NETGATEWAY, INC.
ELECTRONIC COMMERCE SERVICES AGREEMENT
THIS ELECTRONIC COMMERCE SERVICES AGREEMENT (the "Agreement") is made
effective as of the Acceptance Date set forth in the initial eCommerce Series
Order Form (October 1, 1999) accepted by Netgateway, a Nevada corporation
("Netgateway"), and the subscribed identified below ("Subscriber"). PARTIES:
Subscriber Name: iChargeit.com, Inc.
Address: 300 Pacific Coast Highway, Suite 308
Huntington Beach, California 92648
Phone: 714/594-0441 Fax: 714/374-0220
Netgateway, Inc.
300 Oceangate, Suite 300
Long Beach, California 90802
Phone: 562/308-00_0 Fax: 562/308-00_1
1. ELECTRONIC COMMERCE SERVICES.
1.1 ECOMMERCE SERVICES. Subject to the terms and conditions of this
Agreement, during the term of this Agreement, 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 substantially similar services if such substantially
similar services would provide Subscriber with substantially similar benefits,
all on a non-exclusive basis (the "eCommerce Services"). All such eCommerce
Services Order Forms will be incorporated herein by this reference as of the
Acceptance Date set forth in each such form. megate3way 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, marked Exhibit "A", and by this reference made a
part hereof. This Agreement shall replace and supercede in all respects the Term
Sheets between the parties, dated January 26, 1999 and March 5, 1999,
respectively (collectively, the "Term Sheets").
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 ENHANCEMENT. 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
initialed by Netgateway or Subscriber at no additional cost. Any new features or
services that may be developed by Netgateway during the term 1
of this Agreement that Netgateway intends to offer to subscribers on a
limited or optional basis may, at Netgateway's option and subject to
Subscribers' acceptance, be made available to Subscriber at Netgateway's
then-current prices for such new features or services. 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 in the eCommerce Services, and any new features or services
introduced by Netgateway, shall remain the exclusive proprietary property ofNetgateway.
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 suchdata.
(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. The eCommerce Services Order Forms shall set forth the
financial obligations of the parties under this Agreement. Subscriber will pay
all fees and amounts in accordance with the eCommerce Services Order Forms.
2.2 BILLING COMMENCEMENT. Billing for eCommerce Services indicated in
the eCommerce Services Order Forms (including the eCommerce Rate, Fee Per Hit,
Banner Advertising and Click Through Revenue), other than any initial
Development Fee, shall commence on the "Operational Date" indicated in the
eCommerce Services Order Forms, unless otherwise provided in the eCommerce
Services Order Form. 2
2.3 BILLING AND PAYMENT TERMS. Netgateway shall invoice Subscriber
monthly in advance of the provision of Internet commerce Services, and payment
of such fees will be due within thirty (30) days of the date of each Netgateway
invoice. All payments will be made in U.S. dollars, late payments hereunder will
accrue interest at a rate of one and one-half percent (1-1/2%) per month, or the
highest rate allowed by applicable law, whichever is lower. If in its reasonable
judgment Netgateway determines that Subscriber is not creditworthy or is
otherwise not financially secure, Netgateway may, upon prior written notice to
Subscriber, modify the payment terms to require full payment before the
provision of eCommerce Services or other assurances to secure Subscriber's
payment obligations hereunder.
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 eCommerce Services hereunder. Any such taxes, which
may be applicable will 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 bandwidth for Subscriber's website at no additional charge. Should
Subscriber need 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 LAW 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 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 for the provision of any services that
compete with any Netgateway services, without Netgateway's prior writtenconsent. 3.4 INSURANCE.
(a) MINIMUM LEVELS. Subscriber will keep in full force and
effect during the term of this Agreement: (i) comprehensive general liability
insurance in an amount not less than 4% 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 3
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 industries.
(b) CERTIFICATES OF INSURANCE. Prior to the Operational 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 prior to the Operational 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 advisers as reasonably necessary) any of the other
party's Confidential Information and will take reasonable precautions to
protect the confidentiality of such information.
4.2 EXCEPTIONS. Information will not be deemed Confidential
Information hereunder if such information: (it 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) 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 what would violate any applicable law or regulation.
(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 4
(iii) The use, reproduction, distribution and transmission of
the web site, or any information or material 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 orpublicity.
(b) RULES AND REGULATIONS. Subscriber has read the Rules and
Regulations (Section 10 below) an 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, WITNESS 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,
ERROR0-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 PLOW 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 OR 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 (R PORTIONS THEREOF) MAY BE IMPAIRED OR DISRUPTED.
ALTHOUGH NETGATEWAY WILL USE COMMERCIALLY REASONABLE REPORTS 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 5
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 NOTE 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,
MISSIONS, 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 WILLFUL
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, NETGATEWAY'S MAXIMUM AGGREGATE LIABILITY TO SUBSCRIBER
RELATED TO OR IN CONNECTION WITH THIS AGREEMENT WILL BE LIMITED TO THE TOTAL
AMOUNT PAID BY SUBSCRIBER TO NETGATEWAY HEREUNDER FOR THE PERIOD CONSISTING
OF THE PRIOR THREE (3) FULL CALENDAR MONTHS.
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. Subscriber agrees that it will not
pursue any claims against Netgateway for any liability Netgateway may have
under or relating to this Agreement until Subscriber first makes claims
against Subscriber's insurance provider(s) and such insurance provider(s)
finally resolves(s) such claims. 6
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'sBusiness).
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"
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 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 this
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 aspossible. 7
(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 of 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 procedures, 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 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 other is issued shall pay
the costs and expenses of the other party in obtaining such order, including
responsible 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 0.3 of this Agreement or to enjoin any infringement of the same by
Subscriber may, at Netgateway election, be commenced in the state of 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 three (3) years ("Initial Terms") from the date
Subscriber begins processing live data through Netgateway ICC(TM), unless
earlier terminated according to the provisions of this Section 9. This
Agreement will automatically renew for an additional term of three (3) years
unless a party hereto elects not to so renew and notifies the other party I
writing of such election by a date, which is six (6) months prior to the
lapse of the Initial Term.
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 must be cured within five (5) days after receipt
of written notice from Netgateway; (ii) 8
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.
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 this effective date of expiration
or termination of this Agreement: (a) Netgateway will immediately cease
providing the eCommerce Services; (b) any and all payment obligations of
Subscriber under this Agreement will become due immediately; and (c) within
thirty (30) days after such expiration or termination, each party will return
all Confidential Information of the other party in its possession at the time
of expiration or termination and will not make or retain any copies of such
Confidential Information except as required to comply with any applicable
legal or accounting record keeping requirement.
9.5 SURVIVAL. The following provisions will 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 all enhancements thereto and all screens and
formats used in connection therewith where 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 theother.
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 paragraph 10
shall survive termination for this Agreement. Subscriber understands that the
unauthorized publication or disclosure of any of Netgateway software or
copies thereof, or the unauthorized use of eCommerce Service 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 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 takesuch 9
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 steps 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 set or failure of the
Internet, provided that the delayed 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 service agreement and is not
intended to and will not constitute a lease of any real or personal property.
Subscribed acknowledges and agrees that (i) it has been granted only a
license to use Netgateway's ICC 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, and (iii) Subscriber has no
rights as a tenant or otherwise under any real property of 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 or nations within whose jurisdiction Subscriber operates or doesbusiness.
11.5 NON-SOLICITATION. 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 of 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 10
Mediation Society ("JAMS"). The parties will request that JAMS appoint a
single arbitrator possessing knowledge of online services agreements; 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 or 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 or substantially all of its assets. Any attempted assignment of
delegation without such consent will be void. Netgateway may assign this
Agreement in whole or part. This Agreement will bin 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. 11
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/ Jesse Cohen Signature: --------------------------- --------------------------
Print Name: Jesse Cohen Print Name: --------------------------- -------------------------- Title: CEO -------------------------------- NETGATEWAY:
Signature: /s/ Donald M. Corliss Signature: --------------------------- --------------------------
Print Name: Donald M. Corliss Jr. Print Name: --------------------------- --------------------------
Title: President
