be borne
equally by both Xxxxx and Diplomat; PROVIDED, that each of Xxxxx and Diplomat
shall pay the fees, costs and expenses of its own counsel, accountants and other
representatives in connection with such arbitration. The parameters of the AAA
proceedings undertaken in accordance with this Section 8 shall be prescribed
such that a decision shall be rendered within sixty (60) days following the
initial written reference of the related dispute to AAA arbitration.
(b) Notwithstanding any other provisions of this Section 8, in
the event that a party against whom any claim, right or cause of action is
asserted commences, or has commenced against it, bankruptcy, insolvency or
similar proceedings, the party or parties asserting such claim, right or cause
of action shall have no obligations under this Section 8 and may assert such
claim, right or cause of action in the manner and forum it deems appropriate,
subject to applicable laws. No determination or decision by the arbitrators
pursuant to this Section 8 shall limit or restrict the ability of any party
hereto to obtain or seek in any appropriate forum, any relief or remedy that is
not a monetary award or money damages.
Section 10. MISCELLANEOUS.
(a) Neither party any assign this Agreement, or their
respective rights and obligations hereunder, in whole or in part, without the
other party's prior written consent; PROVIDED, HOWEVER, that Xxxxx shall be
entitled to assign all of its rights and obligations hereunder to any subsidiary
or affiliated entity without the consent of Diplomat. Any attempt to assign this
Agreement without such consent (if required) shall be void and of no effect AB
INITIO. Notwithstanding the immediately preceding sentence, either party may
assign this Agreement or all, but not less than all, of its rights and
obligations hereunder to any entity that acquires it by
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purchase of stock or by merger or otherwise, or by obtaining all or
substantially all of its assets (a "Permitted Assignee"); PROVIDED, that any
such Permitted Assignee thereafter succeeds to all of the rights and is subject
to all of the obligations of the assignor under this Agreement; and PROVIDED,
HOWEVER, that the provisions of this Section 9(a) shall in no way modify the
provisions of Section 3(d).
(b) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State. Each party shall comply in all
respects with all laws and regulations applicable to its activities under this
Agreement.
(c) Notwithstanding the provisions of Section 8, each party
hereto irrevocably submits to the exclusive jurisdiction of (a) the courts of
the State of New York, New York County, or (b) the Untied States District Court
for the southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated
hereby or thereby. Each of Diplomat and Xxxxx agrees to commence any such
action, suit or proceeding either in the Untied States District Court for the
Southern District of New York, or if such suit, action or other proceeding may
not be brought in such court for jurisdictional reasons, in the courts of the
State of New York County. Each of Diplomat and Xxxxx further agrees that service
of any process, summons, notice or documents by U.S. registered mail to such
party's respective address set forth below shall be effective service of process
for any action, suit or proceeding in New York with respect to any matters to
which it has submitted to jurisdiction in this Section 9(c). Each of Diplomat
and Xxxxx irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby and thereby in (i) the courts of the State of
New York County, or (ii) the United States District Court for the Southern
District of New York, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(d) If any provisions of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other persons or
circumstances.
(e) All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand, by
facsimile (with confirmation back), or sent, postage prepaid, by registered,
certified or express mail or nationally recognized overnight courier service and
shall be deemed given when so delivered by hand, by facsimile (with confirmation
back), or if mailed, three days after mailing (one business day in the case of
express mail or overnight courier service), as follows:
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(i) if to Xxxxx:
Xxxxx E-Commerce Corp.
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx, President
(ii) if to Diplomat:
Diplomat Direct Marketing Corporation
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, President
(f) The provisions of Sections 7, 8 and 9 hereof shall survive
any termination of this Agreement.
(g) No failure to either party to exercise or enforce any of
its rights under this Agreement shall act as a waiver of such right.
(h) This Agreement, along with the Exhibit hereto, contains
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter. Neither party shall be liable or
bound to any other party in any manner by any representations, warranties or
convenants relating to such subject matter expect as specifically set forth
herein.
(i) This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to each of the other parties.
(j) This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
(k) This Agreement is for the sole benefit of the parties
hereto and nothing herein expressed or implied shall give or be construed to
give to any person, other than the parties hereto any legal or equitable rights
hereunder.
(l) The headings contained in this Agreement or in any Exhibit
hereto are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. All Exhibits annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Any capitalized terms used in any Exhibit but
not otherwise defined therein, shall have the meaning as defined in this
Agreement. When a reference is made in this Agreement to a Section or an
Exhibit, such reference shall be to a Section of, or an Exhibit to, this
Agreement unless otherwise indicated.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of June 30, 1999.
XXXXX E-COMMERCE CORP.
By: /s/ Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx
President
DIPLOMAT DIRECT MARKETING CORP.
By /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
President
EXHIBIT A
ONLINE HOSTING SERVICES
If requested by Diplomat, Xxxxx will provide, by itself or through its
subsidiaries or affiliates, the Services described below:
(a) Scope and Description of Services. Xxxxx will provide Diplomat with
all online hosting services currently provided to Diplomat through third party
contracts, including, without limitations, the development and maintenance for
Diplomat's operating divisions and/or operating subsidiaries of Commerce Web
Subsites (as defined below) within the www.______ web site on the Internet based
on online Enrollment and Information Forms, completed by Diplomat, submitted in
conformance with Xxxxx'x instructions. Notwithstanding anything herein to the
contrary, Xxxxx and Diplomat will confer, from time to time, with respect to the
placement of the link to this information and the manner in which this link
appears on the subject web site; PROVIDED, that if mutual agreement is not
reached on such placement, the reasonable determination with respect thereto
made by Xxxxx shall be final and binding on both parties. If a consumer places
an order directly on a Xxxxx-operated Commerce Web Subsite for a Diplomat Direct
Access Business product, Xxxxx agrees to transmit such order to Diplomat's
Direct Access Business network and Diplomat will convert that order to a message
and direct the order for internally processed fulfillment, with Diplomat
receiving 100% of the order's value subject to any processing charges (subject
to the terms of the Web Agreement). For the purposes of this Agreement, the
terms "Commerce Web Subsite" means a web site through which a consumer can place
an order for Diplomat products.
(b) Price. For the services described above, Diplomat will pay Xxxxx a
monthly fee of $____________ for each Commerce Web Subsite hosted by Xxxxx in
accordance with the Fee Schedule annexed as EXHIBIT A-1.
(c) Payment and Accounting. Xxxxx will invoice Diplomat within 15 days
of the end of each month for Services rendered in such month. Diplomat will pay
such invoice within 30 days of receipt.
EXHIBIT A-1
[Omitted]
