Web Site Development and Services Agreement

Web Site Development and Services Agreement

This AGREEMENT (the "Agreement"), in connection with the design and hosting of a Web Site on the World Wide Web ("WWW"), is made and entered into as of day of , 19 ("Effective Date"), by and between XYZ, Inc., a New York corporation located at 123 Third Avenue, New York, New York 10012 ("XYZ") and PDQ Software, a Delaware corporation located at 345 West 45th Street, New York, New York 10036 ("PDQ").

WITNESSETH

WHEREAS, PDQ is in the business of offering Internet services relating to, among other things, development of sites on the WWW portion of the Internet and hosting of such sites, and is willing to provide services to XYZ on the terms and subject to the conditions set forth below; and

WHEREAS, XYZ desires to engage PDQ, and PDQ desires to be engaged by XYZ, to provide Internet services on the terms and subject

NOW, THEREFORE, in consideration of the mutual promises set forth herein, PDQ and XYZ (collectively, the "Parties") hereby agree as follows:

1. Definitions

1.1 Additional Services

The term "Additional Services" shall mean the services described in Article 2.5 of this Agreement, including the services identified in Schedule 1 hereto.

1.2 Available

The term "Available" shall mean the status of the Web Site being accessible via the WWW portion of the Internet by End Users, as defined in Article 1.6 below.

1.3 Beta Site Testing

The term "Beta Site Testing" shall mean the series of tests of the Web Site (as that term is defined in Article 2.1 below), in the sole and absolute discretion of XYZ, to be performed by XYZ, or a third party under XYZ's control, to determine the acceptability of the Web Site.

1.4 End User Database

The term "End User Database" shall mean the database to which PDQ will establish a link to the Web Site created and hosted hereunder, for use as described in Schedule 1.

1.5 End User Interface

The term "End User Interface" shall mean all aspects of the look and feel, navigational structure, method of use, interfaces, icons, buttons and logos associated with any aspect of the Web Site, including without limitation, any software or documentation which is part of the Web Site and which embodies or renders such aspects.

1.6 End Users

The term "End Users" shall mean end users, whether individuals or entities, anywhere in the world who have the capability to access the Web Site.

1.7 Host Server

The term "Host Server" shall mean the dedicated server as described in Schedule 1, connected to the WWW, that is to house the Web Site upon receipt of the Acceptance Letter and allow access to End Users (as defined herein).

1.8 Hosting Services

The term "Hosting Services" shall mean the hosting services described in Schedule 1 to this Agreement.

1.9 Initial Pages

The term "Initial Pages" shall refer to the first () Pages for the Web Site which are to be developed according to the Approved Specifications in consideration for the Development Fee as defined in Article 7.1.

1.10 Initial Term

The term "Initial Term" shall have the meaning set forth in Article 11.1 of this Agreement.

1.11 Monthly Hours

The term "Monthly Hours" shall refer to the () hours available to XYZ for Hosting Services from PDQ each month of the Term in consideration for the Hosting Fee.

1.12 Page

The term "Page" shall refer to any one of the pages of content contained in the Web Site to be developed, maintained and hosted hereunder according to the terms herein.

1.13 Promotion Services

The term "Promotion Services" shall mean all services to be provided by PDQ in connection with the launch, promotion, marketing, and attraction of End Users to the Web Site, as more particularly described in .

1.14 Renewal Period

The term "Renewal Period" shall mean any successive one year period following the expiration of the Initial Term which has been renewed and extended beyond the Initial Term pursuant to Article 11 herein and during which this Agreement shall remain in effect.

1.15 Site Activity Report(s)

The term "Site Activity Report" shall mean the reports created by PDQ that are delivered to XYZ hereunder on a weekly basis as part of the Hosting Services, using a software product that conforms with the Approved Specifications and other required functionality, as more particularly described in Schedule 1. Each Site Activity Report will provide all information gathered by PDQ regarding use of the Web Site.

1.16 Term

The term "Term" shall mean the Initial Term together with all Renewal Periods hereunder.

1.17 XYZ Content

The term "XYZ Content" shall mean any materials provided by XYZ for incorporation in the Web Site, including, but not limited to, any images, photographs, illustrations, graphics, audio clips, video clips or text.

1.18 XYZ Project

The term "XYZ Project" shall mean the Services, the Web Site and the Page Development (as defined in Article 2.4) to be performed by PDQ under the term of this Agreement.

1.19 Web Site

The term "Web Site" shall mean the web site to be developed by PDQ for XYZ pursuant to this Agreement as defined in Article 2.1.

2. Development Services

2.1 Scope of PDQ Services Subject to the terms and conditions of this Agreement, PDQ shall, at no cost to XYZ other than as expressly set forth herein, timely perform the services and deliver the materials as described in this Agreement ("Deliverables") and on the applicable Schedules annexed hereto, and as subsequently agreed to in writing by the Parties, in order to design, develop and deliver to XYZ a web site (the "Web Site") on the WWW portion of the Internet so that the Web Site may be accessed by End Users, and to update and provide the Hosting Services with respect to the Web Site, all as provided herein (the "Services").

2.2 Web Site Development and Implementation As part of the Services, PDQ shall complete each of () milestones ("Milestone(s)") in connection with development of the Web Site, according to the schedule for each such Milestone set forth in Schedule 2 hereto.

2.2.1 Web Site Definition PDQ shall consult with XYZ regarding definition for the Web Site and shall deliver a written detailed functional description ("the Web Site Definition") which shall include, without limitation, the layouts for links to other sites, and linking specifications and communication procedures for the End User Database, to XYZ for approval ("Milestone 1"). XYZ will review the definition and approve or reject such definition in XYZ's sole discretion by sending a written notice to PDQ ("Milestone 2"). If the Web Site Definition is rejected by XYZ, XYZ will provide written reasons for the rejection and PDQ will correct and re-deliver such definition within () business day(s).

2.2.2 Specifications Subject to Section 2.2.6, if the Web Site Definition is accepted by XYZ, PDQ, in consultation with XYZ, shall then prepare detailed written specifications consistent with, and containing (1) all of the functionality set forth in Schedule 1 for the specific number of Pages (as determined by XYZ) of the Initial Pages, to be initially created by PDQ; and (2) the Web Site Definition including, without limitation, the End User Interface for the Web Site, the layouts and positioning for hypertext, buttons or navigation bar links to other sites that are requested to be linked by XYZ, the location and layout of sound and video clips and the procedure for interacting with the End User Database, and the maintenance of all of the foregoing (collectively the "Specifications") and deliver such Specifications to XYZ for approval, according to the implementation plan set forth in Schedule 2. XYZ will review the Specifications and approve or reject the Specifications in XYZ's sole discretion by sending a written notice to PDQ ("Milestone 3"). If the Specifications are rejected by XYZ, XYZ will provide written reasons for the rejection and PDQ will correct and re-deliver such Specifications within () business days.

2.2.3 Approval of Specifications The Specifications which have been approved in writing by XYZ ("Approved Specifications") shall automatically become incorporated by reference into this Agreement.

2.2.4 Prototype PDQ will develop the Web Site according to the Approved Specifications and install and implement the Web Site in a semi-final state of completion ("Prototype") in PDQ's offices or another PDQ location, provided that the Prototype is accessible by XYZ (the "Server"). PDQ will present a Prototype review of the Web Site to XYZ ("Prototype Review"). XYZ will explore and test the Prototype during the remainder of Prototype Review through means of remote secured password protected access to the Server and communicate any required changes in writing to PDQ at the completion of Prototype Review ("Milestone 4").

2.2.5 Acceptance of the Web Site PDQ will incorporate the changes resulting from Prototype Review and install and implement the completed Web Site, according to the Approved Specifications, in final form on the Server within () business days of completion of Milestone 4. PDQ will notify XYZ that the final Web Site has been installed on-line and is ready for Beta Site Testing ("Milestone 5"). XYZ shall have two weeks for Beta Site Testing of the Web Site and will notify PDQ at the completion of the two week period of XYZ's acceptance or rejection of the Web Site in XYZ's sole discretion by sending a written notice to PDQ. If XYZ rejects the Web Site, XYZ may in its sole discretion, either (1) submit written notice of errors and defects ("Defects") with the Web Site to PDQ and PDQ shall have () business days to correct such Defects, or (2) terminate this Agreement according to Article 2.2.6 below, and have no further obligation or liability of any kind to PDQ. If XYZ accepts the Web Site, XYZ will send to PDQ a letter of acceptance ("Acceptance Letter"). Upon receipt of such letter, PDQ make Available the Web Site on the dedicated Host Server ("Milestone 6"). PDQ will also, upon receipt of the Acceptance Letter, immediately provide to XYZ all source code and HTML, CGI scripts, all artwork and final copies of all other Deliverables, in an electronic or magnetic media to be mutually agreed upon. XYZ's acceptance of any Milestone hereunder shall not represent a waiver of any of PDQ's ongoing obligations hereunder.

2.2.6 Termination of the Project During Implementation XYZ may, at any of the six Milestones, terminate this Agreement, instruct PDQ to de-install the Web Site from both the Test Server and the dedicated Host Server, to the extent that installation has occurred. In such event, each party will return all Confidential Information of the other party, PDQ shall return all XYZ Content to XYZ, and neither party shall have any further obligation to the other except the provisions herein that survive termination of this Agreement according to Article 12.13.

2.2.7 Initial Pages PDQ agrees, at no additional charge to XYZ beyond the Development Fee, to develop, install and implement all of the Initial Pages as individual web Pages, according to the Approved Specifications, within the Web Site containing the characteristics specified by XYZ in its sole discretion from time to time as part of the XYZ Project ("Initial Page Development"). Any other Pages requested by XYZ after the number of Initial Pages have been depleted will be an Additional Service to be performed by PDQ pursuant to Article 2.4. Each Page, whether or not part of the Initial Pages, will be subject to the written approval of XYZ in advance of implementation into the Web Site.

2.2.8 Delivery of XYZ Content XYZ shall deliver the initial XYZ Content to PDQ within () days of execution of this Agreement, or as otherwise agreed between the parties. XYZ shall deliver additional XYZ Content to PDQ as mutually agreed throughout the XYZ Project and during the Term.

2.2.9 Change Order Procedure If, at any time after XYZ has communicated its approval of the Specifications, XYZ wishes to implement any revisions to the Web Site that deviate in any material respect from the Approved Specifications (other than updates to the XYZ Content in any portion of the Web Site), XYZ shall submit to PDQ a written change order request ("Request") containing such revisions in detail. PDQ agrees to incorporate such revisions into the Approved Specifications (and incorporate the revisions into the Web Site) at no additional cost to XYZ, to the extent that they do not require substantial labor hours to implement. In the event that such revisions do require substantial labor hours to implement, PDQ shall within () business day of receipt of the Request, submit to XYZ a proposed change order ("Change Order"), including a fixed price quote and containing the scope of the revisions to be performed. Upon XYZ's written agreement to the Change Order, it shall thereupon become an amendment to this Agreement.

2.3 Hosting Services Upon receipt of the Acceptance Letter of the Web Site by XYZ, Hosting Services shall commence and shall continue for the Term of this Agreement, unless earlier terminated according to the terms herein.

2.4 Additional Services PDQ agrees to perform certain additional services to develop and implement additional pages to the Web Site, as specified by XYZ (the "Additional Services"). With respect to such Additional Services, the Parties shall execute a work order form (each an "Order Form") in the form attached hereto as Schedule 3, upon which each such Schedule 3 shall be incorporated into and shall become a part of this Agreement and shall be subject to the terms and conditions hereof. Additional Services will be provided by PDQ in consideration for the Additional Fees indicated in Schedule 4.

2.5 Dedicated Server The Host Server shall be dedicated to the Web Site and will not be used to host any other web sites. PDQ shall host the Web Site on the Host Server beginning as of receipt of the Acceptance Letter. If at any time during the Term, XYZ elects to transition the Web Site to a non-dedicated server, XYZ shall give () days notice to PDQ of such election. PDQ shall thereafter host the Web Site on such non-dedicated server beginning as of the first day of the first calendar month following the expiration of such -day period, and shall discontinue invoicing XYZ for the Dedicated Server Fee set forth in Schedule 4 as part of the Hosting Fee, as of that date.

3. Web Site Performance

3.1 Performance Characteristics As part of the Services, PDQ will ensure the following with respect to the Web Site performance:

3.1.1 Uptime Except as otherwise agreed in writing by the Parties, the Web Site and the Hosting Services shall be Available and fully accessible to End Users via the WWW twenty-four hours per day, seven (7) days per week, with the sole exception of scheduled maintenance periods, which, when otherwise agreed to in writing shall last no longer than () hour per week but which shall not be scheduled on any day between the hours of a.m. and p.m., Eastern Time.

3.1.2 Unique Domain Name The Web Site shall be hosted by PDQ for XYZ under a unique domain name, selected by XYZ, dedicated exclusively to the XYZ Web Site ("Domain Name(s)"), and no other Web site, content, data, information or materials shall be located under such unique Domain Name(s) other than as necessary to host the Web Site on behalf of XYZ. PDQ will register such Domain Name with InterNIC or other such Internet administrative party on XYZ's behalf, if requested by XYZ, and XYZ will be the registered owner and contact. All such Domain Name(s) will be the sole and exclusive property of XYZ and XYZ will have sole and exclusive control over such Domain Name(s).

3.1.3 Technology Update During the Term of this Agreement, PDQ shall, at no additional cost to XYZ, ensure that the Server, the Web Site and all Pages are maintained so as to be compatible with, and accessible to End Users using, the then-current developments, versions and updates of Internet-related technology, within a reasonable time after such technology becomes commercially available. Without limitation of the foregoing, PDQ agrees that at all times during the Term of this Agreement, and at no extra cost to XYZ, the Web Site will be compliant with the then-current and most recent HTML specification, and will be optimized for viewing with the then-current and most recent versions of the Microsoft Internet Explorer and Netscape Navigator browsers. To the extent that any generally available developments, versions and updates of Internet-related technology make available any new or enhanced features or functionality that can be incorporated into the Web Site and the Pages, PDQ will offer to alter the Web Site and Pages to take advantage of such technical developments. Such services shall be offered to XYZ by PDQ as part of a proposal that will include prices, specification descriptions and estimated delivery dates, all subject to PDQ's treatment of XYZ as its most favored customer.

3.1.4 Response Time The Host Server from which an End User accesses the Web Site shall have a response time, measured at the Host Server, from the receipt at the Host Server of a request until the commencement of the responsive process from the Host Server, of no more than () second(s), provided, however that XYZ may terminate this Agreement pursuant to Article 11.2 at its reasonable discretion if the response time to End Users is unreasonably slow.

4. Hosting Services

4.1 Web Site Hosting Services Upon receipt of the Acceptance Letter at no additional charge beyond the Hosting Fee as identified in Schedule 4, PDQ will expend labor hours to maintain the Web Site on the WWW (including the Maintenance and Support Services described in Article 4.4 below), up to the number of Monthly Hours, and shall update the Web Site with new XYZ Content supplied in the discretion of XYZ. These Hosting Services shall include the dedicated Host Server and its upkeep and maintenance, T-1 Bandwidth, weekly Site Activity Reports, technical support for, and maintenance of, the Web Site and Pages and repairs, and all services as set forth in Articles 3 and 4 of this Agreement. To the extent that Monthly Hours are depleted in the provision of Hosting Services during any particular month, PDQ will expend any necessary number of additional labor hours (subject to the advance approval of XYZ) to conduct the Hosting Services for that month, which will initially be deducted from any remaining Monthly Hours that were not fully utilized during any prior month of the Term, and after depletion of all available Monthly Hours remaining from prior months, will be chargeable to XYZ at the Hourly Rate set forth in Schedule 4, provided that the applicable approvals were obtained. Hosting Services will be provided for a period of () year(s) commencing upon receipt of the Acceptance Letter. Thereafter, the Hosting Services may be extended for successive Renewal Periods as set forth in Article 11.1, provided that after termination of two (2) Renewal Periods, the Hosting Fee for any subsequent Renewal Periods is subject to re-negotiation between the parties Initial Term, the Hosting Fee for any Renewal Period will be agreed upon by the parties, subject to PDQ's treatment of XYZ as its most favored customer.

4.2 End User Database Maintenance The maintenance of the End User Database shall be in accordance with the Approved Specifications and shall include, without limitation, the loading of new End User Records (as defined in Schedule 1) and the population of all fields in the End User Database for the corresponding new End Users. Such maintenance of the End User Database, to be performed by PDQ in consideration for the Database Maintenance Fee, as set forth in Schedule 4 ("Database Maintenance"). Such Database Maintenance shall include without limitation, the receipt, loading and updating of information, supplied by End Users of the Web Site and shall be performed, on a weekly basis, to account for all of the End Users who have filled in an on-line registration form (or modified a pre-existing registration form) in the preceding week.

4.3 Storage In the event that the Web Site requires storage and transfer on the Host Server which exceeds the amount of storage included in the Hosting Services, XYZ may request that PDQ acquire additional incremental storage to be included in the Hosting Services at no additional cost to XYZ. PDQ shall provide the Hosting Services so that the Web Site is accessible to third parties via the WWW portion of the Internet as specified herein. PDQ shall convert XYZ Content received from XYZ and update the Web Site with such material throughout the Term.

4.4 Maintenance and Support Services to XYZ During the Initial Term and any Renewal Period, PDQ shall provide the following maintenance and support services to XYZ as part of the Monthly Hours as described in Article 4.1, in accordance with standards set forth in the Approved Specifications, at no additional cost to XYZ other than the Hosting Fee:

4.4.1 Access to Help PDQ shall provide XYZ, with support services as part of the Hosting Services that shall include, without limitation: (i) creating, maintaining and updating help and support pages accessible by End Users within and as a part of the Web Site including a list of frequently asked questions, and (ii) a PDQ help desk accessible by XYZ twenty-four hours per day seven days per week, provided that after PDQ's business hours, the help desk support will be accomplished through a pager to a PDQ employee capable of addressing problems with the Web Site and/or Server and providing the services as contemplated in this Article 4. PDQ will provide XYZ with this pager number (and employee name) as of the date the Hosting Services commence and will provide updated information as applicable.

4.4.2 PDQ Service Response Time PDQ shall, use best efforts to correct, within three (3) hours of the time of discovery by PDQ or notification to PDQ (the "Time of Discovery"), any defects, errors or omissions in the Web Site discovered by PDQ or communicated to PDQ by XYZ, which materially impact the performance, delivery, accessibility or availability of the Web Site. In the event PDQ is unable to comply with the requirements set forth in the foregoing sentence, then XYZ shall be entitled to a credit of dollars ($) against any fees due hereunder for each hour beginning one hour after Time of Discovery, until the defect, error or omission has been corrected and the performance, delivery, accessibility or availability of the Web Site has been restored to be in accordance with this Agreement.

5. Proprietary Rights And License

5.1 XYZ Content All XYZ Content shall remain the sole and exclusive property of XYZ, including, without limitation, all copyrights, trademarks, patents, trade secrets and any other proprietary rights. Nothing in this Agreement shall be construed to grant PDQ any ownership right in, or license to, the XYZ Content, except as provided in Article 5.5 of this Agreement. To the extent that PDQ updates, modifies, combines or otherwise creates any derivative work from XYZ Content, such shall be part of the Work Product subject to Article 5.2 below.

5.2 Web Site Proprietary Rights All materials included in or pertaining to the Web Site and Pages and all other Deliverables hereunder, any updates or modifications thereto or derivative works thereof, and all ideas, designs, and formats embodied therein, including but not limited to any computer software (in object code and source code form), script, animation sequences, the User Interface, programming code, applets, data, information or HTML or other scripts developed or provided by PDQ or its suppliers under this Agreement, audiovisual displays created hereunder for XYZ (collectively, the "Work Product") are and shall remain the property of XYZ, and all rights, title and interest therein shall vest in XYZ and shall be deemed to be a "work made for hire" for XYZ and made in the course of the Services rendered hereunder. To the extent that title to the Work Product does not, by operation of law, vest in XYZ or is not considered works made for hire, then all right, title and interest therein are hereby irrevocably assigned to XYZ. The Work Product, all copyright, trademark, trade dress, trade secret, patent and other proprietary rights therein shall belong exclusively to XYZ with XYZ having the right to obtain and to hold in its own name copyright registrations and such other protections as may be appropriate to the subject matter, and any extensions and renewals thereof. In addition, any and all data and information about, or provided by, End Users of the Web Site at any time whether or not included in the database and/or any report ("User Information"), shall remain the sole and exclusive property of XYZ, shall be considered XYZ's Confidential Information, as defined in Article 5.3, and all rights, title and interest therein shall vest in XYZ. All such User Information gathered or in the possession of PDQ will be forwarded to XYZ upon receipt by PDQ. PDQ agrees to give XYZ any reasonable assistance required to perfect the rights defined in this Article.

5.3 Confidentiality During the course of this Agreement, information that is confidential or proprietary to one party ("Disclosing Party") may be disclosed to the other party ("Receiving Party"), including, but not limited to software, technical processes and formulas, source codes, product designs, sales, cost and other unpublished financial information, product and business plans, advertising revenues, usage rates, advertising relationships, projections, and marketing data ("Confidential Information"). Confidential Information shall not include information that the Receiving Party can demonstrate (a) is, as of the time of its disclosure, or thereafter becomes part of the public domain through a source other than the Receiving Party, (b) was known to the Receiving Party as of the time of its disclosure, (c) is independently developed by the Receiving Party, or (d) is subsequently learned from a third party not under a confidentiality obligation to the Disclosing Party. Except as provided for in this Agreement, each party shall not make any disclosure of the Confidential Information to anyone other than its employees who have a need to know in connection with this Agreement. Each party shall notify its employees of their confidentiality obligations with respect to the Confidential Information and shall require its employees to comply with these obligations. The confidentiality obligations of each party and its employees shall survive the expiration or termination of this Agreement.

5.4 PDQ Links PDQ shall be permitted to place a credit and logo on the Web Site which will be in a font size, format and location to be determined by XYZ that links to PDQ's homepage. PDQ shall provide proof of ownership of any mark proposed to be used by PDQ as an icon and proof of its trademark registration of any proposed logo to be included in such placement. In the event that XYZ approves such a link to the PDQ homepage, PDQ will install a hypertext link on its homepage, according to the design for such hypertext link included in the Approved Specifications, to link to the Web Site, and will include on its homepage or in its linked guest-use policy that owners of linked pages and web sites have no involvement with, control over or responsibility for, the content or performance of PDQ's site.

5.5 Grant of License to PDQ XYZ hereby grants to PDQ a non-exclusive, worldwide, royalty-free license for the Initial Term and any Renewal Period to edit, modify, adapt, translate, exhibit, publish, transmit, participate in the transfer of, reproduce, create derivative works from, distribute, perform, display, and otherwise use XYZ Content and Work Product solely to the extent necessary to render the Services to XYZ under this Agreement. At XYZ's request at any time, PDQ shall destroy or deliver to XYZ all copies of the XYZ Content, Work Product and other materials provided to PDQ. In no event shall PDQ use any trademarks or service marks of XYZ without XYZ's prior written consent. Unless otherwise agreed in writing by XYZ, the transfer or attempted transfer of the Web Site to any host server other than the dedicated Host Server shall automatically terminate the foregoing license.

6. Content

6.1 Accuracy and Review of XYZ Content XYZ assumes sole responsibility for (a) acquiring any authorization(s) necessary for hypertext links to third party Web sites from the Web Site, (b) the accuracy of materials provided to PDQ, including, without limitation, XYZ Content and (c) ensuring that the XYZ Content does not infringe or violate any right of any third party.

7. Fees And Taxes

7.1 Web Site Development Fee In consideration for the Services and the Initial Page Development to be rendered by PDQ as defined herein, XYZ shall pay to PDQ, according to the payment schedule in Schedule 4 attached hereto, the firm fixed fee as designated in Schedule 4 ("Development Fee"). The Development Fee shall constitute the entire compensation for all work in connection with the XYZ Project, including without limitation downloading XYZ Content, development of all Initial Pages, all HTML programming and all other tasks identified in Schedule 1 and/or the Approved Specifications.

7.2 Hosting Fees XYZ shall pay a monthly fee ("Hosting Fee") for Hosting Services as described in Article 4.1 and as set forth in Schedule 4, payable on or before the first day of each month throughout the Term. XYZ shall pay a monthly fee ("Site Activity Report Fee") for the receipt of Site Activity Reports as set forth in Schedule 4, payable on or before the first day of each month throughout the Term.

7.2.1 Database Maintenance Fees XYZ shall pay the Database Maintenance fee ("Database Maintenance Fee") for each labor hour expended by PDQ for the maintenance of the End User Database as set forth in Article 4.2, provided that XYZ has given advance prior approval for any number of labor hours expended in excess of () hours.

7.3 Additional Fees Unless otherwise agreed by the Parties, XYZ shall have no obligation to pay any additional amounts beyond the Development Fee, the Hosting Fees, the pre-approved Database Maintenance Fees and the Site Activity Report Fee. In the event that XYZ requests Additional Services or any other services that are not part of the XYZ Project, Initial Page Development or Hosting Services or Maintenance Services, XYZ shall pay PDQ at the Hourly Rate specified in Schedule 4, not to exceed the maximum amounts specified in Schedule 4, per hour. These hourly rates will be applicable for any work requested by XYZ for the period of two (2) years from the date of receipt of the Acceptance Letter.

7.4 Taxes XYZ shall pay or reimburse PDQ for all sales and use taxes levied or imposed by reason of the performance by PDQ under this Agreement; excluding, however, income taxes on PDQ's gross income, employment taxes and taxes based on professional licenses or business operations which may be levied against PDQ.

7.5 Profit Derived from Web Site PDQ shall have no right to any profits derived from the sale, use or application of the Web Site.

8. Warranties

8.1 PDQ Warranties PDQ makes the following ongoing representations and warranties to XYZ:

8.1.1 The Web Site and all Deliverables hereunder (except for XYZ Content provided by XYZ) will be PDQ's own and original creation, except for information validly licensed by PDQ or in the public domain;

8.1.2 The Web Site and all Deliverables will include only information that PDQ is authorized to use and to authorize XYZ to use;

8.1.3 The Web Site, all Deliverables, and their use will not constitute a libel or defamation, or conflict with or infringe upon or violate any copyrights, trademark rights, patent rights, trade secret rights, rights of publicity or privacy or other rights of, and will not cause injury to, any third party;

8.1.4 Use of the Web Site and all Deliverables, will not give rise to any claims against XYZ for any guild or other royalty fees or payments of any kind;

8.1.5 Except with respect to the XYZ Content, all obligations owed to third parties with respect to the activities contemplated to be undertaken by PDQ in providing the Services to XYZ and under this Agreement, including but not limited to all third-party licensing fees, are or will be fully paid up by PDQ so that XYZ will not have any obligations with respect thereto;

8.1.6 The Web Site, all Deliverables and all materials contained therein conform and will conform to all applicable federal, state and local laws and regulations;

8.1.7 The Web Site and all Deliverables meet and conform with the Approved Specifications and each of the functional, operational and performance standards set forth or described in this Agreement, and the information contained therein is and will be true and accurate;

8.1.8 The Web Site and all Deliverables will be free from defects in material and workmanship under normal use and remain in good working order;

8.1.9 The Web Site and all Deliverables will be free from any pre-programmed devices, such as "viruses" or other such devices, that will cause any component thereof to be erased or become inoperable or incapable of processing or affect operations of other systems; and

8.1.10 PDQ has the power and authority to enter into and perform its obligations under this Agreement, and PDQ's Services under this Agreement shall be performed in a workmanlike manner.

8.2 XYZ Warranties XYZ represents and warrants that (a) XYZ has the power and authority to enter into and perform its obligations under this Agreement, (b) XYZ Content does not and shall not contain any content that is inaccurate or that infringes on or violates any right of a third party, and that XYZ owns the XYZ Content or otherwise has the right to place the XYZ Content on the Web Site and (c) XYZ has obtained any authorization(s) necessary for hypertext links from the Web Site to other third party Web sites.

8.3 Disclaimer of Warranty THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY THE RESPECTIVE PARTIES. THE PARTIES EXPRESSLY DISCLAIM, AND HEREBY EXPRESSLY WAIVE, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

9. Indemnification

9.1 XYZ XYZ agrees to indemnify, defend, and hold harmless PDQ, its directors, officers, employees and agents, and defend any action brought against same with respect to any third party claim, demand, cause of action, debt or liability, including reasonable attorneys' fees, to the extent that such action is based upon (i) a claim that any of the XYZ Content as provided by XYZ hereunder (provided that PDQ has followed XYZ's Approved Specifications and all instructions included with such XYZ Content) infringes or violates any rights of third parties, including, without limitation, rights of publicity, rights of privacy, patents, copyrights, trademarks, trade secrets and/or licenses, and/or (ii) any breach of this Agreement by XYZ or any act or omission or alleged act or alleged omission by XYZ in connection with this Agreement.

9.2 PDQ PDQ agrees to indemnify, defend, and hold harmless XYZ, its directors, officers, employees and agents, and defend any action brought against same with respect to any claim, demand, cause of action, debt or liability, including reasonable attorneys' fees, to the extent that such action arises out of or in connection with (i) the gross negligence or willful misconduct of PDQ, (ii) PDQ's breach of any covenants, warranties or representations made herein and/or (iii) any breach of this Agreement by PDQ or any act or omission or alleged act or alleged omission by PDQ in connection with this Agreement.

9.3 Notice In claiming any indemnification hereunder, an indemnified party shall promptly provide the indemnifying party with written notice of any claim which the indemnified party believes falls within the scope of the foregoing paragraphs. An indemnified party may, at its own expense, assist in the defense if it so chooses, provided that the indemnifying party shall control such defense and all negotiations relative to the settlement of any such claim and further provided that any settlement intended to bind an indemnified party shall not be final without the indemnified party's written consent, which shall not be unreasonably withheld.

10. Limitation Of Liability

XYZ SHALL HAVE NO LIABILITY UNDER ANY CIRCUMSTANCES FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES EVEN IF XYZ HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE LIABILITY OF XYZ, REGARDLESS OF THE BASIS OF THE CLAIM, FOR ANY REASON AND UPON ANY CAUSE OF ACTION SHALL BE LIMITED TO THE TOTAL AMOUNT OWED TO PDQ BY XYZ HEREUNDER. THIS LIMIT OF LIABILITY IS A MATERIAL TERM OF THIS AGREEMENT AND XYZ'S EXECUTION OF THIS AGREEMENT WAS DEPENDENT UPON ITS INCLUSION.

11. Termination And Renewal

11.1 Term This Agreement shall be effective when signed by the Parties and thereafter shall remain in effect for the Term as herein defined. The Hosting Services shall commence upon receipt of the Acceptance Letter and continue for two (2) years thereafter, unless earlier terminated as otherwise provided in this Agreement (the "Initial Term"). This Agreement shall be renewed beyond the Initial Term for additional one (1) year Renewal Periods at the option of XYZ upon ten (10) days written notice to PDQ prior to the end of the Initial Term and/or in the then-current Renewal Period.

11.2 Termination Either party may terminate this Agreement if a bankruptcy proceeding is instituted against the other party which is acquiesced in and not dismissed within sixty (60) days, or results in an adjudication of bankruptcy, or the other party materially breaches one or more of its representations, warranties or obligations under this Agreement, and such breach is not cured within thirty (30) days of receipt of notice specifying the breach.

11.3 Termination for Convenience XYZ shall have the right to terminate this Agreement for convenience at any time during the Term, with thirty (30) days written notice to PDQ. If such termination occurs within the first eight (8) months of the Initial Term, then XYZ shall pay PDQ the Hosting Fees due as of the date of such termination and an amount equal to the Hosting Fees which would have been due PDQ for the remainder of such initial eight-month period. If such termination occurs at any time after the expiration of the first eight (8) months of the Initial Term, then XYZ shall pay to PDQ the Hosting Fees due as of the date of such termination and five percent (5%) of the Hosting Fees which would have been due PDQ based on the number of months remaining in the Initial Term or the then-current Renewal Period, as applicable. Except as set forth in this Section 11.3 and with respect to the provisions of this Agreement that survive termination, XYZ shall have no further obligation to PDQ in connection with the termination of this Agreement for XYZ's convenience.

11.4 Termination and Returns Upon any termination or expiration of this Agreement for any reason, PDQ shall deliver to XYZ all Deliverables for which XYZ has tendered payment and each party shall return all Confidential Information of the other party.

11.5 Transition Obligation Upon any termination or expiration of this Agreement, PDQ shall, at no additional charge to XYZ, provide all reasonably requested support in the transitioning of the Hosting Services to XYZ or a third party vendor selected by XYZ, in its sole discretion, including without limitation the transfer and any necessary conversion of all software, HTML, databases and consulting regarding technology hosting requirements.

12. Miscellaneous

12.1 Entire Agreement This Agreement and attached Schedules constitute the entire Agreement between XYZ and PDQ with respect to the subject matter hereof and there are no representations, understandings or agreements which are not fully expressed in this Agreement. To the extent that there is a conflict between the terms of this Agreement and the Specifications, the terms and conditions of this Agreement shall govern in the area of the conflict.

12.2 Independent Contractors PDQ and its personnel, in performance of this Agreement, are acting as independent contractors and not employees or agents of XYZ. No PDQ personnel shall have the authority to bind XYZ or otherwise create legal obligations on behalf of XYZ.

12.3 Amendments No amendment, change, waiver, or discharge hereof shall be valid unless in writing and signed by an authorized individual of the party against which such amendment, change, waiver, or discharge is sought to be enforced, except the automatic amendment procedures described herein.

12.4 XYZ Identification PDQ may not use the name or identify XYZ in any capacity, in advertising, publicity, press releases, marketing collateral or similar materials distributed or displayed to prospective clients, without XYZ's advance written permission. Subject to the foregoing, PDQ shall have the right to insert a link from its "hotlinks" URL ("www.pdq.com/clients/index.html/") to the Web Site, provided however that such link shall be discontinued by PDQ immediately upon any termination of the Hosting Services, or this Agreement, unless XYZ provides written notice to the contrary for any reason to PDQ prior to, or concurrent with, such termination.

12.5 Force Majeure If the performance of any part of this Agreement by either party is prevented, hindered, delayed or otherwise made impracticable by reason of any flood, riot, fire, judicial or governmental action, labor disputes, act of God or any other causes beyond the control of either party, that party shall be excused from such to the extent that it is prevented, hindered or delayed by such causes, provided that the party claiming force majeure has taken all reasonable measures to avoid such cause.

12.6 Governing Law This Agreement shall be governed in all respects by the laws of the State of New York without regard to its conflict of laws provisions, and XYZ and PDQ agree that the sole venue and jurisdiction for disputes arising from this Agreement shall be the appropriate state or federal court located in the State of New York, and XYZ and PDQ hereby submit to the jurisdiction of such courts.

12.7 Assignment PDQ shall not assign, without the prior written consent of XYZ, its rights, duties or obligations under this Agreement to any person or entity, in whole or in part, whether by assignment, merger, transfer of assets, sale of stock, operation of law or otherwise, and any attempt to do so shall be deemed a material breach of this Agreement.

12.8 Notice Any notice provided pursuant to this Agreement shall be in writing and may be sent only by personal delivery, registered or certified mail (return receipt requested), or by overnight express mail (e.g.; Federal Express), or courier shipment if outside the United States, if such service actually provides proof of mailing. The day of mailing of any such notice will be deemed the date of the giving thereof (except notices of change of address, the date of which will be the date of receipt by the receiving party). Facsimile transmissions will not constitute valid notices hereunder, whether or not actually received. All notices shall be addressed as follows (or to such other address as either party may in the future specify in writing to the other party):

12.9 Waiver The waiver of failure of either party to exercise any right in any respect provided for herein shall not be deemed a waiver of any further right hereunder or a subsequent exercise of the same right in a subsequent situation.

12.10 Severability If any provision of this Agreement is determined to be invalid under any applicable statute or rule of law, it is to that extent to be deemed omitted, and the balance of the Agreement shall remain enforceable.

12.11 Counterparts This Agreement may be executed in several counterparts, all of which taken together shall constitute one single agreement between the Parties hereto.

12.12 Headings The section headings used herein are for reference and convenience only and shall not enter into the interpretation hereof.

12.13 Survival All provisions of this Agreement relating to PDQ warranties, confidentiality, non-disclosure, proprietary rights, limitation of liability, PDQ indemnification obligations and payment obligations shall survive the termination or expiration of this Agreement.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.