540 DEGREES, INC. dba GATEWAY ARTS
SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of________, 20___ by
and between 540 DEGREES, INC. dba GATEWAY ARTS, a California Corporation,
having its principal place of business at 2363 Teller Road, Suite 121,
Newbury Park,CA 91320(hereinafter referred to as "AGENCY") and WEB4BOATS.COM
having its principal place of business at 6150 LaJolla Mesa Drive, LaJolla,
CA 92037 (hereinafter referred to as "CLIENT").
RECITALS
WHEREAS, CLIENT desires to retain AGENCY for the purpose of all marketing,
advertising and communications with regard to CLIENT's web site, commonly
known as www.web4boats.com (hereinafter the "web site"); and,
WHEREAS, AGENCY desires to provide these services to CLIENT on the following
terms and conditions.
NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by AGENCY and CLIENT (referred to herein together as "Parties"
and separately as "Party"), the Parties hereby
agree as follows:
1. SERVICES TO BE PROVIDED.
1.1. WEB SITE HOSTING. CLIENT agrees that it will contract directly with
HOSTPRO of Los Angeles, California for web site hosting services. AGENCY
agrees that it will supervise and manage said web site hosting services on
behalf of CLIENT. This supervision and management will necessarily include,
but not be limited to: (i) the negotiation of fair market rates with HOSTPRO
for web hosting services; (ii) advising CLIENT as to hosting options; (iii)
working with HOSTPRO to achieve CLIENT's goal of 99% up-time for the web
site; and (iv) managing graphic and programming updates to the web site.
1.2. TESTING. AGENCY agrees to complete the following tests on the web site
at the frequency indicated to ensure proper functionality: (i) on a twice
daily basis - all links between the web site home page and second-level
pages, placement of a classified advertisement, and searches for
boat purchases; (ii) on a daily basis - all links between second-level pages
and lower pages, and external links to other web sites.
1.3. UPDATES AND EXPANSION. AGENCY agrees to manage and produce all updates
and expansion to the web site. Said management shall include graphical
changes to enhance the appearance of the web site, and expansion of site
content. Specific services shall include, but not be limited to strategy,
design, copywriting and html programming.
1.4. MARKETING. AGENCY agrees to undertake efforts to increase traffic to
the web site, as well as internal traffic within the web site. Said efforts
shall include, but not be limited to, the writing and designing of web ad
banners, arranging and creating link exchanges with other web sites;
competitive analysis and the planning and design of advertisements and direct
mail campaigns. Additional marketing efforts shall include the development
of affinity relationships with third party organizations to generate revenue
for CLIENT.
1.5. PROGRAMMING. AGENCY agrees that it shall retain staff with a working
knowledge of the ColdFusion programming language used to build the web site.
With this working knowledge, AGENCY shall perform the above-mentioned
services on an "in-house" basis. AGENCY shall also oversee and manage
Contracted Programming as described below in
Section 1.6.
1.6. CONTRACTED PROGRAMMING. CLIENT acknowledges that AGENCY shall
occasionally contract out certain ColdFusion programming tasks to improve
functionality and performance of the web site (hereinafter "Contracted
Programming"). When this is necessary, AGENCY shall provide, for CLIENT's
approval, notice of (i) the exact purpose of the programming; (ii) the
estimated cost of the programming; and (iii) the estimated completion date
of the programming.
1.7. WORK FOR HIRE. Notwithstanding anything in this Agreement to the
contrary, AGENCY acknowledges and agrees that all rights, including but not
limited to patent rights, trademarks, copyrights,and other such intellectual
properties as to any and all works, including but not limited to graphics,
artwork, protocols, systems designs, processes, and compilations,
produced and/or drafted by AGENCY shall be the exclusive property of CLIENT,
and shall constitute "work made for hire."
2. TERM AND TERMINATION.
2.1. This Agreement shall be effective as of April 1, 2000 and shall remain
in force for a term of three (3) months after said date and thereafter shall
be automatically extended for an additional six (6) month term (each, a
"Term"), with each Term to automatically renew unless either Party provides
written notice of non-renewal at least thirty days (30 days) prior to the
expiration of the initial Term or any six (6) month extension thereof. In no
event shall the term of this Agreement exceed five (5) years. At or before
the conclusion of each Term, the Parties agree to meet and confer regarding
any necessary revisions or amendments to the terms of this Agreement and the
Parties agree to use good faith efforts to negotiate the same. Any changes
to the terms of this Agreement shall be mutually agreeable and detailed in a
separate writing executed by both Parties.
2.2. Either Party may terminate this Agreement upon thirty (30) days'
notice to the other Party.
2.3. In the event of termination for any reason, all outstanding monies owed
to AGENCY by CLIENT shall be paid within fifteen (15) days of such
termination.
3. PAYMENT FOR SERVICES / ALLOCATION OF SERVICES. CLIENT agrees to pay
to AGENCY the sum of $6,000.00 per month, payable in advance on or before the
first of each month. In exchange for this payment, AGENCY agrees to provide
one hundred (100) hours of services per month. Services shall be allocated
by AGENCY as follows:
Project Management- 5 to 8 hours per week
Market/Competitive Analysis- 2 to 4 hours per week
Web Site Hosting Management- 1 to 4 hours per week
Web Site Testing- 4 to 7 hours per week
Web Site Updates/Expansion- 5 to 15 hours per week
Advertising/Promotions- 5 to 10 hours per week
In-House Programming- 2 to 7 hours per week
Contract Programming Management- 2 to 5 hours per week
If additional services (in excess of 100 hours) are requested by CLIENT
in any given month, CLIENT may purchase an additional twenty-five (25) hours
of services for $2,000.00, payable in advance of such additional services
being rendered. In addition to the above services, AGENCY shall provide 24-
hour pager access to an AGENCY principal, retainer-level access and quality
for all additional projects, and access to the diverse expertise of the
entire AGENCY staff. AGENCY shall monitor the hours it expends each week in
the above service areas. When half of CLIENT's monthly allotment of 100
hours has been expended by AGENCY, AGENCY shall inform CLIENT so that CLIENT
may instruct AGENCY if it wishes that the remaining hours be allocated in a
different manner. Payment for web site hosting and Contracted Programming
shall be the sole responsibility of CLIENT. All such payments shall be paid
directly by CLIENT to the appropriate vendors. AGENCY shall not be
responsible for any such payment.
In addition to the above payment terms, CLIENT shall offer to AGENCY
stock options as incentives for meeting performance standards in the
following separate and exclusive areas:
(i) increasing the number of visitors to the web site; and, (ii) meeting
those productivity goals identified in Exhibit "A," attached hereto and
incorporated herein by reference. The amount of stock options and specific
incentive goals shall be agreed to by the parties in a separate writing
executed by both CLIENT and AGENCY within thirty (30) days of the date of
this Agreement.
4. BRAND IDENTITY. CLIENT agrees with AGENCY that protecting the brand
identity of the CLIENT is critical to CLIENT's and AGENCY's success.
Therefore, in order to protect the integrity, consistency and image of the
Web4Boats brand, AGENCY will serve as a primary but not necessarily exclusive
marketing/communications agency for CLIENT, particularly with respect to
advertising, direct-mail, public relations, and trade show collateral.
5. REPRESENTATIONS AND WARRANTIES. CLIENT expressly agrees that
although AGENCY shall use its best efforts to remedy any problems which may
occur related to AGENCY's provision of the above-described services for
CLIENT, AGENCY makes no representation nor warranty that CLIENT's web site
shall be functional, on-line and available at all times or in any way with
respect to the duties, obligations and requirements of HOSTPRO. AGENCY does
not warrant that the services provided by the web hosting company will be
available on a specified date or time or that the network will have the
capacity to meet the demand of end users during specified hours. AGENCY's
services are made available without warranties of any kind, either express or
implied, all of which are expressly disclaimed including but not limited to
warranties of title, timeliness, merchantability or fitness for a particular
purpose. In no event will AGENCY, nor its owners, agents or employees or
anyone else involved in creating, producing or delivering the services to
CLIENT be liable for any damages, including but not limited to loss of data,
loss of revenue or profits, or for any other special, incidental, indirect or
consequential damages arising out of or in connection with the use or
inability to use CLIENT's web site or the services provided hereunder. CLIENT
also expressly agrees that downtime and lost transmissions may occur and
CLIENT indemnifies AGENCY and agrees to hold it harmless from any problems,
errors or damages arising from such downtimes or lost transactions. AGENCY
expressly disclaims all damages which may arise from programming failures,
cost overruns and time delays caused by Contracted Programming as outlined in
Section 1.6. CLIENT further acknowledges and agrees that not all graphics
and artwork produced for the web site are suitable for printing. High-
resolution formats of said artwork may have to be re-created at CLIENT's cost
prior to printing. Notwithstanding the foregoing, AGENCY shall be liable for
any and all damages stemming from AGENCY's gross negligence and/or its
willful failure to provide those services described in paragraph 3 above
where such failure is due to AGENCY's willful conduct or omission. Further,
CLIENT shall have no duty to indemnify AGENCY against any claims brought by
third parties for damages stemming from such gross negligence or willful
conduct or omission of AGENCY.
6. NOTICES. All notices required under this Agreement will be in writing
and sent by prepaid mail, overnight courier service, or facsimile to the
addresses or facsimile numbers below, and will be effective upon actual
receipt or three days after it is mailed. Each Party will advise the
other when addresses and/or telephone or facsimile numbers change.
TO CLIENT: WEB4BOATS.COM
Attn: Mr. Jim Merriam
6150 LaJolla Mesa Drive
LaJolla, CA 92037
Fax:
TO AGENCY: 540 Degrees, Inc. dba Gateway Arts
Attn: Mr. Kevin Plambeck
2363 Teller Road, Suite 121
Thousand Oaks, CA 91320
Fax: (805) 480-1150
7. GOVERNING LAW. CLIENT agrees this agreement is to be construed under and
governed by the laws of the State of California and will be binding upon all
heirs, distributes, personal representatives, successors and assigns. The
parties hereby agree to be bound by the exclusive jurisdiction of the courts
of the State of California.
8. CONFIDENTIALITY. AGENCY and CLIENT each agree that they will not use in
any way, for their own account nor for the account of any third party, nor
will they disclose to any third party, any confidential information revealed
to them by any party hereto. Confidential information shall be identified in
writing as being confidential prior to or at the time of disclosure,
including but not limited to, marketing data, business plans, formulas,
methodologies, algorithms, patterns, devices, secret inventions, processes,
compilations of information, records, and specifications, all of which are
owned by CLIENT and regularly used by CLIENT in the operation of its
businesss. AGENCY and CLIENT will take such reasonable precautions to
protect the confidentiality of such information as are employed to protect
their own confidential information of a similar nature. To the extent the
confidential information constitutes a trade secret as defined by applicable
law, this provision will survive the termination of this Agreement
and be effective as long as the information retains trade secret status. To
the extent the confidential information does not qualify as a trade secret,
this provision shall terminate two (2) years after the termination of this
Agreement. AGENCY and CLIENT agree that all confidential information,
including trade secrets, will be designated as such in writing. AGENCY
acknowledges and agrees that the sale or disclosure of any of CLIENT's trade
secrets or confidential data, as described herein and obtained by AGENCY
during the term of this Agreement constitutes unfair competition. AGENCY
promises and agrees not to engage in any unfair competition with CLIENT
during the term of this Agreement or at any time thereafter.
AGENCY further acknowledges that were AGENCY to breach the provisions of this
Agreement with respect to trade secrets, the harm to CLIENT would be
irreparable. AGENCY therefore agrees that in the event of such a breach or
threat of such a breach, CLIENT shall have, in addition to any other remedies
available to it, the right to obtain equitable remedy, including preliminary
injunctive relief or permanent injunction in order to prevent or restrain any
such breach by AGENCY against any such breach or threat of such breach.
9. RELATIONSHIP OF THE PARTIES. AGENCY and CLIENT are independent
contractors, and this Agreement does not create a partnership, joint venture,
employee/employer or agency relationship between them.
10. ASSIGNMENT. This Agreement will be binding on and inure to the benefit
of each of the parties, their successors and assigns. This Agreement may not
be assigned or transferred, in whole or in part, without the written consent
of the other Party. Any such assignment or transfer without written consent
will be void.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties regarding the subject matter hereof and supersede all
previous oral or written understandings between them on the subject matter
hereof. This Agreement may be modified or any provision waived only in
writing signed by authorized representatives of the Parties.
12. DISPUTE RESOLUTION. AGENCY and CLIENT agree to use their best efforts
to resolve and settle by direct, private negotiations any claim, controversy
or dispute (a "Dispute") that arises under or in relation to this Agreement
or that concerns a relationship created by this Agreement. Either Party may
seek the advice and assistance of legal counsel in connection with any such
negotiations. CLIENT and AGENCY agree to settle by arbitration any
disagreement or controversy arising between CLIENT and AGENCY relating to
this Agreement. Such arbitration shall be conducted according to standard
arbitration rules then in effect of the American Arbitration Association of
Los Angeles County, California. Initiation of arbitration may be made by
serving written notice to the other party. This arbitration agreement is
binding upon all parties. Any award the arbitrator makes will be final and
binding on all parties and judgment on it may be entered in any court having
jurisdiction. Notwithstanding the foregoing, nothing contained herein shall
be construed to limit or prevent AGENCY or CLIENT from applying to and
obtaining from any court having jurisdiction a writ of attachment, a
temporary injunction, a preliminary injunction or any other injunctive or
emergency relief available to safeguard and protect its interests prior to
the filing of or during or following any settlement negotiations, arbitration
or other proceeding or pending the handing down of a decision or award in
connection with any arbitration or other proceeding.
13. INSOLVENCY. Either Party may terminate this Agreement by notice in
writing, effective upon mailing, in the event the other Party is insolvent,
makes an assignment for the benefit of creditors, is unable to pay debts as
they mature, files or has filed against it a petition in any court
setting forth or alleging any of the foregoing, or has a trustee, receiver or
officer of the court appointed to control or supervise all or any substantial
part of its assets or business.
14. NO WAIVER. A Party's failure at any time to enforce any of the
provisions of the Agreement or any right with respect thereto will not be
construed to be a waiver of such provision or rights, and no waiver or
failure to enforce in one instance shall be construed as a waiver in
subsequent instances, nor affect the validity of this Agreement. The
exercise by a Party of any rights provided by this Agreement shall not
preclude or prejudice the exercise thereafter of the same or other rights
under this or any other Agreement.
15. SEVERABILITY. If any provision of this Agreement or the application of
any provision hereof is held invalid, the remainder of this Agreement shall
not be affected unless the provision held invalid shall substantially impair
the benefits of the remaining portions of this Agreement.
16. AUTHORITY. Each Party represents and warrants to the other Party that
it has the power and authority to enter into this Agreement. Each Party
further represents and warrants to the other Party that the terms of this
Agreement do not conflict with the terms of any other agreement to which such
Party is a party to or to which it is bound, and that entering into this
Agreement shall not cause a default under any other such agreement with any
other party.
17. NO PUBLIC DISCLOSURE. Neither Party shall make any public disclosure,
press release or other public announcement regarding this Agreement or the
transactions contemplated herein without the express written consent of the
other Party, which consent may not be unreasonably withheld.
18. ATTORNEYS' FEES. In the event that any legal action, including
arbitration, is required to enforce either Party's rights hereunder, the
prevailing Party shall be entitled to recover its related costs and fees,
including any administrative and/or consequential costs as well as
reasonable attorneys' fees incurred, including the portion of salary costs
and expenses of such Party's "in-house" counsel attributable thereto.
19. SIGNATURES. This Agreement may be executed in counterparts and shall be
effective once the counterparts are signed by both Parties. Facsimiles of
original signatures may be accepted in lieu of originals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed and delivered as of the date first written above.
AGENCY CLIENT
540 DEGREES, INC. WEB4BOATS.COM
By By
Name Name
Title Title
