"NOTE - Certain confidential technical and commercial information has been
redacted from this exhibit in order to preserve the confidentiality of such
information. All of the confidential information which has been redacted is on
file with the Securities and Exchange Commission. Redacted material is
indicated by the symbol, "[**REDACTED**]" where such redacted text would have
appeared in this exhibit."
NETGATEWAY
ELECTRONIC COMMERCE SERVICES AGREEMENT
THIS ELECTRONIC COMMERCE SERVICES AGREEMENT (this "AGREEMENT") is made
effective as of the Acceptance Date set forth in the initial eCommerce Services
Order Form ( July 28, 1999) accepted by Netgateway, a Nevada corporation
("NETGATEWAY"), and the subscriber identified below ("SUBSCRIBER").
PARTIES:
SUBSCRIBER NAME: X0XXXXXXX.XXX INC.
ADDRESS: 000 XXXX XXXXXX
XXXXXXXXXX, XX 00000
PHONE: (000) 000-0000
FAX: (000) 000-0000
NETGATEWAY
000 Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
1. ELECTRONIC COMMERCE SERVICES.
1.1 eCOMMERCE SERVICES. Subject to the terms and conditions of this
Agreement, during the term of this Agreement, Netgateway will, through the
Netgateway Internet Commerce Center-TM- ("NETGATEWAY ICC"), provide to
Subscriber the services described in the eCommerce Services Order Form(s)
(the "eCOMMERCE SERVICES ORDER FORM(S)") accepted by Netgateway, or
substantailly similar services if such substantailly similar services would
provide Subscriber with substantially similar benefits (the "eCOMMERCE
SERVICES"). All such eCommerce Services Order Forms will be incorporated
herein by this reference as of the Acceptance Date set forth on each such
form. Netgateway and Subscriber have mutually agreed or will mutually agree
upon the detailed final specifications (the "SPECIFICATIONS") for the
eCommerce Services and the development timeline therefor, all of which are or
will be set forth on the attached initial eCommerce Services Order Form
attached hereto as Exhibit "A", and by this reference made a part hereof.
1.2 AVAILABILITY. eCommerce Services will be available to Subscriber for
inquiry and order entry functions twenty-four (24) hours a day, seven (7) days a
week. Netgateway reserves the right upon reasonable notice to Subscriber to
limit or curtail holiday or weekend availability when necessary for system
upgrades, adjustments, maintenance or other operational considerations.
1.3 ENHANCEMENTS. General enhancements to existing eCommerce Services
provided hereunder, as well as new features that Netgateway incorporates into
its standard commerce processing system, regardless of whether they are
initiated by Netgateway or developed at the request of Subscriber or other
subscribers, shall be made available to Subscriber at no additional cost.
Any new features or services that may be developed by Netgateway during the
term of this Agreement which Netgateway intends to offer to subscribers on a
limited or optional basis may, at Netgateway's option, and subject to
Subscriber's acceptance, be made available to Subscriber at Netgateway's
then-current prices for such new features or service. Enhancements to
existing eCommerce Services requested by Subscriber that benefit only
Subscriber at the time such enhancements are put into service shall be billed
to Subscriber at Netgateway's standard rates for programming. All
enhancements to the eCommerce Services, and any new features or services
introduced by Netgateway, shall remain the exclusive proprietary property of
Netgateway.
1.4 TRAINING. At no cost to Subscriber Netgateway shall provide such
onsite training and other assistance, as Netgateway deems necessary to assure
that Subscriber's personnel are able to make effective use of the eCommerce
Services. On-site training shall take place at such times and places as are
mutually agreeable to the parties hereto.
1.5 SUBSCRIBER DATA.
(a) SUBSCRIBER DATA. Subscriber will timely supply Netgateway, in a form
acceptable to Netgateway, with all data necessary for Netgateway to perform the
ongoing services to be provided hereunder. It is the sole responsibility of
Subscriber to insure the completeness and accuracy of such data.
(b) CONFIDENTIALITY. Netgateway acknowledges that all records, data,
files and other input material relating to Subscriber are confidential and shall
take reasonable steps to protect the confidentiality of such records, data,
files and other materials. Netgateway will provide reasonable security
safeguards to limit access to Subscriber's files and records to Subscriber and
other authorized parties.
(c) PROTECTION OF SUBSCRIBER FILES. Netgateway will take reasonable
steps to protect against the loss or alteration of Subscriber's files, records
and data retained by Netgateway, but Subscriber recognizes that events beyond
the control of Netgateway may cause such loss or alteration. Netgateway will
maintain backup file(s) containing all the data, files and records related to
Subscriber. Subscriber's file(s), records and data shall, at no cost to
Subscriber, be released to Subscriber on an occurrence that renders Netgateway
unable to perform hereunder, or upon the termination of this Agreement as
provided herein.
(d) OWNERSHIP OF DATA. Netgateway acknowledges that all records, data,
files and other input material relating to Subscriber and its customers are the
exclusive property of the Subscriber.
2. FEES AND BILLING.
2.1 FEES. Subscriber will pay all fees and amounts in accordance with
the eCommerce Service Provider Forms.
2.2 BILLING COMMENCEMENT. The Initial Development Fee shall be due and
payable in accordance with the terms set forth on the eCommerce Services Order
Form. Billing for eCommerce Services indicated in the eCommerce Services Order
Form (including the eCommerce Rate, Fees Per Hit, Banner Advertising Revenue and
Click Through Revenue, as applicable) other than the Initial Development Fee,
shall commence on the "OPERATIONAL DATE" indicated in the eCommerce Services
Order Form. In the event that Subscriber orders other eCommerce Services in
addition to those listed in the initial eCommerce Services Order Form, billing
for such services shall commence on the date Netgateway first provides such
additional eCommerce Services to Subscriber or as otherwise agreed to by
Subscriber and Netgateway in the applicable eCommerce Services Order Form.
2.3 BILLING AND PAYMENT TERMS. All amounts due under this Agreement for
eCommerce Services indicated in the eCommerce Services Order Form shall be
payable in accordance with the Billing and Payment Terms set forth on Exhibit
"B" annexed hereto, which by this reference is made a part hereof.
2.4 TAXES, UTILITIES AND EXCLUSIONS. All charges shall be exclusive of
any federal, state or local sales, use, excise, AD VALOREM or personal property
taxes levied, or any fines, forfeitures or penalties assessed in connection
therewith, as a result of this Agreement or the installation or use of the
eCommerce Services provided hereunder. Any such taxes shall be paid by
Subscriber or by Netgateway for Subscriber's account, in which case Subscriber
shall reimburse Netgateway for amounts so paid. Netgateway shall provide
burstible at 1 megabit per second capacity bandwith for Subscriber's website at
no additional charge. Should Subscriber need additional bandwidth, Netgateway
shall provide or make arrangements to provide such additional bandwidth and
invoice Subscriber for such excess bandwidth and/or use beyond a 1 megabit per
second burstible line. Netgateway will provide traffic reports to Subscriber
with respect to burstible capacity. Netgateway is not responsible for providing
connectivity to Subscriber's offices.
3. SUBSCRIBER'S OBLIGATIONS.
3.1 COMPLIANCE WITH LAWS AND RULES AND REGULATIONS. Subscriber agrees that
Subscriber will comply at all times with all applicable laws and regulations and
Netgateway's general rules and regulations relating to its provision of
eCommerce Services, currently included herein as Section 10, which may be
updated and provided by Netgateway to Subscriber from time to time ("RULES AND
REGULATIONS"). Subscriber acknowledges that Netgateway exercises no control
whatsoever over the content contained in or passing through the Subscriber's web
site, storefront or mall ("eCOMMERCE CENTERS"), and that it is the sole
responsibility of Subscriber to ensure that the information it transmits and
receives complies with all applicable laws and regulations.
3.2 ACCESS AND SECURITY. Subscriber will be fully responsible for any
charges, costs, expenses (other than those included in the eCommerce Services),
and third party claims that may result from its use of, or access to, the
Netgateway Internet Commerce Center-TM-, including, but not limited to, any
unauthorized use or any access devices provided by Netgateway hereunder.
3.3 NO COMPETITIVE SERVICES. Subscriber may not at any time permit any
eCommerce Services to be utilized by Subscriber for the provision of any
services that compete with any Netgateway services, without Netgateway's
prior written consent.
3.4 INSURANCE.
(a) MINIMUM LEVELS. Within six (6) months of the date of this Agreement
(the last day of such period, the "Insurance Due Date"), Subscriber shall obtain
and keep in full force and effect during the term of this Agreement: (i)
comprehensive general liability insurance in an amount not less than $5 million
per occurrence for bodily injury and property damage; (ii) employer's liability
insurance in an amount not less than $1 million per occurrence; and (iii)
workers' compensation insurance in an amount not less than that required by
applicable law. Subscriber also agrees that it will be solely responsible for
ensuring that its agents (including contractors and subcontractors) maintain,
other insurance at levels no less than those required by applicable law and
customary in Subscriber's industry.
(b) CERTIFICATES OF INSURANCE. On or prior to the Insurance Due Date,
Subscriber will furnish Netgateway with certificates of insurance which evidence
the minimum levels of insurance set forth above, and will notify Netgateway in
writing in the event that any such insurance policies are cancelled.
(c) NAMING NETGATEWAY AS AN ADDITIONAL INSURED. Subscriber agrees that on
or prior to the Insurance Due Date, Subscriber will cause its insurance
provider(s) to name
Netgateway as an additional insured and notify Netgateway in writing of the
effective date thereof.
4. CONFIDENTIAL INFORMATION.
4.1 CONFIDENTIAL INFORMATION. Each party acknowledges that it will have
access to certain confidential information of the other party concerning the
other party's business, plans, customers, technology and products, including the
terms and conditions of this Agreement ("CONFIDENTIAL INFORMATION").
Confidential Information will include, but not be limited to, each party's
proprietary software and customer information. Each party agrees that it will
not use in any way, for its own account or the account of any third party,
except as expressly permitted by this Agreement, nor disclose to any third party
(except as required by law or to that party's attorneys, accountants and other
advisors on a need to know basis), any of the other party's Confidential
Information and will take reasonable precautions to protect the confidentiality
of such Confidential Information.
4.2 EXCEPTIONS. Information will not be deemed Confidential Information
hereunder if such information: (i) is known to the receiving party prior to
receipt from the disclosing party directly or indirectly from a source other
than one having an obligation of confidentiality to the disclosing party; (ii)
becomes known (independently of disclosure by the disclosing party) to the
receiving party directly or indirectly from a source other than one having an
obligation of confidentiality to the disclosing party; (iii) becomes publicly
known or otherwise ceases to be secret or confidential, except through a breach
of this Agreement by the receiving party; or (iv) is independently developed by
the receiving party.
5. REPRESENTATIONS AND WARRANTIES.
5.1 WARRANTIES BY SUBSCRIBER.
(a) SUBSCRIBER'S BUSINESS. Subscriber represents and warrants that:
(i) Subscriber's services, products, materials, data and
information used by Subscriber in connection with this Agreement as well as
Subscriber's and its permitted customers' and users' use of the eCommerce
Services (collectively, "SUBSCRIBER'S BUSINESS") does not, as of the Operational
Date, and will not during the term of this Agreement, operate in any manner that
would violate any applicable laws or regulations.
(ii) Subscriber owns or has the right to use all material
contained in the Subscriber's web site, including all text, graphics, sound,
video, programming, scripts and applets; and
(iii) The use, reproduction, distribution and transmission
of the web site, or any information or materials contained in it does not: (A)
infringe or misappropriate any copyright, patent, trademark, trade secret or any
other proprietary rights of a third party; or (B) constitute false advertising,
unfair competition, defamation, an invasion of privacy or violate a right of
publicity.
(b) RULES AND REGULATIONS. Subscriber has read the Rules and Regulations
(Section 10 below) and represents and warrants that Subscriber and Subscriber's
Business are currently in full compliance with the Rules and Regulations, and
will remain so at all times during the term of this Agreement.
(c) BREACH OF WARRANTIES. In the event of any breach, or reasonably
anticipated breach, of any of the foregoing warranties, in addition to any other
remedies available at law or in equity, Netgateway will have the right
immediately in Netgateway's reasonable discretion, to suspend any related
eCommerce Services if deemed reasonably necessary by Netgateway to prevent any
harm to Netgateway or its business.
5.2 WARRANTIES AND DISCLAIMERS BY NETGATEWAY.
(a) NO OTHER WARRANTY. THE eCOMMERCE SERVICES ARE PROVIDED ON AN "AS IS"
BASIS, AND SUBSCRIBER'S USE OF THE eCOMMERCE SERVICES IS AT ITS OWN RISK.
NETGATEWAY DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY AND ALL OTHER EXPRESS AND/OR
IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT AND TITLE,
AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE.
NETGATEWAY DOES NOT WARRANT THAT THE eCOMMERCE SERVICES WILL BE UNINTERRUPTED,
ERROR-FREE OR COMPLETELY SECURE.
(b) DISCLAIMER OF ACTIONS CAUSED BY AND/OR UNDER THE CONTROL OF THIRD
PARTIES. NETGATEWAY DOES NOT AND CANNOT CONTROL THE FLOW OF DATA TO OR FROM
NETGATEWAY'S INTERNET COMMERCE CENTER AND OTHER PORTIONS OF THE INTERNET. SUCH
FLOW DEPENDS IN LARGE PART ON THE PERFORMANCE OF INTERNET SERVICES PROVIDED OR
CONTROLLED BY THIRD PARTIES. AT TIMES, ACTIONS OR INACTIONS CAUSED BY THESE
THIRD PARTIES CAN PRODUCE SITUATIONS IN WHICH NETGATEWAY'S SUBSCRIBERS'
CONNECTIONS TO THE INTERNET (OR PORTIONS THEREOF) MAY BE IMPAIRED OR DISRUPTED.
ALTHOUGH NETGATEWAY WILL USE COMMERCIALLY REASONABLE EFFORTS TO TAKE ACTIONS IT
DEEMS APPROPRIATE TO REMEDY AND AVOID SUCH EVENTS, NETGATEWAY CANNOT GUARANTEE
THAT THEY WILL NOT OCCUR. ACCORDINGLY, NETGATEWAY DISCLAIMS ANY AND ALL
LIABILITY RESULTING FROM OR RELATED TO SUCH EVENTS.
6. LIMITATIONS OF LIABILITY.
6.1 EXCLUSIONS. IN NO EVENT WILL NETGATEWAY BE LIABLE TO ANY THIRD PARTY
FOR ANY CLAIMS ARISING OUT OF OR RELATED TO THIS AGREEMENT, SUBSCRIBER'S
BUSINESS OR OTHERWISE, AND ANY LOST REVENUE, LOST PROFITS, REPLACEMENT GOODS,
LOSS OF TECHNOLOGY, RIGHTS OR SERVICES, INCIDENTAL, PUNITIVE, INDIRECT OR
CONSEQUENTIAL DAMAGES, LOSS OF DATA, OR INTERRUPTION OR LOSS OF USE OF SERVICE
OR SUBSCRIBER'S BUSINESS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY
OR OTHERWISE.
6.2 LIMITATIONS. NETGATEWAY, ITS AFFILIATES, EMPLOYEES, OFFICERS AND
AGENTS SHALL NOT BE LIABLE TO SUBSCRIBER OR TO ANY THIRD PARTY FOR ANY LOSS OR
DAMAGE, WHETHER DIRECT OR INDIRECT, RESULTING FROM DELAYS OR INTERRUPTIONS OF
SERVICE DUE TO MECHANICAL ELECTRICAL OR WIRE DEFECTS OR DIFFICULTIES, STORMS,
STRIKES, WALK-OUTS, EQUIPMENT OR SYSTEMS FAILURES, OR OTHER CAUSES OVER WHICH
NETGATEWAY, ITS AFFILIATES, EMPLOYEES, OFFICERS, OR AGENTS AGAINST WHOM
LIABILITY IS SOUGHT, HAVE NO REASONABLE CONTROL, OR FOR LOSS OR DAMAGE, DIRECT
OR INDIRECT, RESULTING FROM INACCURACIES, ERRONEOUS STATEMENTS, ERRORS OF FACTS,
OMISSIONS OR ERRORS IN THE TRANSMISSION OR DELIVERY OF ECOMMERCE SERVICES, OR
ANY DATA PROVIDED AS A PART OF THE ECOMMERCE SERVICES PURSUANT TO THIS
AGREEMENT, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILFUL
MISCONDUCT OF NETGATEWAY. IN ADDITION, IN NO EVENT SHALL NETGATEWAY BE LIABLE
TO SUBSCRIBER OR TO ANY THIRD PARTY FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL LOSSES OR DAMAGES WHICH SUBSCRIBER OR SUCH THIRD PARTY MAY INCUR
OR EXPERIENCE ON ACCOUNT OF ENTERING INTO OR RELYING ON THIS AGREEMENT OR
UTILIZING THE NETGATEWAY ECOMMERCE SERVICES, REGARDLESS OF WHETHER NETGATEWAY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR WHETHER SUCH DAMAGES ARE
CAUSED, IN WHOLE OR IN PART, BY THE NEGLIGENCE OF NETGATEWAY.
6.3 MAXIMUM LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, IN ALL CASES ARISING FROM EVENTS OCCURRING DURING THE TERM OF THIS
AGREEMENT, WHETHER BASED UPON TORT, CONTRACT WARRANTY, INDEMNITY CONTRIBUTION
OR OTHERWISE, DAMAGES SHALL BE LIMITED TO, AND SUBSCRIBER AGREES NOT TO MAKE
ANY CLAIM OR CLAIMS EXCEEDING [**REDACTED**] REGARDLESS OF HOW MANY CLAIMS
SUBSCRIBER MAY HAVE..
6.4 TIME FOR MAKING CLAIMS. ANY SUIT OR ACTION BY SUBSCRIBER AGAINST
NETGATEWAY, ITS AFFILIATES, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS
OR ASSIGNS, BASED UPON ANY ACT OR OMISSION ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR SERVICES PERFORMED HEREUNDER, OR ANY ALLEGED BREACH THEREOF, SHALL
BE COMMENCED WITHIN TWO (2) YEARS OF THE FIRST OCCURRENCE GIVING RISE TO SUCH
CLAIM OR BE FOREVER BARRED. THIS PROVISION DOES NOT MODIFY OR OTHERWISE AFFECT
THE LIMITATION OF NETGATEWAY'S LIABILITY SET FORTH IN SECTION 6 OR ELSEWHERE IN
THIS AGREEMENT.
6.5 SUBSCRIBER'S INSURANCE. [Reserved].
6.6 BASIS OF THE BARGAIN; FAILURE OF ESSENTIAL PURPOSE. Subscriber
acknowledges that Netgateway has set its prices and entered into this Agreement
in reliance upon the limitations of liability and the disclaimers of warranties
and damages set forth herein, and that the same form an essential basis of the
bargain between the parties. The parties agree that the limitations and
exclusions of liability and disclaimers specified in this Agreement will survive
and apply even if found to have failed of their essential purpose.
7. INDEMNIFICATION.
7.1 NETGATEWAY'S INDEMNIFICATION OF SUBSCRIBER. Netgateway will
indemnify, defend and hold Subscriber harmless from and against any and all
costs, liabilities, losses and expenses (including, but not limited to,
reasonable attorneys' fees) (collectively, "LOSSES") resulting from any claim,
suit, action or proceeding (each, an "ACTION") brought against Subscriber
alleging the infringement of any third party registered U.S. copyright or issued
U.S. patent resulting from the provision of eCommerce Services pursuant to this
Agreement (but excluding any infringement contributorily caused by Subscriber's
Business).
7.2 SUBSCRIBER'S INDEMNIFICATION OF NETGATEWAY. Subscriber will
indemnify, defend and hold Netgateway, its affiliates and customers harmless
from and against any and all Losses resulting from or arising out of
Subscriber's breach of any provision of this Agreement or any Action brought
against Netgateway, its directors, employees, affiliates or Subscribers alleging
with respect to the Subscriber's Business: (a) infringement or misappropriation
of any intellectual property rights; (b) defamation, libel, slander, obscenity,
pornography or violation of the rights of privacy or publicity; (c) spamming, or
any other offensive, harassing or illegal conduct or violation of the Rules and
Regulations; or, (d) any violation of any other applicable law or regulation.
7.3 NOTICE. Each party will provide the other party, prompt written
notice of the existence of any such indemnifiable event of which it becomes
aware, and an opportunity to participate in the defense thereof.
8. DISPUTE RESOLUTION.
8.1 PROCEDURES. It is the intent of the parties that all disputes
arising under this Agreement be resolved expeditiously, amicably, and at the
level within each party's organization that is most knowledgeable about the
disputed issue. The parties understand and agree that the procedures outlined
in this Paragraph 8 are not intended to supplant the routine handling of
inquiries and complaints through informal contact with customer service
representatives or other designated personnel of the parties. Accordingly, for
purposes of the procedures set forth in this paragraph, a "DISPUTE" is a
disagreement that the parties have been unable to resolve by the normal and
routine channels ordinarily used for such matters. Before any dispute arising
under this Agreement, other than as provided in paragraph 8.5 below, may be
submitted to arbitration, the parties shall first follow the informal and
escalating procedures set forth below.
(a) The complaining party's representative will notify the other party's
representative in writing of the dispute, and the non-complaining party will
exercise good faith efforts to resolve the matter as expeditiously as possible.
(b) In the event that such matter remains unresolved thirty (30) days
after the delivery of the complainant party's written notice, a senior
representative of each party shall meet or confer within ten (10) business days
of a request for such a meeting or conference by either party to resolve such
matter.
(c) In the event that the meeting or conference specified in (b) above
does not resolve such matter, the senior officer of each party shall meet or
confer within ten (10) business days of the request for such a meeting or
conference by either party to discuss and agree upon a mutually satisfactory
resolution of such matter.
(d) If the parties are unable to reach a resolution of the dispute after
following the above procedure, or if either party fails to participate when
requested, the parties may proceed in accordance with paragraph 8.2 below.
8.2 BINDING ARBITRATION. Except as provided in paragraph 8.5 below, any
dispute arising under this Agreement shall, after utilizing the procedures in
paragraph 8.1, be resolved by final and binding arbitration in Los Angeles,
California, before a single arbitrator selected by, and in accordance with, the
rules of commercial arbitration of the American Arbitration Association or as
otherwise provided in Paragraph 11.6. Each party shall bear its own costs in
the arbitration, including reasonable attorneys' fees, and each party shall bear
one-half of the cost of the arbitrator.
8.3 ARBITRATOR'S AUTHORITY. The arbitrator shall have the authority to
award such damages as are not prohibited by this Agreement and may, in addition
and in a proper case, declare rights and order specific performance, but only in
accordance with the terms of this Agreement.
8.4 ENFORCEMENT OF ARBITRATOR'S AWARD. Any party may apply to a court of
general jurisdiction to enforce an arbitrator's award, and if enforcement is
ordered, the party against which the order is issued shall pay the costs and
expenses of the other party in obtaining such order, including reasonable
attorneys' fees.
8.5 ACCESS TO COURTS. Notwithstanding the provisions of paragraphs 8.1
and 8.2 above, any action by Netgateway to enforce its rights under Paragraphs
10.1 or 10.3 of this Agreement or to enjoin any infringement of the same by
Subscriber may, at Netgateway's election, be commenced in the state or federal
courts of Los Angeles, California, and Subscriber consents to personal
jurisdiction and venue in such courts for such actions.
9. TERM AND TERMINATION.
9.1 TERM. This Agreement will be effective on the date first above
written and will terminate eighteen (18) months ("INITIAL TERM") from the date
Subscriber begins processing live data through the Netgateway ICC-TM-, unless
earlier terminated according to the provisions of this Section 9. This
Agreement will automatically renew for successive additional terms of
one (1) year each unless a party hereto elects not to so renew and notifies
the other party in writing of such election by a date which is six (6) months
prior to the lapse of the Initial Term or any renewal term thereafter.
9.2 TERMINATION. Either party will have the right to terminate this
Agreement if: (i) the other party breaches any material term or condition of
this Agreement and fails to cure such breach within thirty (30) days after
receipt of written notice of the same, except in the case of failure to pay
fees, which failure must be cured within five (5) days after receipt of written
notice from Netgateway; (ii) the other party becomes the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation or composition for the benefit of creditors; or(iii)
the other party becomes the subject of an 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 sixty (60) days of filing. Subscriber shall have the right to
terminate the Agreement if the Netgateway servers which provide eCommerce
Services hereunder experience more than two percent (2%) down-time measured on
an annual basis; PROVIDED, HOWEVER, that down-time shall not include time
expended on regularly scheduled maintenance and other system upgrades.
9.3 NO LIABILITY FOR TERMINATION. Neither party will be liable to the
other for any termination or expiration of this Agreement in accordance with its
terms.
9.4 EFFECT OF TERMINATION. Upon the effective date of expiration or
termination of this Agreement: (a) Netgateway shall immediately cease providing
eCommerce Services; (b) any and all payment obligations of Subscriber under this
Agreement shall become due immediately; and (c) within thirty (30) days after
such expiration or termination, each party shall return all Confidential
Information of the other party in its possession at the time of expiration or
termination and shall not make or retain any copies of such Confidential
Information, except as required to comply with any applicable legal or
accounting record keeping requirements.
9.5 SURVIVAL. The following provisions shall survive any expiration or
termination of the Agreement: Sections 2, 3, 4, 5, 6, 7, 8, 9 and 10.
10. USE OF eCOMMERCE SERVICES - RULES AND REGULATIONS.
10.1 PROPRIETARY SYSTEMS. Subscriber acknowledges that the software
systems utilized by Netgateway in the provision of eCommerce Services hereunder,
including the Netgateway ICC-TM-, all enhancements thereto and all screens and
formats used in connection therewith, are the exclusive proprietary property of
Netgateway, and Subscriber shall not publish, disclose, display, provide access
to or otherwise make available any Netgateway eCommerce software or products
thereof, or any screens, formats, reports or printouts used, provided, produced
or supplied from or in connection therewith, to any person or entity other than
an employee of Subscriber without the prior written consent of, and on terms
acceptable to, Netgateway, which consent shall not be unreasonably withheld;
PROVIDED, HOWEVER, that Subscriber may disclose to a governmental or regulatory
agency or to customers of Subscriber any information expressly prepared and
acknowledged in writing by Netgateway as having been prepared for disclosure to
such governmental or regulatory agency or to such customers. Neither party
shall disclose Subscriber's use of eCommerce Services in any advertising or
promotional materials without the prior written consent to such use, and
approval of such materials, by the other.
10.2 USE OF SERVICES PERSONAL TO SUBSCRIBER. Subscriber agrees that it
will use the services provided hereunder only in connection with its eCommerce
business, and it will not, without the express written permission of Netgateway,
sell, lease or otherwise provide or make available eCommerce Services to any
third party.
10.3 SURVIVAL OF OBLIGATIONS. The obligations of this Section 10 shall
survive termination of this Agreement. Subscriber understands that the
unauthorized publication or disclosure of any of Netgateway' software or copies
thereof, or the unauthorized use of eCommerce Services would cause irreparable
harm to Netgateway for which there is no adequate remedy at law. Subscriber
therefore agrees that in the event of such unauthorized disclosure or use,
Netgateway may, at its discretion and at Subscriber's expense, terminate this
Agreement, obtain immediate injunctive relief in a court of competent
jurisdiction, or take such other steps as it deems necessary to protect its
rights. If Netgateway, in its reasonable, good faith judgment, determines that
there is a material risk of such unauthorized disclosure or use, it may demand
immediate assurances, satisfactory to Netgateway, that there will be no such
unauthorized disclosure or use. In the absence of such assurance, Netgateway
may immediately terminate this Agreement and take such other actions as it deems
necessary. The rights of Netgateway hereunder are in addition to any other
remedies provided by law.
11. MISCELLANEOUS PROVISIONS.
11.1 FORCE MAJEURE. Except for the obligation to pay money, neither party
will be liable for any failure or delay in its performance under this Agreement
due to any cause beyond its reasonable control, including act of war, acts of
God, earthquake, flood, embargo, riot, sabotage, labor shortage or dispute,
governmental act or failure of the Internet, provided that the delaying party:
(a) gives the other party prompt notice of such cause, and (b) uses its
reasonable commercial efforts to correct promptly such failure or delay in
performance.
11.2 NO LEASE. This Agreement is a services agreement and is not intended
to, and will not constitute, a lease of any real or personal property.
Subscriber acknowledges and agrees that: (i) it has been granted only a license
to use Netgateway's ICC-TM- and any equipment provided by Netgateway in
accordance with this Agreement, (ii) Subscriber has not been granted any real
property interest in the Netgateway's ICC-TM-, and (iii) Subscriber has no
rights as a tenant or otherwise under any real property or landlord/tenant laws,
regulations or ordinances.
11.3 MARKETING. Subscriber agrees that Netgateway may refer to Subscriber
by trade name and trademark, and may briefly describe Subscriber's business, in
Netgateway's marketing materials and web site. Subscriber hereby grants
Netgateway a license to use any Subscriber trade names and trademarks solely in
connection with the rights granted to Netgateway pursuant to this Section 11.3.
11.4 GOVERNMENT REGULATIONS. Subscriber will not export, re-export,
transfer or make available, whether directly or indirectly, any regulated item
or information to anyone outside the U.S. in connection with this Agreement
without first complying with all export control laws and regulations which may
be imposed by the U.S. Government and any country or organization of nations
within whose jurisdiction Subscriber operates or does business.
11.5 NON-SOLICITATION. Except with the prior consent of Netgateway,
which consent shall not be unreasonably withheld, during the period beginning
on the Operational Data and ending on the first anniversary of the
termination or expiration of this Agreement in accordance with its terms,
Subscriber agrees that it will not, and will ensure that its affiliates do
not, directly or indirectly, solicit or attempt to solicit for employment any
persons employed by Netgateway during such period.
11.6 GOVERNING LAW; DISPUTE RESOLUTION, SEVERABILITY; WAIVER. This
Agreement is made under and will be governed by and construed in accordance with
the laws of the State of California (without regard to that body of law
controlling conflicts of law) and specifically excluding from application to
this Agreement that law known as the United Nations Convention on the
International Sale of Goods. Any dispute relating to the terms, interpretation
or performance of this Agreement (other than claims for preliminary injunctive
relief or other pre-judgment remedies) will be resolved at the request of either
party through binding arbitration. Arbitration will be conducted in Los Angeles
County, California, under the rules and procedures of the Judicial Arbitration
and Mediation Society ("JAMS"). The parties will request that JAMS appoint a
single arbitrator possessing knowledge of online services agreements; PROVIDED,
HOWEVER, the arbitration will proceed even if such a person is unavailable. In
the event any provision of this Agreement is held by a tribunal of competent
jurisdiction to be contrary to the law, the remaining provisions of this
Agreement will remain in full force and effect. The waiver of any breach or
default of this Agreement will not constitute a waiver of any subsequent breach
or default, and will not act to amend or negate the rights of the waiving party.
11.7 ASSIGNMENT; NOTICES. Subscriber may not assign its rights or
delegate its duties under this Agreement either in whole or in part without the
prior written consent of Netgateway, except that Subscriber may assign this
Agreement in whole as part of a corporate reorganization, consolidation, merger
or sale of substantially all of its assets. Any attempted assignment or
delegation without such consent will be void. Netgateway may assign this
Agreement in whole or part. This Agreement will bind and inure to the benefit of
each party's successors and permitted assigns. Any notice or communication
required or permitted to be given hereunder may be delivered by hand, deposited
with an overnight courier, sent by confirmed facsimile, or mailed by registered
or certified mail, return receipt requested, postage prepaid, in each case to
the address of the receiving party indicated on the signature page hereof, or at
such other address as may hereafter be furnished in writing by either party
hereto to the other. Such notice will be deemed to have been given as of the
date it is delivered, mailed or sent, whichever is earlier.
11.8 RELATIONSHIP OF PARTIES. Netgateway and Subscriber are independent
contractors and this Agreement will not establish any relationship of
partnership, joint venture, employment, franchise or agency between Netgateway
and Subscriber. Neither Netgateway nor Subscriber will have the power to bind
the other or incur obligations on the other's behalf without the other's prior
written consent, except as otherwise expressly provided herein.
11.9 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement, including all
documents incorporated herein by reference, constitutes the complete and
exclusive agreement between the parties with respect to the subject matter
hereof, and supersedes and replaces any and all prior or contemporaneous
discussions, negotiations, understandings and agreements, written and oral,
regarding such subject matter. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
Subscriber's and Netgateway's authorized representatives have read the foregoing
and all documents incorporated therein and agree and accept such terms effective
as of the date first above written.
SUBSCRIBER
Signature: /s/ Woo Xxx Xxx Signature:
-------------------------- ------------------------
Print Name: Woo Xxx Xxx Print Name:
-------------------------- ------------------------
Title: CEO
--------------------------
NETGATEWAY
Signature: /s/ Xxxxxx X. Xxxxxxx, Xx. Signature:
-------------------------- ------------------------
Print Name: Xxxxxx X. Xxxxxxx, Xx. Print Name:
-------------------------- ------------------------
Title: President
--------------------------
EXHIBIT "A"
ELECTRONIC COMMERCE SERVICES ORDER FORM
NETGATEWAY
eCOMMERCE SERVICES ORDER FORM
SUBSCRIBER NAME: X0XXXXXXX.XXX INC.
FORM DATE: JULY 28, 1999
FORM NO.: 001
GENERAL INFORMATION:
1. By submitting this eCommerce Services Order Form ("FORM") to Netgateway,
Subscriber hereby places an order for the eCommerce Services described
herein pursuant to the terms and conditions of the Electronic Commerce
Services Agreement between Subscriber and Netgateway prefixed hereto (the
"ECS AGREEMENT").
2. Billing, with the exception of Development Fees, will commence on the
Operational Date set forth below or the date that Subscriber first begins
to process transactions through the Netgateway Internet Commerce Center,
whichever occurs first.
3. Netgateway will provide the eCommerce Services pursuant to the terms and
conditions of the ECS Agreement, which incorporates this Form. The terms
of this Form supersede, and by accepting this Form, Netgateway hereby
rejects, any conflicting or additional terms provided by Subscriber in
connection with Netgateway's provision of the eCommerce Services. If there
is a conflict between this Form and any other Form provided by Customer and
accepted by Subscriber, the Form with the latest date shall control.
4. Netgateway will not be bound by or required to provide eCommerce Services
pursuant to this Form or the ECS Agreement until each is signed by an
authorized representative of Netgateway.
SUBSCRIBER HAS READ, UNDERSTANDS AND HEREBY SUBMITS THIS ORDER.
Submitted By: /s/ Woo Xxx Xxx Operational Date: 8-9-99
----------------------- -----------------
(AUTHORIZED SIGNATURE)
Print Name: /s/ Woo Xxx Xxx
-----------------------
Title: CEO
-----------------------
NETGATEWAY ACCEPTANCE
/s/ Xxxxxx X. Xxxxxxx, Xx. Date: 8-4-99
------------------------------------- -----------------------------
(AUTHORIZED SIGNATURE)
NETGATEWAY
eCOMMERCE SERVICES ORDER FORM
Subscriber Name: X0XXXXXXX.XXX INC.
Form Date: July 28, 1999
Form No.: 001
TERMS:
1. DEVELOPMENT FEE. The initial development fee for the X0XXXXXXX.XXX and
XXXXXXXXXXX.XXX internet commerce system shall be [**REDACTED**] and
shall be due and payable in full upon submission of this Order Form.
2. PHASE SPECIFICATIONS. Phase specifications shall be as set forth on
Schedule A annexed hereto.
3. ICC COMMERCE RATE. Netgateway shall be entitled to transaction fees
based upon the following schedule:
ANNUAL GROSS SALES REVENUE TRANSACTON FEE RATE
-------------------------- -------------------
$ 0 TO $25,000,000
25,000,001 TO 50,000,000 [**REDACTED**]
50,000,001 TO $100,000,000
100,000,001 and over
For purposes hereof, gross sales revenue shall mean all revenues generated
from transactions processed through the Netgateway Internet Commerce Center
which are related to Subscriber.
4. FEE PER HIT. Netgateway to receive [**REDACTED**] per hit (as that term
is customarily understood in the industry).
5. BANNER ADVERTISING REVENUE. Netgateway to receive [**REDACTED**] of
all banner advertising revenue from ads placed by Subscriber or
Netgateway on Subscriber's web site or mall.
6. CLICK-THROUGH REVENUE. Netgateway to receive [**REDACTED**] of all
click-through revenue generated from advertisers placed by Subscriber or
Netgateway on Subscriber's web site or mall.
7. DEVELOPMENT TIMELINE: The X0XXXXXXX.XXX internet commerce center shall
be fully operational on or before August 9, 1999.
8. PUBLIC ANNOUNCEMENTS: X0XXXXXXX.XXX understands that Netgateway is a
public company and can be affected by the manner or content of public
announcements concerning this relationship. Neither party shall make any
public announcement of this Agreement or of the relationship they have
entered into without the prior written consent of the other.
Subscriber's Initial WJK
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