1
EXHIBIT 10.3
CONFIDENTIAL TREATMENT REQUESTED
VIRTUAL ISP AGREEMENT
This Agreement is entered into as of this 8th day of December, 1998
(the "Effective Date"), by and between INTEREACH INTERNET SERVICES, LLC, a
Georgia limited liability company ("InteReach") with its principal place of
business at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000, and
MAXXIS GROUP, INC., a Georgia corporation ("Partner") with its principal place
of business at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000.
WHEREAS, InteReach is a national Internet service provider ("ISP"),
providing dial-up Internet access and other Internet services; and
WHEREAS, InteReach provides certain Internet services as defined in the
attached Schedule A (hereinafter referred to as "Services") on a nonexclusive
basis at wholesale or discounted prices; and
WHEREAS, Partner desires to contract with InteReach for certain
Internet services, according to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the above premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, both parties agree as follows:
I. TERM OF AGREEMENT
The initial term (the "Initial Term") of this Agreement shall begin on
the Effective Date and continue until June 30, 2001. The Initial Term shall
automatically renew for consecutive one year terms, unless terminated as set
forth herein.
II. DUTIES OF PARTNER
A. Efforts. Partner shall utilize commercially reasonable efforts
to recruit and obtain dial-up accounts for the Internet
services provided hereunder ("Partner Accounts").
B. Professionalism. Partner shall at all times act in a
professional manner, utilizing reasonable standards of conduct
for the industry.
C. Starter Kits. Partner shall have the right to provide to
Partner Accounts any starter kits solely as determined in
Partner's discretion.
III. DUTIES OF INTEREACH: SERVICES
A. InteReach agrees to provide Partner with the Services outlined
in Schedule A for resale to the Partner Accounts. The Services
shall be branded as services of
2
Partner, and Partner shall have complete discretion as to the
prices to be charged to Partner Accounts therefor. Partner
shall be responsible for the billing of Partner Accounts for
the Services including the establishment invoicing and
collection of all charges to Partner Accounts, provided
however, that, during the period from the date first set forth
above until such time as Partner provides to InteReach notice
to the contrary, InteReach will be responsible for: (i)
preparing and delivering invoices to all Partner Accounts
which invoices will be branded with the Partner's name and
logo only and will direct that remittance of payment be made
to InteReach, if the Partner Account is making payment by a
credit card transaction ("Credit Card Accounts"), or to
Partner, if the Partner Account is making payment in any other
form; and (ii) collection of all charges to Credit Card
Accounts.
Upon notice from Partner to InteReach of Partner's desire to
undertake such billing responsibilities ("Billing Notice
Date") InteReach will: (i) transfer such responsibilities to
Partner; (ii) assist in the transition of such
responsibilities in any reasonable manner as requested by
Partner; and (iii) reduce the Unlimited Internet Access fee
(as set forth on Schedule A) by an amount equal to that
portion of the cost associated with each Partner Account
allocable to such responsibilities or as agreed upon by the
parties. InteReach will use its best efforts to provide the
Services upon the date hereof. InteReach reserves the right to
reconfigure the Services, upon a minimum of 30 days' written
notice to Partner, provided the reconfiguration furnishes
functionally equivalent or better Services at no additional
cost to Partner.
B. During the term of this Agreement, Partner may increase the
number of Services, in accordance with InteReach's then
current price schedule and prevailing commercial practices, by
giving InteReach advance written request for increased
services.
C. InteReach will take reasonable efforts to minimize any
downtime or loss of Services.
D. Notwithstanding anything to the contrary herein, InteReach
agrees that all accounts obtained due to the efforts of
Partner shall be and remain the property of Partner and that
Partner may move any such Partner Accounts to its own or
another system at any time it wishes. InteReach agrees to
provide all reasonable assistance to Partner to effectuate any
transfer of the Partner Accounts.
IV. PRICING AND PAYMENT
A. All Partner Accounts will be billed directly each month by
Partner, except as provided in Section III (A).
B. Partner shall calculate the remittance due to InteReach with
regard to the Partner Accounts and remit the amounts
prescribed under this Agreement to InteReach no
2
3
later than the last day of each month for the previous month's
billable activities, together with a report of all account
activity for said previous month, provided that, with regard
to invoices delivered to Credit Card Accounts prior to the
Billing Notice Date, InteReach shall retain the fee due to
InteReach applicable thereto and will remit to Partner all
remaining amounts no later than the last day of each month for
the previous month's billable activities, together with a
report of all account activity for said previous month.
V. DEFAULT STARTING PAGE
A. The starting default page (the "Default Page") will be set in
the browser by the Partner for each of Partner's subscribers.
The Default Page may be hosted on the InteReach server if the
Partner so desires, but the Partner reserves the right to host
the Default Page on any server the Purchaser wishes.
B. Partner shall be solely responsible for all content of the
Default Page. Partner agrees to indemnify and hold harmless
InteReach against any claim asserted against InteReach
(including reasonable attorney's fees) as a result of
Partner's inclusion of any material contained in the Default
Page, provided that, upon the receipt of notice of such claim
by InteReach, InteReach shall promptly give written notice of
such claim to Partner and provided further that Partner shall
have control of the defense of any such claim and the
negotiations for its settlement or compromise.
VI. TERM AND TERMINATION
A. Subsequent to the Initial Term, either party may terminate
this Agreement provided that the terminating party provides
the other party with 90 days prior notice of such termination.
B. Either party may terminate this Agreement if the other party
commits a material breach of any term of this Agreement which
is not remedied within 30 days after delivery of written
notice of such breach by the non-breaching party.
C. Upon termination of this Agreement: (i) all rights and
licenses of either party hereunder shall immediately
terminate; and (ii) both parties shall return any confidential
information, and all copies thereof, in their possession,
custody and control and will cease all uses of any trade
names, trademarks, service marks, logos and other
designations.
VII. TRANSFERABILITY
InteReach shall not assign any right or interest under this Agreement
or delegate any work or other obligation to be performed or owned by InteReach
under this Agreement without the prior written consent of Partner, which consent
shall not be unreasonably withheld. Any
3
4
attempted assignment or delegation in contravention of the above provision shall
be void and ineffective.
VIII. OWNERSHIP OF VISP PROGRAM SUBSCRIBERS
All Partner Accounts acquired pursuant to this Agreement are the
property of Partner.
IX. MARKETING OF ANCILLARY SERVICE AND GOODS
Partner shall have the exclusive right to control which parties
(including InteReach) may market ancillary products and services to Partner
Accounts.
X. LIMITATION OF LIABILITY
A. Services. InteReach will make every reasonable effort to have
the Services available 24 hours a day, 7 days a week ("24/7").
However, InteReach cannot and does not guarantee such
Services. Furthermore, InteReach's sole liability to Partner
or any third party for claims, not withstanding the form of
such claims (contract, negligence or otherwise), arising out
of (1) the unavailability of the InteReach system; or (2) the
interruption in or delay of Service provided or to be provided
by InteReach shall be for InteReach to use its best efforts to
make the InteReach system available and/or to resume the
Services as promptly as reasonably practical; provided,
however, that no provision of this paragraph shall be
construed as an indemnification by Partner of any potential
claims of third parties for which InteReach may ultimately be
held responsible.
B. Other than as set forth herein, InteReach makes no warranties,
express or implied, of any kind regarding the InteReach
Services provided hereunder, including any implied warranty of
merchantability of fitness for a particular purpose, all of
which are expressly disclaimed.
C. InteReach shall not be responsible for any damage to Partner
or Partner Accounts as a result of any interruption,
termination or other failure of InteReach Services, including
loss of data, unless caused by InteReach's own negligence or
willful misconduct. Use of any information obtained via
InteReach Services is at Partner's and Partner Accounts' own
risk. InteReach specifically disclaims responsibility for the
accuracy or quality of the information obtained through
InteReach Services. Partner further agrees that InteReach
shall not be liable for any special, incidental, indirect,
punitive or consequential damages or for lost profits,
business or revenues arising out of or in connection with this
Agreement or the services provided hereunder, whether suffered
by Partner, any of Partner Accounts or any party claiming
rights derived therefrom, even if InteReach shall have been
advised in advance of the possibility of such potential loss
or damage. In no event shall InteReach's aggregate liability
to Partner with respect to any Partner Account
4
5
exceed the amount of all fees and charges actually paid by
Partner or charged to a Partner Account in respect thereof for
the one-month period immediately prior to InteReach's actions
giving rise to such damages; provided, however, that no
provision of this paragraph shall be construed as an
indemnification by Partner of any potential claims of third
parties for which InteReach may ultimately be held
responsible.
D. Neither party shall be liable for delays or failure to deliver
or perform due to acts of God, acts of the other party, acts
of civil or military authorities, fires, strikes, floods or
other similar events beyond its control.
E. The provisions of this Section X shall continue in full force
and effect notwithstanding an effective termination of this
Agreement.
XI. CONFIDENTIALITY OBLIGATIONS
A. Each party hereunder may disclose to the other party certain
Trade Secrets and Confidential Information (as defined below).
For purposes hereof "Owner" refers to the party disclosing
Trade Secrets or Confidential Information hereunder and
"Recipient" refers to the party receiving any Trade Secrets or
Confidential Information hereunder. Recipient agrees to hold
the Trade Secrets and Confidential Information of Owner in
strictest confidence and not to directly or indirectly copy,
reproduce, distribute, manufacture, duplicate, reveal, report,
publish, disclose, cause to be disclosed, or otherwise
transfer the Trade Secrets or Confidential Information of
Owner to any third party or utilize the Trade Secrets or
Confidential Information of Owner for any purpose whatsoever
other than as expressly contemplated by this Agreement. With
regard to Trade Secrets, this obligation shall continue for so
long as such information constitutes a Trade Secret under
applicable law; with regard to the Confidential Information
this obligation shall continue for the term of this Agreement
and for a period of five (5) years thereafter.
B. For purposes hereof "Trade Secrets" means information which:
(a) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic
value from its disclosure or use; and (b) is the subject of
efforts that are reasonable under the circumstances to
maintain its secrecy. For purposes hereof "Confidential
Information" means information, other than Trade Secrets, that
is of value to its owner and is treated as confidential. To
the extent consistent with the foregoing, customer lists shall
constitute Trade Secrets or Confidential Information as
appropriate.
5
6
XII. MISCELLANEOUS
A. Confidentiality. Both parties agree not to disclose the terms
of this Agreement, including fees and charges set forth
herein, unless required by applicable law.
B. Survival of Obligations. The respective obligations of Partner
and InteReach under this Agreement, which by their nature
would continue beyond the termination, cancellation, or
expiration hereof, shall survive termination, cancellation, or
expiration hereof.
C. Severability. If any of the provisions of the Agreement shall
be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate or render unenforceable
the entire Agreement, but rather the entire Agreement shall be
construed as if not containing the particular invalid of
unenforceable provision or provisions, and the rights and
obligations of each party shall be construed and enforced
accordingly. However, in the event such provision is
considered an essential element of this Agreement, the parties
shall promptly negotiate a replacement thereof.
D. Nonwaiver. No course of dealing, course of performance or
failure of either party to strictly enforce any term, right or
condition of this Agreement shall be construed as a waiver of
any term, right or condition.
E. Choice of Law. The construction, interpretation and
performance of this Agreement shall be governed by the laws of
the State of Georgia, without regard to its conflict of law
principles.
F. Entire Agreement. The terms and conditions contained in this
Agreement supersede all prior oral or written understandings
between the parties and shall constitute the entire agreement
between them concerning the subject matter of this Agreement
and shall not be contradicted, explained or supplemented by
any course of dealing between InteReach or any of its
affiliates and Partner or any of its affiliates.
XIII. ASSISTANCE WITH NETWORKTWO CONTRACT NEGOTIATION
InteReach agrees to use its best efforts to assist Partner in the
negotiation of an agreement with NetworkTwo Communications Group, Inc.
("NetworkTwo") with respect to the provision of Services to Partner by
NetworkTwo. Such assistance by InteReach may include, without limitation,
introducing Partner to persons at NetworkTwo with whom InteReach has had prior
contact. Both parties acknowledge and expect that any such agreement between
NetworkTwo and Partner would be on substantially the same terms as the current
agreement dated as of July 10, 1998 with respect to the purchase and provision
of Services between InteReach and NetworkTwo.
* * * * *
6
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on behalf of each by a person with full power and authority to bind
such party.
INTEREACH PARTNER
InteReach Internet Services, LLC Maxxis Group, Inc.
By: /s/ Xxxxxx Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------------- --------------------------------
Name: Xxxxxx Xxxxxxxxxx Name: Xxxxxx X. Xxxxx
Title: Executive Director Title: President and CEO
7
8
SCHEDULE A
SERVICES
1. INITIAL PROGRAMMING & SET-UP
Customization of the VIRTUAL ISP Program by:
A. Programming the Partner's subscriber Starter Dial-Up Kits to
automatically log on to a screen customized with Partner's
brand name and logo, each time the subscriber logs on to the
Internet.
B. Programming the on-line registration server to automatically
update Partner via e-mail with newly registered subscribers.
2. UNLIMITED INTERNET ACCESS*:
This includes dial-up access through the cities listed in the InteReach
Pop List, one e-mail account, newsgroups, all technical support,
customer service and automated billing.
Monthly Retail Price to Subscriber: To be determined by Partner
Monthly Wholesale Price for Partner:
-------------------------------------- -------------------------------------
Number of Subscribers at Access Rate Charged for All
end of month Subscribers**
-------------------------------------- -------------------------------------
1 - 25,000 $***
-------------------------------------- -------------------------------------
25,000 - 75,000 $***
-------------------------------------- -------------------------------------
75,001 - 150,000 $***
-------------------------------------- -------------------------------------
150,001 - 200,000 $***
-------------------------------------- -------------------------------------
200,001 - $***
-------------------------------------- -------------------------------------
*Unlimited Access means that a subscriber may connect to the network as
often as he or she likes, for a total of 150 hours per month. Any hours used at
over 150 hours per month are billed at $1.00 per hour.
**This per subscriber per month fee shall be reduced by $1.00 for each
Partner Account that is deemed uncollectible by Partner for any particular
month.
-----------------------------
*** Omitted pursuant to a request for confidential treatment and filed
separately with the Commission.
9
3. WEB HOSTING SERVICES
InteReach provides the following Web Hosting Services at no additional
charge:
2mb of storage space
FTP access
4. ANCILLARY SERVICES
Partner may offer enhanced or ancillary Web-based services on terms and
conditions agreed upon by the parties.
5. STATEMENTS OF WORK - NETWORK
The InteReach dialup network provides the following:
- 300 dialup locations throughout the United States and Canada
- Notwithstanding anything to the contrary in this Agreement,
InteReach will provide 90% guaranteed system uptime
- 24/7 system monitoring to detect system problems and to insure
system performance
- 33.6k connect speeds in 90% of the system Points of Presence
(PoP)
- 56k V.90 connect speeds in 75% of the system Points of
Presence (PoP) within 90 days of execution of this contract
6. STATEMENT OF WORK - CALL CENTER
A. Customer Support
The InteReach customer support center provides the following:
- 24/7 Availability
- Perform Initial PD/PSI (Problem Determination/Problem
Source Indemnification):
- Search Database(s) for rediscovery/similar problems
- Use knowledge and tools to answer usage questions
10
- Work Questions to Point of Resolution
- Provide how-to information to customer
- Provide solution/resolution to customer
- Re-route misdirected customer calls
- Transfer to Appropriate Escalation Team if Necessary
- Gather pertinent information for follow-up before
transfer
- Assist customer with setting proper priority/severity
of problem
- Perform problem management function
- Recording/Documenting
- Document problem in escalation record
- Utilize help desk tools and resources
B. Acceptance Criteria
InteReach agrees to provide the following Service Level
Agreement (SLA) targets for Live Operator Support Services:
Service Delivery Transition Metric Steady State Metric
---------------- ----------------- -------------------
Call Logging 100% 100%
Live Answer 60% 90%
First Call Resolution 70% 90%
Call Abandonment Rate 8% 5%
Average Answer Delay < 45" < 30"
C. Order Desk
The InteReach customer support center provides the following:
- Toll free order number
- Capture of customer's information
- Capture and assignment of proper "offer code"
- 24/7 Availability
2
