Website Development Agreement

Retail Web Site Service Agreement

RETAIL WEB SITE SERVICE AGREEMENT (the "Agreement"), made as of this day of , 20 (the "Effective Date") between Web Wares Worldwide, Inc., a New York corporation having its principal place of business as 1234 Avenue of the Americas, New York, New York 10036 ("Client"), and Global Virtual Designs, Inc., a Delaware corporation having its principal place of business at 2131 Broadway, New York, New York 10023 ("Consultant") (Client and Consultant are hereinafter collectively referred to as the "parties").

WHEREAS, Client wishes to establish a site on the World Wide Web portion of the Internet (the "Site") to make available certain materials;

WHEREAS, Client wishes to fulfill customer orders for certain products (the "Products") placed by means of the Site;

WHEREAS, Consultant is in the business of creating and operating sites on the World Wide Web and wishes to design, develop, implement, host, support and maintain the Site, for Client on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, Client and Consultant agree as follows:

1. Definitions

The following terms shall have the meanings set forth herein:

1.1. Client Content

All materials provided by Client to Consultant hereunder, including without limitation the Product Catalog and any other graphics, audio, or other materials in electronic form. Client Content shall include (i) any materials derived by Consultant from any materials provided by Client, including through the conversion of materials to a format ready for display on the Site and (ii) Site Activity Data.

1.2. Confidential Information

Any information relating to or collected in the course of the Agreement including, but not limited to, the material terms of this Agreement, technical processes and formulas, source code, product designs, sales, cost and other unpublished financial information; product and business plans, projections, customer lists, Site Activity Data, business relationships with other entities, marketing data, and all information regarding transactions and communications received by means of the Site.

1.3. Consultant Software

All software owned by Consultant at the time this Agreement is executed (except for software developed or obtained in anticipation of executing this Agreement), and which is employed by Consultant in connection with design, development, implementation, hosting, support and maintenance of the Site.

1.4. Deliverables

The software, services and other materials to be provided to Client by Consultant hereunder.

1.5. Error

Any failure of the Site, the Host Service, or any Software Deliverable to operate in accordance with its specifications or the terms and conditions of this Agreement.

1.6. Host Server

The server on which the Site is made available, in a live environment, to users. The Host Server shall comply with the performance specifications set forth in Schedule B.

1.7. Net Client Advertising Revenue

The amounts actually collected by Client arising from the sale of advertising on the Site, excluding amounts collected and remitted for sales or use taxes or duties and credits or refunds.

1.8. Net Product Revenue

The amounts actually collected by Client derived directly from the sale of Products through the Site, excluding (i) amounts collected for sales, use taxes or duties; (ii) all applicable discounts, returns, and credits; and (iii) the Processing Fees associated with the relevant orders.

1.9. Processing Fee

A fee to be determined by Client to be assessed to purchasers of Products over the Site to cover the cost of packaging, shipping, handling, and insuring Products.

1.10. Production Schedule

The production schedule provided by Consultant in accordance with Section 2.2 hereunder.

1.11. Product Catalog

The complete database of all Products provided by Client to Consultant, as updated by Client from time to time, which database shall be fully integrated by Consultant into the Site.

1.12. Products

Any merchandise made available for sale by Client through the Site.

1.13. Proposal

The documents attached as Schedule C hereto. The Proposal is intended to constitute a material part of this Agreement. In the event of a conflict between the Proposal and any other terms and conditions of this Agreement, the terms and conditions of the Agreement will prevail.

1.14. Site Activity Data

Any information pertaining to individuals accessing the Site, including information related to orders placed through the Site and information about users obtained through technological means.

1.15. Software Deliverables

All Deliverables containing software components.

1.16. Term

The time period for which this Agreement shall be in effect, commencing on the Effective Date hereof and ending ( ) years from the date the Site is fully operational and accessible to users over the Internet (the "Launch Date"), unless during that time (i) the Parties execute a writing renewing this Agreement pursuant to Section 13.5 hereof, or (ii) this Agreement is terminated pursuant to Section 13.1, 13.2, or 13.3 hereof.

1.17. Updates

Bug fixes or error corrections to the Software Deliverables during the Term, and any other modifications made by Consultant to the Software Deliverables.

2. Services

2.1. Services Performed by Consultant

Consultant shall perform the Services outlined in this Article 2 and as otherwise subsequently agreed to in writing between the Parties (collectively, the "Services") in accordance with the Production Schedule. All Services shall be performed under the highest professional standards, and all software used in the Site shall be based on open standard technologies. Each Deliverable rendered hereunder will be subject to Client's acceptance pursuant to the procedure set forth in Article 3.

2.2. Production Schedule

Consultant shall deliver a proposed Production Schedule within ( ) business days of the Effective Date hereof.

2.3. Consultant Deliverables

Upon Client's acceptance of the Production Schedule, Consultant shall develop and deliver all other Deliverables identified in this Agreement, including Schedule A hereto in accordance with the Production Schedule, each Deliverable being subject separately to the acceptance procedure set forth in Article 3.

2.4. Beta Testing

Within ( ) business days of Client's acceptance of all of the Deliverables, Consultant will make the complete Site available on a Host Server provided by Consultant for testing over the Internet by Client (the "Beta Test").

2.5. Hosting Services

Consultant shall operate and maintain the Site and the Host Server during the Term. Consultant shall provide all computer and telecommunications equipment and resources, including, without limitation, the hardware, server and ancillary software, communications lines, firewalls, and support services as specified in Schedule B hereto, and any other resources necessary for the Site to operate as contemplated by the performance specifications set forth in Schedule B hereto.

2.6. Modifications to the Site

From time to time during the Term, Consultant shall modify the Site as Client directs, including without limitation the creation of and uploading to the Host Server additional graphical, textual, audiovisual, or database elements.

2.7. Approval Required for Modifications

Consultant shall not alter, edit, or make any change in the Client Content without Client's prior written approval.

2.8. Training

Consultant shall provide Client with all software and information necessary for Client to update the Product Catalog or any other component of the Site, without Consultant's participation. Consultant will train the Client personnel designated by Client to use all functions of the Site. Such training shall consist of at least ( ) consecutive business days of training provided at a location designated by Client.

2.9. Technical Support

Consultant shall render technical support by telephone and e-mail, at no extra charge to Client, at Client's reasonable request. Consultant shall respond to Client within ( ) hour(s) of notification of any Error by telephone.

2.10. Backup Archives

All Site Activity Data shall be transmitted fully and completely on a daily basis (no later than p.m. (Eastern Time)) every day of the year to an e-mail address designated by Client.

2.11. Updates

During the Term, at no additional cost to Client, Consultant shall provide Updates for the Software Deliverables.

2.12. Advertising

(a) During the Term, both parties shall have the right to sell advertising on the Site. Promptly upon execution of this Agreement, the parties shall confer to determine a mutually acceptable price list and technical and design formats for advertising.

(b) Each party shall obtain the other's written approval prior to committing to any advertiser with respect to the suitability of hosting the particular advertising on the Site and the artistic and editorial content of the advertisement.

(c) Consultant agrees that it will cooperate fully with any entity selected by Client to produce, design, or develop such advertising and cooperate with Client in implementing technology to place advertising on the Site.

2.13. Domain Name

The Site shall be associated with a domain name chosen by Client and registered in Client's name by Consultant with Network Solutions, Inc. All right, title and interest in the domain name for the Site shall vest exclusively in Client.

3. Acceptance Testing of Deliverables

3.1. Testing of Deliverables

Upon the completion of any Deliverable hereunder, and upon determination by Consultant that the particular Deliverable satisfies all requirements herein, Consultant shall deliver to Client ( ) copies of such Deliverables.

3.2. Rejection of Deliverables

If Client rejects a Deliverable, Consultant will have the Acceptance Period specified in the Production Schedule for the particular Deliverable to implement any corrections, amendments or other changes necessary to resolve Client's objections to such Deliverable.

3.3. Right of Artistic and Editorial Control

Client shall have exclusive artistic and editorial control over the Site, including, without limitation, the implementation of the Client Content on the Site and the design and look and feel of the Site.

4. Payments

4.1. Commissions

Client shall pay Consultant: percent ( %) of Net Product Revenue received during each quarter during the Term, less a reserve against returns of percent ( %) and percent ( %) of Net Client Advertising Revenue received during each quarter during the Term.

4.2. Sales Reports and Payments by Client

Within ( ) days after each calendar quarter during the Term, Client shall send to Consultant sales reports and other financial reports and payments, as set forth in Schedule D attached hereto.

4.3. Taxes

Client shall be the seller of all Products purchased through the Site and will be responsible for any taxes associated with its income from the sale of Products through the Site.

5. Audit

Consultant shall have the right to perform such audit ( ) times per year during the Term.

6. Proprietary Rights

6.1. Grant of License by Client

Client grants to Consultant a non-exclusive, non-transferable, limited license, revocable at will by Client, to use the Client Content under the terms and conditions of this Agreement solely in connection with the establishment of the Site.

6.2. Proprietary Notice

Consultant shall cause the following notices to be displayed on each page of the Site on which Client Content is viewed:

(a) "Copyright (or (c)) 20 [relevant year] Web Wares Worldwide, Inc. All Rights Reserved."

(b) "[Client Mark] is a registered trademark [or service mark] of Web Wares Worldwide, Inc."

6.3. Trademark Usage

Consultant shall not use any Client Content or Client Marks, logos or other identifiers in any manner other than as is expressly provided for in this Agreement, or permit any third party to do so, without Client's prior written approval of the intended use.

6.4. Consultant Software

Consultant grants to Client a perpetual, irrevocable, non-exclusive, royalty free license for Client or its agents or assigns to use, modify, copy, transfer and maintain the Consultant Software in conjunction with the operation, maintenance, and updating of the Site.

6.5. Work Made For Hire

All materials, products, and modifications developed or prepared by Consultant under this Agreement are the property of Client and all right, title and interest therein shall vest in Client and shall be deemed to be a "work made for hire" under United States copyright law and made in the course of this Agreement.

6.6. Rights Clearance

Client shall be responsible for obtaining any permissions necessary to place the Client Content on the Site. Consultant shall have the full and complete responsibility to obtain any rights, licenses, clearances, releases or other permissions necessary for development of the Site as contemplated by this Agreement and to pay any fees or costs associated therewith.

7. Confidentiality

Consultant shall hold confidential all Client Confidential Information, including without limitation Site Activity Data, and shall not disclose or use such Client Confidential Information without express written consent of Client, or permit any third party to do so.

8. Site Activity Data

Client acknowledges and agrees that Consultant is and shall be the sole owner of all Site Activity Data. Consultant shall not copy, display, divulge to any third party or make any other use of the Site Activity Data without Client's express written consent.

9. Warranties, Representations And Covenants

9.1. By Consultant

Consultant represents, warrants and covenants that all Services will be rendered using sound, professional practices, the Site will be designed and operated in conformity with this Agreement, and Consultant has full authority to enter into this Agreement.

9.2. By Client

Client represents, warrants and covenants that it has full authority to enter into this Agreement and that the Client Content will not infringe upon any third party right.

10. Indemnification

Each party hereto shall indemnify, defend, and hold harmless the other party with respect to claims arising out of breach, gross negligence, or willful misconduct.

11. Insurance

Consultant shall procure and maintain at its own expense insurance, which must be satisfactory to Client, of the following type and amounts:

(i) statutory worker's compensation in accordance with Federal, state, and local requirements;

(ii) Professional Liability Insurance with a limit of not less than dollars ($ );

12. Limitation of Liability

Except with respect to liability arising from indemnification obligations, gross negligence, willful misconduct, or abandonment of obligations, neither party shall be liable for indirect, incidental, consequential, special or exemplary damages.

13. Term, Renewal, and Termination

13.1. Termination for Breach

Either Party may terminate this Agreement upon ( ) days' written notice if the other Party materially breaches any of the terms of this Agreement.

13.2. Termination for Bankruptcy and Similar Events

Either Party may terminate this Agreement, effective immediately upon written notice, if a proceeding is commenced by or against the other party and such proceeding is not dismissed within ( ) days.

13.3. Termination During Performance of Services

Client shall have the right to terminate this Agreement upon written notice to Consultant in the event that Client rejects any ( ) Deliverables rendered by Consultant during the course of the Services.

13.4. Obligations Upon Termination or Expiration

Upon termination or expiration of this Agreement, Consultant shall immediately deliver to Client all copies of Client Confidential Information, all records of user information, and any other material or work product produced hereunder which is owned by Client.

13.5. Renewal

Client shall have the right to renew this Agreement upon not less than ( ) days' written notice to Consultant.

13.6. Transfer of Site

Client shall have the right, at any time, to transfer the hosting and operation of the Site to its own server or the server of a designated third party.

13.7. Survival

Upon expiration or termination of this Agreement, the provisions of Article 1, Articles 6-10 inclusive, Article 12, Section 13.4, this Section 13.7, and Article 15 shall survive.

14. Time of the Essence

Consultant agrees to control any deviation from the Production Schedule by using best efforts to perform the Services in a timely manner. If Consultant fails to deliver any Deliverable in a form acceptable to Client within ( ) business days after the date such Deliverable was due, a credit shall accrue in Client's favor in the amount of dollars ($ ) for each day beyond the period.

15. General

15.1. Independent Contractors

Consultant and Client agree that they will be independent contractors.

15.2. Notices

Notices to Client shall be sent to the attention of Client's General Counsel or such other person(s) as Client may from time to time designate. Notices to Consultant shall be sent to the attention of the Chief Executive Officer or such other person(s) as Consultant may from time to time designate.

15.3. Waiver

Consultant and Client agree that the failure of either Party to insist upon or enforce strict performance by the other party shall not be construed as a waiver.

15.4. Assignment

Client may assign this Agreement to an affiliate or to a successor in interest and shall give Consultant notice of such assignment within ( ) days thereof.

15.5. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

15.6. Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.