*** Certain provisions of this exhibit have been filed separately with the
Commission pursuant to an application for confidential treatment.
EXHIBIT 10.1
01/06/99
AGREEMENT
---------
This AGREEMENT, including all exhibits and schedules hereto (the
"Agreement") is made and entered into as of the 7th day of January, 1999 (the
"Effective Date"), by and between DIGEX, Incorporated, a Delaware corporation,
with offices at 6435 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Road, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("DIGEX") and Pandesic, LLC, a Delaware limited liability company, with
offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Pandesic").
WITNESSETH
WHEREAS, Pandesic is engaged in the business of developing and
providing Internet electronic business solution software for Pandesic's clients
that is used in establishing world wide web sites on the Internet accessible to
third parties ("Web Sites") and permits customers of such clients to place
orders and transact business electronically by accessing and interacting with a
client's Web Site ("Pandesic Software"); and
WHEREAS, Pandesic desires to market and enter into agreements to
license the Pandesic Software and to provide Web Site hosting and server
services to Pandesic's clients (each a "Merchant Agreement"); and
WHEREAS, DIGEX is an Internet service provider and is engaged in the
business of providing Web Site hosting and server services; and
WHEREAS, Pandesic desires to enter into an agreement with DIGEX, and
DIGEX desires to enter into an agreement with Pandesic, whereby DIGEX will
provide Web Site hosting and server services described herein with respect to
the Web Sites to be established
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under Merchant Agreements entered into between Pandesic and clients of Pandesic
(each a "Merchant").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereby agree as follows:
1. Services
1.1 Managed Services
DIGEX agrees to provide to Pandesic, with respect to each Merchant for
which Pandesic requests Managed Services from DIGEX, the Web Site hosting and
server services set forth on Exhibit A attached hereto ("Pandesic Managed
Service Definition Document"), subject to the terms and conditions set forth
herein. DIGEX shall be under no obligation to provide Managed Services with
respect to any such Web Site on terms and conditions other than as set forth
herein.
1.2 Additional Services
If any Merchant desires to receive services other than the Managed
Services ("Additional Services"), Pandesic shall inform such Merchant of the
Additional Services that DIGEX can provide. Neither Pandesic nor any Merchant
shall be obligated to obtain such Additional Services from DIGEX. To the extent
that Pandesic or any Merchant desires to receive Additional Services from DIGEX,
and DIGEX is willing to provide such Additional Services to Pandesic or any
Merchant, such Additional Services, and the terms and conditions upon which they
shall be provided, shall be set forth in a separate agreement that shall be duly
executed by DIGEX and by Pandesic or such Merchant, as the case may be. DIGEX
shall be
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under no obligation to provide Additional Services, unless it has entered into a
separate agreement with Pandesic or a Merchant, as the case may be, with respect
thereto.
1.3 Co-Location Servers
DIGEX currently provides to Pandesic certain services for the
management of Web Sites residing on servers not owned by DIGEX, but which are
located in a DIGEX facility and included in the DIGEX web farm ("Co-Location
Servers") pursuant to agreements between DIGEX and Pandesic executed prior to
the Effective Date of this Agreement. It is the intent of the parties that the
Web Sites currently residing on the Co-Location Servers will be migrated to
servers owned by DIGEX by January 1, 1999. If, and when, such migration takes
place, then DIGEX shall thereafter provide the Managed Services with respect to
such Web Sites, subject to the terms and conditions of this Agreement. The terms
and conditions for the migration of such Web Sites currently residing on the Co-
Location Servers to a server owned by DIGEX shall be the subject of a separate
agreement to be negotiated and entered into by DIGEX and Pandesic. Neither the
failure to effect the aforesaid migration of the Web Sites by January 1, 1999,
nor the failure of the parties hereto to agree on the terms and conditions for
such migration, shall be deemed a breach of this Agreement or otherwise affect
the validity of this Agreement.
1.4 Development of Installation Process
DIGEX, at DIGEX's expense, shall engineer and develop the installation
process for the Pandesic Software (through version 3.0 of the Pandesic Software)
to enable DIGEX to commence providing Managed Services to Pandesic (the
"Installation Process"). All script, information, reports, studies, source
codes, flow charts, diagrams and other tangible or intangible material or other
property (collectively, "Development Property") of any nature whatsoever
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produced by or as a result of the engineering and development of the
Installation Process shall be the sole and exclusive property of DIGEX. Pandesic
shall provide DIGEX with such assistance DIGEX reasonably requires to engineer
and develop the Installation Process. All script, information, reports, studies,
object or source codes, flow charts, diagrams and other tangible or intangible
material or other property of any nature whatsoever provided by Pandesic to
DIGEX for the engineering and development of the Installation Process and
Development Property (collectively, "Pandesic Installation Materials") remains
the sole and exclusive property of Pandesic and/or its licensors. DIGEX shall
provide Pandesic with the Installation Process or a similar installation script
to allow Pandesic to build development, test, training and demonstration systems
and to test the compatibility of such Installation Process or similar
installation script with the Pandesic Software solely for use at Pandesic's
facilities. The Installation Process, except for any Pandesic Installation
Materials, shall remain the sole and exclusive property of DIGEX after
termination or expiration of this Agreement. The Installation Process,
Development Property, and Pandesic Installation Materials shall be subject to
the confidentiality provisions of Section 10 ("Confidentiality") of this
Agreement. Because the Pandesic Installation Materials contain confidential
information of Pandesic and/or its licensors, DIGEX shall use any Pandesic
Installation Materials only for the purposes specifically contemplated in this
Agreement.
1.5 Support Services
Pandesic shall provide to the Merchants first tier support services
and follow the escalation procedures set forth in Exhibit A ("Pandesic Managed
---------
Service Definition Document") attached hereto. DIGEX shall provide Pandesic
second tier support services and follow the escalation procedures set forth in
Exhibit A ("Pandesic Managed Service Definition Document")
---------
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attached hereto.
2. Fees, Taxes, Pricing and Expenses
2.1 Managed Services Fees
Pandesic shall pay DIGEX all fees for the Managed Services in
accordance with the applicable fee schedule set forth in Exhibit C ("Fees for
Managed Services") attached hereto.
2.2 Payment
DIGEX shall invoice Pandesic for Managed Services Fees and fees for
any additional services ("Additional Services Fees") due on a monthly basis. If
Pandesic fails to pay any Managed Services Fees or Additional Services Fees, or
fails to pay fees relating to any products or services rendered, within forty-
five (45) calendar days from the date of the applicable invoice therefor, late
charges at a rate of the lesser of one and one half percent (1.5%) of the
invoiced amount per month or the maximum allowable under applicable law on all
unpaid amounts shall also become payable by Pandesic to DIGEX. If a dispute
arises as to any portion of an invoice, Pandesic shall pay the undisputed amount
of the invoice when due and shall notify DIGEX in writing of the disputed amount
and the reason(s) therefor with reasonable specificity and pay such disputed
amount into escrow no later than forty-five (45) calendar days from the date of
invoice.
2.3 Dispute Escalation
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Prior to initiation of any termination, arbitration or litigation
related to this Agreement, except with respect to any termination, arbitration
or litigation resulting from Pandesic's failure to comply with its obligations
in Section 2.2 ("Payment"), the Authorized Representatives (as defined in
Section 19 ("Authorized Representative")) of DIGEX and Pandesic will first
attempt in good faith to promptly resolve any dispute arising out of or related
to this Agreement. If the matter has not been resolved by the DIGEX Authorized
Representative and the Pandesic Authorized Representative within three (3)
business days after either party's receipt of a payment dispute notice or other
dispute notice, or if either party will not agree to meet with the other party
within such three-day period, the matter will be referred to the President of
DIGEX, Web Site Management Group, and the President of Pandesic, who will
attempt in good faith to promptly resolve the dispute. (1) If the Presidents
have actually met and conferred in good faith and are unable to resolve the
dispute within an additional five (5) business day period, then either party
shall be entitled, or (2) if DIGEX's President will not agree to meet with
Pandesic's President within such five-day period, then Pandesic shall be
entitled, or (3) if Pandesic's President will not agree to meet with DIGEX's
President within such five-day period, then DIGEX shall be entitled, to initiate
termination, arbitration or litigation pursuant to the terms of this Agreement.
2.4 Taxes; Regulatory and Other Fees
Pandesic shall be liable for, and shall reimburse DIGEX for, all
sales, use, transfer, privilege, excise, all other taxes and all duties and
regulatory fees related to this Agreement or the provision of the Managed
Services, whether international, national, state or local, however designated
(including any interest and penalties imposed thereon), other than (i) taxes
based on the net income of DIGEX, (ii) personal property or use taxes related to
DIGEX's
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hardware or software and (iii) other taxes, assessments and real property
related levies on DIGEX owned or leased real property.
2.5 Pricing Reviews.
(a) The parties shall meet approximately every *** to review pricing
information for the Managed Services, including, but not limited to, actual and
anticipated costs, expenses, charges and cost models and methodologies, with the
parties sharing any savings or increases on a forward-looking basis and
adjusting the Managed Services Fees accordingly if mutually agreed upon by the
parties. At least ten (10) business days prior to any such meeting between the
parties, DIGEX shall provide to Pandesic all relevant pricing information
concerning the provision of the Managed Services for Pandesic's sole use in
preparing for the pricing review meeting. All such information shall be treated
as Confidential Information pursuant to Section 10 ("Confidentiality") of the
Agreement. If, at any time, support and labor costs substantially increase for
DIGEX in the provision of Managed Services to Pandesic or Pandesic's Merchants,
then DIGEX and Pandesic, shall meet to review such cost increases and, if
mutually agreed upon, to an adjustment in the then-current pricing.
(b) At any time during the Initial Term or any Renewal Term, the
parties may agree upon changes to the standard server configuration. If such
changes result in increases and/or savings to direct costs, excluding labor,
DIGEX shall pass through to Pandesic such increases or savings on a forward-
looking basis.
3. Minimum Commitment.
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Pandesic acknowledges and agrees that a substantial initial capital investment
is required to be made by DIGEX with respect to each new server purchased by
DIGEX to meet Pandesic's Managed Services requirements and, accordingly,
Pandesic shall be obligated to pay the Managed Services Fees to DIGEX for a
period of *** from the date that DIGEX commences providing Managed Services with
respect to each Required Server (as defined below), and DIGEX shall be obligated
to provide Managed Services for a period of *** with respect to each Required
Server. Such obligations of Pandesic and DIGEX are subject to Section 18.2(e)
("Effect of Termination: Minimum Commitment") and shall continue notwithstanding
the termination and/or expiration of this Agreement except and unless this
Agreement is terminated by Pandesic pursuant to Section 18.2(b) ("Termination by
Pandesic"). For the purposes of this Agreement, "Required Server" means a server
that DIGEX purchased in order to provide Managed Services to Pandesic at the
time of purchase. DIGEX shall not purchase an additional server to provide
Managed Services for a new Merchant if DIGEX can utilize a server, originally
purchased to provide Managed Services for a Merchant that did not complete the
original term of its Merchant Agreement, to provide Managed Services for such
new Merchant.
4. ***; Services from Other Provider.
***
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***
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***
5. Acceptable Use Policy.
Pandesic shall comply, and shall cause each Merchant for which Managed
Services are provided to comply, with the Acceptable Use Policy attached hereto
as Exhibit D ("Acceptable Use Policy"), as the Acceptable Use Policy may be
modified from time to time by
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DIGEX pursuant to the terms of this Section 5. If DIGEX notifies Pandesic of an
Acceptable Use violation by a Merchant, and Pandesic confirms such violation,
Pandesic shall notify such Merchant and if such Merchant fails to cure such
violation within five (5) business days of receipt of notice of such violation,
Pandesic shall terminate such Merchant's Merchant Agreement. If DIGEX notifies
Pandesic of an Acceptable Use violation by a Merchant, DIGEX immediately may
suspend such Merchant's Web Site if the Merchant's violation of the Acceptable
Use Policy jeopardizes the security, privacy or operation of DIGEX's services.
If Pandesic fails to terminate any Merchant that continues to violate the
Acceptable Use Policy DIGEX shall have the right to terminate this Agreement
pursuant to the terms of Section 18.2(a) ("Termination by DIGEX"). DIGEX shall
provide notice to Pandesic of any proposed changes to the Acceptable Use Policy,
together with a copy thereof, not less than thirty (30) calendar days prior to
the date upon which it is to become effective ("Change Notice"). Pandesic shall
have ten (10) calendar days after its receipt of such Change Notice to provide
notice to DIGEX indicating any objection to such change in the Acceptable Use
Policy as reflected in the Change Notice ("Objection Notice"). In the event
Pandesic fails to deliver an Objection Notice within the prescribed time period,
Pandesic shall be deemed to have consented to the changes to the Acceptable Use
Policy, which changes shall thereafter take effect on the effective date
specified in the Change Notice. In the event Pandesic delivers an Objection
Notice within the prescribed time period, DIGEX shall have ten (10) calendar
days after its receipt of such Objection Notice to provide notice to Pandesic
("Response Notice") stating either (i) that DIGEX is terminating the proposed
change to the Acceptable Use Policy, in which case the existing Acceptable Use
Policy shall remain in full force and effect, or (ii) that DIGEX is proceeding
with the changes to the Acceptable Use Policy as specified in the Change Notice.
Notwithstanding anything contained herein to the contrary, DIGEX may only make
modifications to the Acceptable Use
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Policy that DIGEX reasonably believes are necessary to (i) address activities
that are detrimental to DIGEX's ability to deliver its services, (ii) address
changes in any law or regulation or (iii) protect the integrity and security of
DIGEX's Managed Services and/or network.
6. Maintenance; Availability
DIGEX shall perform all maintenance and service in connection with
this Agreement in accordance with Exhibit E ("Service Level Agreement").
7. Grant of License by Pandesic
Pandesic hereby grants to DIGEX a non-exclusive, non-transferable,
royalty-free license for the Initial Term and any Renewal Term (as these terms
are defined below) to adapt, reproduce, perform and display the Pandesic
Software and all items of intellectual property related to the Pandesic Software
solely for use by DIGEX in the provision of Managed Services hereunder. Pandesic
shall require all Merchants obtaining Managed Services from DIGEX to grant to
Pandesic's independent contractors (including DIGEX) a non-exclusive, non
transferable, royalty-free license to adapt, reproduce, perform and display all
materials provided to Pandesic for incorporation into a Merchant Web Site with
respect to which DIGEX is to provide Managed Services hereunder, including any
images, photographs, illustrations, graphics, audio clips, video clips or text
(collectively, the "Merchant Content"), for use by DIGEX solely in providing the
Managed Services hereunder.
8. Grant of License by DIGEX
DIGEX hereby grants to Pandesic a non-exclusive, non-transferable,
royalty-free license for the Initial Term and any Renewal Term to adapt,
reproduce, perform and display the
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Installation Process engineered and developed by DIGEX pursuant to Section 1.4
("Development of Installation Process"). DIGEX hereby grants to Pandesic and
Merchants receiving Managed Services pursuant to this Agreement a non-exclusive,
royalty-free license for the Initial Term and any Renewal Term to adapt,
reproduce, perform and display any software necessary to the provision of the
Managed Services or required to access or use the Managed Services for the
sole purpose of receiving and using the Managed Services as contemplated in this
Agreement. As of the Effective Date, monitoring software used by DIGEX shall be
available to Pandesic, and PC Anywhere shall be available to Merchants. For any
Additional Services, DIGEX shall send notice of license use or restrictions to
Pandesic.
9. Proprietary Rights
9.1 Proprietary Rights of Pandesic
The Pandesic Software and Merchant Content shall remain the sole and
exclusive property of Pandesic and each Merchant, respectively, and nothing in
this Agreement shall be construed to grant DIGEX any ownership right in, or
license to the Pandesic Software and/or Merchant Content, except as provided in
Section 7 ("Grant of License by Pandesic") of this Agreement.
9.2 Proprietary Rights of DIGEX
All materials, including, but not limited to, any computer software
(in object code and source code form), script, programming code, data,
information or HTML script developed or provided by DIGEX or its suppliers at
DIGEX's expense, in connection with this Agreement, including any trade secrets,
know-how, methodologies and processes related to DIGEX's
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products or services, shall remain the sole and exclusive property of DIGEX or
its suppliers, including, without limitation, all copyrights, trademarks,
patents, trade secrets, and any other proprietary rights inherent therein and
appurtenant thereto (collectively "DIGEX Materials"). Notwithstanding the
foregoing, unless otherwise agreed to in a separate agreement, if Pandesic or a
Merchant pays for the development of materials by DIGEX in connection with this
Agreement, and such payment is separately documented with respect to such
development materials, then the party that paid for such development shall own
all rights thereto, and, at Pandesic's or an applicable Merchant's request,
DIGEX agrees to execute any necessary assignments to convey such rights.
9.3 Use of DIGEX Name
Pandesic shall be permitted to use the name of DIGEX in any
solicitation, advertising, publicity, proposals or similar materials in
electronic or print form displayed to prospective Merchants or otherwise
disseminated; provided, however, Pandesic shall have first provided a copy of
any such proposed solicitation, advertising, publicity, proposals or similar
materials to DIGEX not less than five (5) business days prior to such use and
DIGEX shall have consented to such use in writing, including by electronic mail,
which consent shall not be unreasonably withheld. The failure of DIGEX to
respond within such five (5) business day period after receipt of such materials
shall constitute DIGEX's consent to use the DIGEX name in such materials.
9.4 Use of Pandesic Name
DIGEX shall be permitted to use the name of Pandesic in any
solicitation, advertising, publicity, proposals or similar materials in
electronic or print form displayed to
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prospective Merchants or otherwise disseminated; provided, however, DIGEX shall
have first provided a copy of any such proposed solicitation, advertising,
publicity, proposals or similar materials to Pandesic not less than five (5)
business days prior to such use and Pandesic shall have consented to such use in
writing, including by electronic mail, which consent shall not be unreasonably
withheld. The failure of Pandesic to respond within such five (5) business day
period after receipt of such materials shall constitute Pandesic's consent to
use the Pandesic name in such materials.
10. Confidentiality
(a) Each party agrees that during the course of this Agreement,
information that is confidential or proprietary to such party or to its
suppliers or its respective Merchants or customers, may be disclosed to the
other party, including, but not limited to software, technical processes and
formulas, source codes, product designs, sales, cost and other financial
information, product and business plans, usage rates, projections, and marketing
data ("Confidential Information"). Confidential Information shall not include
information that the receiving party can demonstrate (i) is, as of the time of
its disclosure, or thereafter becomes part of the public domain through a source
other than the receiving party, (ii) was known to the receiving party as of the
time of its disclosure, (iii) is independently developed by the receiving party
without access to the Confidential Information of the disclosing party, or (iv)
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 (i) shall not make any disclosure of the Confidential Information to
anyone other than its employees, contractors and agents who have a need to know
in connection with the performance of such party's obligations under this
Agreement, (ii) shall take measures to protect the confidentiality of the other
party's Confidential
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Information that, in the aggregate, are no less protective than those
measures it uses to protect the confidentiality of its own Confidential
Information, (iii) advise those to whom disclosure of Confidential Information
is made of the confidential nature of the Confidential Information and of the
prohibitions contained herein; (iv) not duplicate such Confidential Information,
except as reasonably necessary to perform their duties under this Agreement; and
(v) not remove or destroy any proprietary or copyright notice appearing on the
Confidential Information. Each party shall notify its employees, contractors and
agents of their confidentiality obligations with respect to the Confidential
Information and shall require its employees, contractors and agents to comply
with these obligations.
(b) Notwithstanding the foregoing, a party may disclose the
Confidential Information in judicial or other government proceedings to the
extent that such party is legally compelled to disclose such Confidential
Information, provided that the party has notified the other party prior to such
disclosure and shall have used its best efforts to obtain, and shall have
afforded the other party an opportunity to obtain, an appropriate protective or
similar order or other assurances satisfactory to the other party providing for
the confidential treatment of the Confidential Information required to be so
disclosed.
(c) Pandesic and DIGEX each acknowledge that its failure to comply
with the provisions of this Section 10 will cause irreparable harm to the other
party which cannot be adequately compensated for in damages, and accordingly
acknowledges that the other party will be entitled, in addition to any other
remedies available to it, to interlocutory and permanent injunctive relief to
restrain any anticipated, present or continuing breach of this Section.
11. Merchant Web Site Content
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11.1 Accuracy and Review of Merchant Web Site Content
Pandesic will require that its Merchants assume sole responsibility
for: (a) acquiring any authorization(s) necessary for hypertext links to the Web
Site hosted by DIGEX; and (b) the accuracy of materials provided to DIGEX,
including, without limitation, Merchant Content, nature of business, and address
where business is conducted, and (c) ensuring that the Merchant Content does not
infringe or violate any right of any third party.
11.2 Limitations on Merchant Web Site Content
Pandesic shall require each Merchant to represent to Pandesic in its
Merchant Agreement that such Merchant's Merchant Content does not contain any
content or materials that infringe on the rights of any other party or violate
any applicable law or regulation or any proprietary, contract, moral, privacy or
other third party right, or which otherwise, would expose DIGEX to any civil or
criminal liability or otherwise adversely affect DIGEX's business.
12. Representations and Warranties
12.1 DIGEX representations and Warranties
Subject to the limitations set forth in Section ▇▇ ("▇▇ ▇▇▇▇▇▇▇▇ of
Merchantability or Fitness for Particular Purpose"), DIGEX represents and
warrants to Pandesic as follows:
(a) DIGEX is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the power and
authority to enter into and perform its obligations under this Agreement.
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(b) DIGEX is the rightful owner of all trademarks, patents and
licenses related to and regarding the Managed Services, that DIGEX has the right
to use the software relating to the Managed Services and the Managed Services do
not violate any and all patents, copyrights, trademarks, trade secrets or other
proprietary rights of any third party.
(c) DIGEX warrants that all of the Managed Services that have been
solely engineered by DIGEX are Millennium Compliant (as defined below). DIGEX
shall promptly notify Pandesic if any Millennium Compliance testing by DIGEX
reveals any potential problems in complying with this warranty. Should the
software fail to be Millennium Compliant, DIGEX shall cause the software to
become Millennium Compliant promptly at DIGEX's expense. For the purposes of
this Agreement, ***
12.2 Pandesic Representations and Warranties
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Pandesic represents and warrants to DIGEX as follows:
(a) Pandesic is a limited liability company, duly organized and
validly existing under the laws of the State of Delaware and has the power and
authority to enter into and perform its obligations under this Agreement;
(b) Pandesic Software does not and shall not contain any content,
materials or services that are inaccurate or that infringe on or violate any
applicable law, regulation or right of a third party, including, without
limitation, export laws, or any intellectual property right or other proprietary
right, contract, moral, or privacy right or any other third party right, and
that Pandesic owns the Pandesic Software or otherwise has the right to place the
Pandesic Software on the Web Sites, and
(c) Pandesic is the rightful owner or licensee of all trademarks,
patents and licenses related to the Pandesic Software, that Pandesic has the
right to license the Pandesic Software to DIGEX to use in accordance with the
terms of this Agreement, and that the Pandesic Software does not violate any and
all patents, copyrights, trademarks, trade secrets or other proprietary rights
of any third party.
(d) Pandesic warrants that all of the Pandesic Software that has been
solely engineered and developed by Pandesic is Millennium Compliant (as defined
in Section 12. 1 (c)). Pandesic shall promptly notify DIGEX if any Millennium
Compliance testing by Pandesic reveals any potential problems in complying with
this warranty. Should the software fail to be Millennium Compliant, Pandesic
shall cause the software to become Millennium Compliant promptly at Pandesic's
expense.
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***
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***
13. No Warranty of Merchantability or Fitness for Particular Purpose
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NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED
OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE HAVE BEEN MADE BY DIGEX WITH RESPECT TO THE
MANAGED SERVICES OR ANY ADDITIONAL SERVICES PROVIDED HEREUNDER OR OTHERWISE,
UNLESS EXPRESSLY INCLUDED IN THIS AGREEMENT.
14. Indemnification by Pandesic
(a) General. Pandesic shall indemnify and hold harmless DIGEX and
-------
DIGEX's officers, directors, employees, shareholders and agents (each, a "DIGEX
Indemnified Person") against any losses, lawsuits, claims, damages liabilities,
penalties, actions, proceedings or judgments (each a "Loss," and, collectively
"Losses") brought by a third party to which a DIGEX Indemnified Person may
become subject, (i) based on DIGEX's use of the Pandesic Software in accordance
with the terms of this Agreement and (ii) based on Pandesic's breach of its
obligations in Section 12.2(e) ("Pandesic Representations and Warranties")
and/or in Section 11 ("Merchant Web Site Content"). With respect solely to (i)
above, this indemnification shall not apply to matters based on the Managed
Services or Additional Services or to matters directly caused by a DIGEX
Indemnified Person's negligence or willful misconduct. If the Pandesic Software,
or any part thereof, results in an infringement or a misappropriation, then
Pandesic will, at no charge to DIGEX, use commercially reasonable efforts to
either: (i) procure for DIGEX the right to continue using such Pandesic Software
or part thereof; (ii) replace the Pandesic Software with non-infringing, but
substantially equivalent software; or (iii) modify the same so as to make it
non-infringing, but substantially equivalent.
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(b) Notice. Upon obtaining knowledge thereof, a DIGEX Indemnified
------
Person shall promptly give Pandesic written notice of any Loss that the DIGEX
Indemnified Person has determined has given or could give rise to a claim for
indemnification hereunder (a "Notice of Claim"). A Notice of Claim shall specify
in reasonable detail the nature and all known particulars related to the Loss
for which indemnification is sought under this Section 14, but failure to give a
Notice of Claim shall not release Pandesic from indemnifying the DIGEX
Indemnified Person, unless Pandesic is actually prejudiced thereby.
(c) Procedure for Third Party Claims. Pandesic will assume the
--------------------------------
defense of any Loss covered by Section 14(a) ("Indemnification by Pandesic:
General") that is a claim by a third party against DIGEX. The DIGEX Indemnified
Person shall have the right, but not the obligation, to participate, at its own
cost and expense, in the defense or other opposition of any Loss through legal
counsel selected by it and shall have the right, but not the obligation, to
assert any and all cross-claims or counterclaims which it may have. The DIGEX
Indemnified Person shall, at Pandesic's expense, (i) at all times cooperate in
all reasonable ways with, make its relevant files and records available for
inspection and copying by, make its employees reasonably available to and
otherwise render reasonable assistance to Pandesic upon request, and (ii) not
compromise or settle such Loss without the prior written consent of Pandesic. If
Pandesic proposes to settle or compromise any Loss, Pandesic shall give written
notice to that effect (together with a statement in reasonable detail of the
terms and conditions of such settlement or compromise) to the DIGEX Indemnified
Person within a reasonable time prior to effecting such settlement or
compromise. Notwithstanding anything contained herein to the contrary, the DIGEX
Indemnified Person shall have the right to object to the settlement or
compromise of any such Loss whereupon (i) the DIGEX Indemnified Person will
assume the defense or other opposition of any such Loss and
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(ii) Pandesic shall be released from any and all liability with respect to any
such Loss to the extent that such liability exceeds the liability which Pandesic
would have had in respect of such a settlement or compromise.
15. Indemnification by DIGEX
(a) General. DIGEX shall indemnify and hold harmless Pandesic and
-------
Pandesic's officers, directors, employees, shareholders and agents (each, a
"Pandesic Indemnified Person") against any Losses brought by a third party to
which a Pandesic Indemnified Person may become subject, based on Pandesic's use
of the Managed Services, as set forth in the standard support tasks in Exhibit
A, in accordance with the terms of this Agreement. This indemnification shall
not apply to matters based on the Pandesic Software or Merchant Content or to
matters directly caused by a Pandesic Indemnified Person's negligence or willful
misconduct. If the Managed Services or Additional Services, or any part thereof,
results in an infringement or a misappropriation, then DIGEX will, at no
additional charge to Pandesic, use commercially reasonable efforts to either:
(i) procure for Pandesic the right to continue using such Managed Services,
Additional Services or part thereof; (ii) replace the Managed Services or
Additional Services with non-infringing, but substantially equivalent services;
or (iii) modify the same so as to make it non-infringing, but substantially
equivalent.
(b) Notice. Upon obtaining knowledge thereof, a Pandesic Indemnified
------
Person shall promptly give DIGEX a Notice of Claim. A Notice of Claim shall
specify in reasonable detail the nature and all known particulars related to the
Loss for which indemnification is sought under this Section 15, but failure to
give a Notice of Claim shall not release DIGEX from indemnifying the Pandesic
Indemnified Person, unless DIGEX is actually prejudiced thereby.
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(c) Procedure for Third Party Claims. DIGEX will assume the defense
--------------------------------
of any Loss covered by Section 15(a) ("Indemnification by DIGEX: General") that
is a claim by a third party against Pandesic. The Pandesic Indemnified Person
shall have the right, but not the obligation, to participate, at its own cost
and expense, in the defense or other opposition of any Loss through legal
counsel selected by it and shall have the right, but not the obligation, to
assert any and all cross-claims or counterclaims which it may have. The Pandesic
Indemnified Person shall, at DIGEX's expense, (i) at all times cooperate in all
reasonable ways with, make its relevant files and records available for
inspection and copying by, make its employees reasonably available to and
otherwise render reasonable assistance to DIGEX upon request, and (ii) not
compromise or settle such Loss without the prior written consent of DIGEX. If
DIGEX proposes to settle or compromise any Loss, DIGEX shall give written notice
to that effect (together with a statement in reasonable detail of the terms and
conditions of such settlement or compromise) to the Pandesic Indemnified Person
within a reasonable time prior to effecting such settlement or compromise.
Notwithstanding anything contained herein to the contrary, the Pandesic
Indemnified Person shall have the right to object to the settlement or
compromise of any such Loss whereupon (i) the Pandesic Indemnified Person will
assume the defense or other opposition of any such Loss and (ii) DIGEX shall be
released from any and all liability with respect to any such Loss to the extent
that such liability exceeds the liability which DIGEX would have had in respect
of such a settlement or compromise.
16. Limitation of Liability
***
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*** NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOSS OF PROFITS OR LOSS
OF REVENUE, OR FAILURE TO REALIZE EXPECTED SAVINGS RESULTING FROM THE USE OF THE
PANDESIC SOFTWARE, DIGEX'S MANAGED SERVICES AND/OR THE ADDITIONAL SERVICES AND
THE HARDWARE AND SOFTWARE USED IN CONNECTION THEREWITH BY PANDESIC OR ANY THIRD
PARTIES EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF.
17. Dispute Resolution.
(a) Subject to Subsection 17(b), all disputes, differences,
controversies or claims arising out of or relating to this Agreement, including,
but not limited to, any question regarding its existence, validity, or
termination, shall be finally and solely determined and settled by
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arbitration in New York, New York in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, which rules are deemed to be
incorporated by reference into this Subsection. The arbitration shall be
conducted by a sole arbitrator. The language of all arbitration proceedings
shall be English. The arbitral tribunal shall have the authority to award, in
addition to monetary damages, injunctive relief, specific performance and/or, as
the case may be, other interim measures, without the posting of any bond, to
prevent or stop harm to either party, including, but not limited to, harm
relating to any rights of either party with respect to trademarks, copyrights,
patent rights, know-how, trade secrets or other intellectual property
(collectively, the "Intellectual Property Rights"). The arbitral award shall
state the reasons upon which the award is based. Judgment upon any arbitral
award may be entered and enforced in any court of competent jurisdiction.
(b) Each party acknowledges that a breach of this Agreement,
including, but not limited to Section 10 ("Confidentiality"), would result in
irreparable harm and, accordingly, the parties agree that a party shall be
entitled in the event of a breach of this Agreement by the other party, and
notwithstanding the provisions of Section 17(a), to apply to a court of
appropriate jurisdiction for injunctive relief, specific performance and/or, as
the case may be, other interim measures, without the posting of any bond, to
prevent or stop harm, including, but not limited to, harm relating to,
Intellectual Property Rights. Pandesic hereby irrevocably submits to the
jurisdiction of the courts of the State of Maryland and irrevocably appoints the
Secretary of State of Maryland as its agent for the service of process in the
event of litigation by DIGEX under this Section 17(b) provided that Pandesic
also receives actual notice of any proceeding under this Section 17(b). Pandesic
hereby waives, and agrees not to raise in connection with the aforesaid
submission to jurisdiction, any defenses based on venue, personal jurisdiction,
sufficiency of
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service of process or similar matters. Pandesic shall not file any cause of
action or other claim in such litigation. DIGEX hereby irrevocably submits to
the jurisdiction of the courts of the State of California and irrevocably
appoints the Secretary of State of California as its agent for the service of
process in the event of litigation by Pandesic under this Section 17(b) provided
that DIGEX also receives actual notice of any proceedings under this Section
17(b). DIGEX hereby waives, and agrees not to raise in connection with the
aforesaid submission to jurisdiction, any defenses based on venue, personal
jurisdiction, sufficiency of service of process or similar matters. DIGEX shall
not file any cause of action or other claim in such litigation.
18. Term; Continuation of Managed Services; Termination
18.1 Term; Continuation of Managed Services
(a) This Agreement shall be effective from the Effective Date and
thereafter remain in effect for an initial period of *** unless earlier
terminated in accordance with the terms of this Agreement (the "Initial Term")
and, unless terminated in accordance with the terms of this Agreement, shall
automatically renew beyond the Initial Term for additional periods of *** unless
earlier terminated during such additional period in accordance with the terms of
this Agreement (each, a "Renewal Term").
(b) This Agreement may be terminated by Pandesic or DIGEX on the last
day of the Initial Term or on the last day of any Renewal Term by providing
written notice to the other party not less than one hundred eighty (180) days
prior to the expiration of the Initial Term or the then current Renewal Term, as
the case may be, indicating an intention to terminate the Agreement as of the
last day of the Initial Term or the then current Renewal Term ("Termination
Date").
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18.2 Termination
(a) Termination by DIGEX. In addition to any other rights DIGEX may
--------------------
have under this Agreement or applicable law, DIGEX may, at DIGEX's option: (i)
terminate this Agreement, upon Pandesic's failure to cure within ten (10)
business days written notice of Pandesic's failure to pay any undisputed amounts
due hereunder as and when the same shall be due and payable or Pandesic's
failure to deposit disputed amounts into escrow in accordance with Section 2.2
("Payment"); (ii) terminate this Agreement by providing thirty (30) calendar
days written notice of Pandesic's failure to terminate a Merchant who is in
violation of the Acceptable Use Policy upon Pandesic's failure to cure such
violation within five (5) business days of receipt of notice from DIGEX; (iii)
terminate this Agreement by providing thirty (30) calendar days written notice
upon Pandesic's breach of the representations stated in Sections 12.2(b) and (c)
("Pandesic Representations and Warranties"), provided that an injunction has
been issued against Pandesic because of such breach; (iv) terminate this
Agreement, upon Pandesic's failure to cure within ten (10) business days written
notice, Pandesic's failure to satisfy its indemnity obligations under Section 14
("Indemnification by Pandesic"); (v) upon five (5) business days written notice
terminate the Managed Services for any Merchant Agreement in which Pandesic has
failed to include certain provisions in such Merchant Agreement in accordance
with Section 12.2(e) ("Pandesic Representations and Warranties") *** Pandesic
has failed to comply with its obligations in Section 11 ("Merchant Web Site
Content"); or (vi) terminate this Agreement upon Pandesic's material breach of
the representations stated in Section 12.2(d) which breach is not cured within
fifteen (15) business days after written notice thereof is received by Pandesic.
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(b) Termination by Pandesic. In addition to any other rights Pandesic
------------------------
may have under this Agreement or applicable law, Pandesic may, at Pandesic's
option, terminate this Agreement, (i) upon a material breach by DIGEX of DIGEX's
representations and warranties under this Agreement which breach is not cured
within fifteen (15) business days after written notice thereof is received by
DIGEX, (ii) upon ten (10) business days written notice of chronic, material
substandard performance by DIGEX as measured by its performance obligations set
forth in Exhibit A ("Pandesic Managed Service Definition Document"), Exhibit B
("Collocation Support Definition"), and Exhibit E ("Service Level Agreement")
or (iii) immediately upon DIGEX ceasing to do business in the normal course,
becoming or being declared insolvent or bankrupt, being the subject of any
proceeding relating to liquidation or insolvency which is not dismissed within
ninety (90) calendar days or making an assignment for the benefit of its
creditors.
(c) Effect of Termination: Merchant Agreements. In the event of any
------------------------------------------
expiration or termination of this Agreement, Pandesic shall have no right to add
Merchants to this Agreement from and after the termination date. However, in the
event of any expiration or termination of this Agreement except for termination
by DIGEX under Section 18.2(a) ("Termination by DIGEX"), in addition to the
obligations under Section 3 ("Minimum Commitment"), Pandesic shall have the
option to have DIGEX continue to provide Managed Services with respect to each
Web Site required to be maintained by Pandesic under Merchant Agreements added
to the coverage of this Agreement prior to the termination date, for a period
from the termination date through the twenty-four (24) month anniversary of the
date upon which DIGEX first began to provide Managed Services with respect to
such Web Site
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("Extension Period"). Pandesic shall continue to be obligated for the payment of
Managed Service Fees pursuant to Section 2.2 ("Payment") with respect to all
Managed Services provided by DIGEX during the Extension Period.
(d) Mandatory Transition Period. In the event of any termination of
---------------------------
this Agreement, in addition to the parties' obligations under Section 3
("Minimum Commitment") and Section 18.2(c) ("Effect of Termination: Merchant
Agreements"), Pandesic shall have the right, upon providing written notice to
DIGEX, to receive Managed Services from DIGEX for up *** after the termination
date (the "Mandatory Transition Period"). With respect to a Mandatory Transition
Period due to termination by DIGEX pursuant to Section 18.2(a), Pandesic shall
pay Managed Service Fees on a monthly basis in advance, but in the event that
Pandesic fails to make any one (1) payment when due during the Mandatory
Transition Period, DIGEX shall be entitled to discontinue the provision of
Managed Services and Pandesic shall be obligated to pay the remainder of the
minimum commitment for each applicable Required Server.
(e) Effect of Termination: Minimum Commitment. In the event of
-----------------------------------------
termination of this Agreement by DIGEX pursuant to Section 18.2(a) ("Termination
by DIGEX"), DIGEX shall either, upon written notice to Pandesic, (i) continue to
provide Managed Services for each Required Server for the remainder of each ***
minimum commitment period or such shorter period (which shorter period shall be
in addition to the Mandatory Transition Period in Section 18.2(d)) that DIGEX
elects (the "Optional Period"), and during such Optional Period, Pandesic shall
pay Managed Service Fees on a monthly basis in advance or (ii) discontinue the
provision of Managed Services after the Mandatory Transition Period, in which
case Pandesic shall not be obligated to pay for the remainder of any ***
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*** minimum commitment period, except as set forth in Section 18.2(d) above.
Notwithstanding the foregoing, in the event that Pandesic fails to make any one
(1) payment when due during the Optional Period, DIGEX shall be entitled to
discontinue the provision of Managed Services and Pandesic shall be obligated to
pay the remainder of the minimum commitment for each applicable Required Server.
(f) Return of Pandesic Software and Merchant Content. Upon the
----------------------------------------------------
expiration or termination of this Agreement, DIGEX shall return to Pandesic all
Pandesic Software, hardware, Merchant Content and any other property and
materials provided to DIGEX by Pandesic in connection with this Agreement except
that DIGEX shall retain such Pandesic Software, hardware and Merchant Content as
is required to provide Managed Services to Merchants pursuant to Sections 3
("Minimum Commitment"), 18.2(c) ("Effect of Termination: Merchant Agreements"),
18.2(d) ("Mandatory Transition Period") and 18.2(e) ("Effect of Termination:
Minimum Commitment") until such time that DIGEX's obligation to provide such
Managed Services concludes, at which point DIGEX shall return to Pandesic all
Pandesic Software, hardware and Merchant Content.
(g) Return of DIGEX Software and Materials. Upon the later occurrence
--------------------------------------------
of expiration or termination of this Agreement or the termination of any
Extension Period, Pandesic shall (i) pay all amounts due and owing to DIGEX
hereunder, (ii) remove from DIGEX's premises all property owned by Pandesic and
(iii) return to DIGEX all software, access keys and any other material provided
to Pandesic by DIGEX under this Agreement.
(h) Service Transfer Assistance. It is the intent of the parties that
-----------------------------
at the expiration or termination of this Agreement, DIGEX will cooperate with
Pandesic to assist with the orderly
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transfer of the services provided by DIGEX hereunder to another services
provider or to Pandesic itself. Prior to expiration or termination of the
Agreement, Pandesic may request DIGEX to perform, and, if so requested, DIGEX
shall perform, services in connection with migrating the work of Pandesic to
another services provider or Pandesic itself. Pandesic shall reimburse DIGEX, at
DIGEX's then current time and materials rates in advance, for any services
performed by DIGEX pursuant to this Section 18.2(h), if DIGEX terminates
Pandesic for cause in accordance with Section 18.2(a). In all other cases,
Pandesic shall reimburse DIGEX, at DIGEX's then current time and materials rates
in arrears, for any services performed by DIGEX pursuant to this Section
18.2(h)
(i) Cessation of Pandesic's Business. In the event that Pandesic and its
--------------------------------
owners determine that Pandesic will cease doing business, Pandesic shall (i)
notify its existing Merchants that DIGEX is willing to provide services similar
to those provided by Pandesic, and (ii) work with its third party software
vendors and existing channel partners who have SAP knowledge to coordinate
efforts with DIGEX for the continuing provision of such services.
Notwithstanding the foregoing, DIGEX shall have no obligation to provide any
such services to Pandesic's existing Merchants, and this Section 18.2(i) shall
have no effect on Pandesic's obligations and DIGEX's rights under this Agreement
with respect to Pandesic's cessation of business. For purposes of this section
only, "cease doing business" means that Pandesic is no longer functioning as a
business and that no parent, subsidiary or affiliate of Pandesic, or successor
to Pandesic's business, has assumed the responsibility of providing services to
Merchants under the Merchant Agreements.
19. Authorized Representative
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(a) Within thirty (30) calendar days after the Effective Date, DIGEX and
Pandesic shall each designate, by written notice to the other party, a
representative (each, an "Authorized Representative") who is authorized to act
on the respective party's behalf with respect to those matters delegated to the
Authorized Representative. Each party may designate an alternate representative
with full authority to act in the absence of the Authorized Representative.
Each party shall have the right to change its Authorized Representative or
alternate by written notice to the other party.
(b) The Authorized Representatives shall provide liaison between the
parties in order to provide effective cooperation, exchange of information and
consultation on a prompt and orderly manner concerning the various matters which
may arise, from time to time, in connection with this Agreement. In addition,
the Authorized Representatives shall have the following responsibilities, among
others:
1. Perform those functions and duties assigned to them in this Agreement.
2. Review and attempt to resolve any disputes between the parties arising
under this Agreement. Should the Authorized Representatives be unable
to resolve a dispute and should dispute escalation be unsuccessful,
the matter shall be resolved in accordance with the provisions of
Section 17 ("Dispute Resolution"); and
3. Arrange for the development and completion of procedures to implement
the provisions of this Agreement.
(c) All actions, agreements, resolutions, determinations or reports
made by the Authorized Representatives shall be in writing and shall become
effective when signed by both Authorized Representatives.
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(d) The party he or she represents shall pay any fees and expenses
incurred by an Authorized Representative in connection with his or her duties.
20. Miscellaneous
20.1 Entire Agreement
This Agreement and the Exhibits attached hereto constitute the entire
agreement between Pandesic and DIGEX with respect to the subject matter hereof
and supercedes all prior oral negotiations and prior written agreements with
respect thereto.
20.2 Independent Contractors
Nothing in this Agreement or in the course of dealing between DIGEX
and Pandesic pursuant hereto shall be deemed to create between DIGEX and
Pandesic (including their respective directors, officers, employees and agents)
a partnership, joint venture, association, employment relationship or any other
relationship, other than that of independent contractors with respect to each
other. Pandesic shall not have the authority to commit or legally bind DIGEX in
any manner whatsoever, including, but not limited to, the acceptance or making
of any agreement, representation or warranty.
20.3 Waiver; Non-Waiver; Amendment
Failure by either party to enforce any of the provisions of this
Agreement or any rights with respect hereto or the failure to exercise any
option provided hereunder shall in no way be considered to be a waiver of such
provision, right or option, or to in any way affect the validity of this
Agreement. No waiver of any rights under this Agreement, nor any modification
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or amendment of this Agreement shall be effective or enforceable, unless in
writing and signed by both parties.
20.4 Force Majeure
Attached hereto as Exhibit F ("Disaster Mitigation Plan") is DIGEX's
disaster recovery plan, which outlines its obligations in the event of any
natural disaster or acts of God. Provided that DIGEX has used its best efforts
to comply with its Disaster Mitigation Plan, DIGEX shall be excused from its
performance under this Agreement to the extent that it is prevented, hindered or
delayed by such causes. Except for the payment of Managed Service Fees and
Additional Services Fees by Pandesic, if the performance of any part of this
Agreement by Pandesic is prevented, hindered, delayed or otherwise made
impracticable in the event of any natural disaster, acts of God, riot, judicial
or governmental or military action, or labor dispute, Pandesic shall be excused
from its performance under this Agreement to the extent that it is prevented,
hindered, or delayed by such causes. DIGEX shall be excused from its performance
under this Agreement to the extent that it is prevented, hindered or delayed by
any riot, judicial or governmental or military action, labor dispute, or failure
caused by any telecommunication or other Internet service provider.
20.5 Governing Law
This Agreement shall be governed by the substantive laws of the State
of New York without giving effect to any choice of law principles that could
result in the application of the laws of any other jurisdiction.
20.6 Attorneys' Fees
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In the event any proceeding or lawsuit is brought by either party; in
connection with this Agreement, the prevailing party in such proceeding shall be
entitled to receive its costs, expert witness fees and reasonable attorneys'
fees, including costs and fees on appeal.
20.7 Assignment
Neither party may sell, assign or transfer any of its rights, duties
or obligations under this Agreement (whether by assignment, merger, transfer of
assets, sale of stock, operation of law or otherwise) without the prior written
consent of the other party and any assignment not in compliance with this
Section 20.7 shall be deemed void. Notwithstanding the foregoing, either party
may sell, assign or transfer any of its rights, duties or obligations under this
Agreement in the event that the proposed assignee is the successor in title to
all of the assigning party's business, or to a party's wholly-owned subsidiary,
parent or subsidiary of a party's parent (whether by assignment, merger,
transfer of assets, sale of stock, operation of law or otherwise) without the
prior written consent of the other party; provided, however, the assignor shall
remain fully liable for all of the terms, conditions, duties, covenants and
other obligations under this Agreement through the Initial Term and each Renewal
Term, if applicable, of this Agreement. A party, in its sole discretion, may
enforce the terms, conditions, duties, covenants and other obligations under
this Agreement against the assignor and/or assignee upon the material breach of
this Agreement by either the assignor and/or assignee.
20.8 Notice
All notices or other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), or (c) two (2) calendar
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days after being deposited for delivery with a nationally recognized overnight
delivery service, such as Federal Express, and addressed or sent, as the case
may be, to the appropriate addresses or facsimile numbers set forth below (or to
such other addresses or facsimile numbers as a party may designate by notice to
the other party):
In the case of DIGEX:
DIGEX, Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of Pandesic:
Pandesic, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
20.9 Severability
If any provision of this Agreement is held invalid or unenforceable,
such provision shall thereupon be deemed modified only to the extent necessary
to render the same valid or eliminated from this Agreement, as the situation may
require, and this Agreement shall be enforced and construed as if such provision
had been included herein as so modified in scope or applicability or not been
included herein, as the case may be.
20.10 No Third Party Beneficiaries
This Agreement inures to the benefit of DIGEX and Pandesic only and
no third party shall enjoy the benefits of this Agreement or shall have any
rights hereunder.
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20.11 Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but one agreement.
20.12 Headings
The headings preceding the text of the paragraphs of this Agreement
have been inserted solely for convenience of reference and neither constitutes a
part of this Agreement nor affects its meaning, interpretation or effect.
20.13 Survival
Any claims arising out of or related to this Agreement must be
brought no later than one (1) year after it has accrued. Sections 1.4, 2, 3,
9.1, 9.2, 10, 11, 12, 13, 14, 15, 16, 17, 18.2 and 20 shall survive the
termination of Managed Services under this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
PANDESIC, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title: President
------------------------------
DIGEX, INCORPORATED.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: President & General Manager
------------------------------
40
*** Certain provisions of this exhibit have been filed separately with the
Commission pursuant to an application for confidential treatment.
EXHIBIT 10.1SCH
. The attached exhibits are subject to change upon the mutual agreement of
the parties, such agreement not to be unreasonably withheld by either
party. Any changes to any exhibit shall be reflected in the attachment of
an updated exhibit to this Agreement, and when such updated exhibit is
attached, the parties shall be bound by the terms of such updated exhibit.
. Notwithstanding the previous paragraph, with respect to Exhibit E - Service
Level Agreement, DIGEX agrees to meet with Pandesic and discuss in
good faith commercially acceptable modifications to the Service Level
Agreement.
Exhibit A - Pandesic Managed Service Definition Document
--------------------------------------------------------
The Pandesic Managed Service Definition Document defines the responsibilities of
DIGEX for the Managed Service provided for Pandesic's customers. This service
level definition applies to all Fully Managed Servers for which Pandesic
contracts with DIGEX, including all standard Pandesic server configurations
hosted for Pandesic on behalf of their Merchants, additional web servers or
application servers that match the configuration as outlined by the standard
Pandesic server configuration as current at that time, and Pandesic support
servers.
This document will cover the following topics:
- Monitoring & Troubleshooting
- Installation/Deployment Services
- Ongoing System Support
- Pandesic Administrative Capabilities
- Additional Services
MONITORING & TROUBLESHOOTING
This section defines the monitoring capabilities provided by DIGEX as part of
standard monitoring for the Pandesic servers. A standard set of monitoring
activities occurs for each standard Pandesic server. The tools used to perform
these monitoring activities are described in detail in Appendix 1.
***
***
2
***
3
***
4
***
5
***
6
***
7
***
8
***
9
***
10
DIGEX-INTERNAL ESCALATION PROCESS
The following definition of roles and escalation times serves as DIGEX's model
for managing the closure of unresolved problems. As a problem remains unresolved
and one of the time thresholds is reached, an additional DIGEX employee, in the
list provided below, is engaged to provide additional assistance. Independent of
the communication process outlined below, throughout the troubleshooting and
escalation process, additional resources beyond those defined below will be
leveraged wherever possible to solve the problem.
The roles involved in the escalation process are defined as follows:
***
11
***
12
***
INSTALLATION/DEPLOYMENT SERVICES
The following section is intended to list and distinguish between activities
which Digex provides as part of "standard" support to Pandesic, "non-standard"
tasks which Digex will provide for an additional fee, and "Pandesic-Supported"
tasks which Digex does not provide at all. All non-standard support tasks
requested by Pandesic, and not related to "critical" or "immediate" severity
issues as defined in Exhibit E - Section I., Paragraph D "Problem Management",
will need to be scheduled based upon resource availability. DIGEX reserves the
right to provide "non-standard" support services at no cost to Pandesic;
decisions to provide "non-standard" support services at no cost to Pandesic will
be made on a case-by-case basis by DIGEX.
***
13
***
14
***
The following section is intended to list and distinguish between activities
which Digex provides as part of "standard" support to Pandesic, "non-standard"
tasks which Digex will provide for an additional fee, and "Pandesic-Supported"
tasks which Digex does not provide at all. DIGEX will assist Pandesic in the
removal of a virus or other disabling device as a non-standard support task,
billable at an hourly time and materials rate.
***
15
***
16
***
17
***
18
***
19
Appendix 1: Overview of DIGEX Managed Server Monitoring Tools
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DIGEX uses a variety of tools to provide the full suite of monitoring
functionality that is required by our customers. These tools represent what
DIGEX deems to be best-of-breed today. In the future, DIGEX may decide to change
the specific monitoring tools referenced below; however, any replacement tools
will still allow DIGEX to offer the functionality that is defined below.
SiteScope
SiteScope monitors our web server environment around the clock using over 20
standard monitors. If a problem should arise, SiteScope's paging, e-mail, and
SNMP notification functions ensure that we're the first to know. SiteScope can
execute a script in response to error conditions, providing immediate correction
of common problems.
Following is a description of what the Server Operations Center can monitor
using SiteScope
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WhatsUp Gold(SM)
WhatsUp Gold is a scalable enterprise network-monitoring tool, designed for
large, hierarchical networks. WhatsUp Gold also features remote notification by
beeper, pager, e-mail, or prerecorded telephone messages.
Keynotes(SM)
Keynote Systems is the premier supplier of Internet performance data and
diagnostic services to corporations with business-critical web sites.
Keynote Perspective - enables our customers to measure, compare and assure the
Quality of Service (QOS) of their sites, thereby improving competitiveness
and customer satisfaction. The foundation of this service is an extensive
network of customizable software measurement agents connected to the major
Internet backbones in dozens of metropolitan areas worldwide plus a
sophisticated operations center for collecting, analyzing and disseminating
Internet performance data.
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Exhibit B - Collocation Support Definition
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Exhibit C - Fees For Managed Services
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A. Standard Two-Server Configuration Pricing
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B. Incremental Costs to Pandesic
1. Transportable Web Servers
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Transportable Web Servers are defined web servers, which are shared among
Pandesic configurations during the life of their 24-month contract. These
transportable servers are intended to help satisfy peak demand volumes of
traffic which will exist on varying Pandesic Merchant sites based upon
seasonal purchasing activity at different times in the calendar year.
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2. Engineering Activities
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Pandesic has requested ongoing support for Engineering activities which lie
outside of the scope of Managed Services as defined in Exhibit A.
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3. DIGEX Professional Services' WSUR Usage Reporting Service
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Pandesic may elect to purchase the WSUR Usage Reporting Service from DIGEX for
some or all of Pandesic Merchants. The following information describes both the
functionality and standard reports provided as part of the WSUR Usage Reporting
Service.
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III. PRICING
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C. Network Connectivity
DIGEX has provided Pandesic the ability to purchase bandwidth in bulk on behalf
of Pandesic Merchants. This bandwidth is shared among Pandesic customers as
defined by the Pandesic Engineering team.
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Exhibit D - Acceptable Use Policy
1. Introduction. This document sets forth the principles of the DIGEX Acceptable
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Use Policy that governs the use by the Customer identified on the attached order
form ("Customer") of the services and products provided by DIGEX, Inc.
("Company") described on the attached order form ("Services and Products"). The
Acceptable Use Policy has been created to promote the integrity, security,
reliability and privacy of Company's Web Site Management Facility, network, and
Customer data contained within. Company retains the right to modify the
Acceptable Use Policy at any time and any such modification shall be
automatically effective as to all customers when adopted by Company.
Questions or comments regarding the Acceptable Use Policy should be
forwarded to Company via:
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
2. Compliance With Law.
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Customer shall not post, transmit, re-transmit or store material on or
through any of Services or Products which, in the sole judgment of Company (i)
is in violation of any local, state, federal or non-United States law or
regulation, (ii) threatening, obscene, indecent, defamatory or that otherwise
could adversely affect any individual, group or entity (collectively, "Persons")
or (iii) violates the rights of any person, including rights protected by
copyright, trade secret, patent or other intellectual property or similar laws
or regulations including, but not limited to, the installation or distribution
of "pirated" or other software products that are not appropriately licensed for
use by Customer. Customer shall be responsible for determining what laws or
regulations are applicable to its use of the Services and Products.
3. Prohibited Uses of Services and Products.
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In addition to the other requirements of this Use Policy, Customer may
only use the Services and Products in a manner that, in the Company's sole
judgment, is consistent with the purposes of such Services and Products. If the
Customer is unsure of whether any contemplated use or action is permitted,
please contact the Company as provided above. By way of example, and not
limitation, uses described below of the Services and Products are expressly
prohibited.
3.1. General.
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3.1.1. Resale of Services and Products, without the prior
written consent of Company.
3.1.2. Deceptive on-line marketing practices.
3.1.3. Violations of the rights of any Person protected
by copyright, trade secret, patent or other
intellectual property or similar laws or
regulations, including, but not limited to, the
installation or distribution of "pirated" or other
software products that are not appropriately
licensed for use by
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Customer.
3.1.4. Actions that restrict or inhibit any Person,
whether a customer of the Company or
otherwise, in its use or enjoyment of any
of the Company's Services or Products.
3.2. System and Network.
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3.2.1. Introduction of malicious programs into the
network or server (e.g., viruses and worms).
3.2.2. Effecting security breaches or disruptions of
Internet communication. Security breaches include,
but are not limited to, accessing data of which
Customer is not an intended recipient or logging
into a server or account that Customer is not
expressly authorized to access. For purposes of
this Section 3.2.2., "disruption" includes, but is
not limited to, port scans, flood pings, packet
spoofing and forged routing information .
3.2.3. Executing any form of network monitoring which
will intercept data not intended for Customer's
server.
3.2.4. Circumventing user authentication or security of
any host, network or account.
3.2.5. Interfering with or denying service to any user or
any host.
3.2.6. Using any program/script/command, or sending
messages of any kind, designed to interfere with a
user's terminal session, via any means, locally or
via the Internet.
3.2.7. Creating an "active" full time connection on a
Company-provided dial-up account by using
artificial means involving software, programming
or any other method.
3.2.8. Utilizing a Company-provided dial-up account for
purposes other than facilitating connectivity to
the products and services provided by the Company.
This includes copying or creating files utilizing
more than 1MB of disk space on the dial-up account
servers.
3.2.9. Failing to comply with the Company's procedure
relating to the activities of customers on
Company's premises.
3.3. Billing.
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3.3.1. Furnishing false or incorrect data on the Order
Form, contract or online application, including
fraudulent use of credit card numbers.
3.3.2. Attempting to circumvent or alter the processes or
procedures to measure time, bandwidth utilization,
or other methods to document "use" of Company's
products and services.
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3.4. Mail.
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3.4.1. Sending unsolicited mail messages, including the
sending of "junk mail" or other advertising
material to individuals who did not specifically
request such material ("e-mail spam").
3.4.2. Harassment, whether through language, frequency or
size of messages.
3.4.3. Unauthorized use, or forging, of mail header
information.
3.4.4. Using Company or Customer account to collect
replies to messages sent from another provider,
which violate these rules or those of that
provider.
3.4.5. Creating or forwarding "chain letters" or other
"pyramid schemes" of any type.
3.5. Usenet Newsgroups
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3.5.1. Posting the same or similar messages to large
numbers of Usenet newsgroup ("Newsgroup spams").
3.5.2. Posting chain letters of any type.
3.5.3. Posting encoded binary files to newsgroups not
specifically named for that purpose.
3.5.4. Cancellation or superseding of posts other than
your own.
3.5.5. Forging of header information.
3.5.6. Solicitations of mail for any other e-mail address
other than that of the poster's account or
service, with intent to harass or to collect
replies.
3.6. Roles Regarding UNIX Managed Server.
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3.6.1. Customer may not create/update/delete accounts
created and maintained by Company. Specifically,
the Company account may not be altered in any
manner nor may any account with a UID of less than
1000 be altered.
3.6.2. Customer may not change the partitioning or mount
points of any drive.
3.6.3. Customer may not create/update/delete any file in
the /usr directory tree.
3.6.4. Customer may not install Microsoft(C) FrontPage
Extensions unless updated on the /usr directory
tree.
3.6.5. Customer may not create.rhosts or /etc/.host
.equiv files.
3.6.6. Customer may not implement any procedure or
process that would allow one to login as root
without using the root password. Customer may not
create suid scripts or programs.
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3.6.7. Customer may not alter the system kernel.
3.6.8. Customer may not alter the /sys or /etc/system
directory trees or any files contained therein.
3.6.9. Customer may not apply operating system and
application patches to software not installed and
solely maintained by the Customer, unless
notification is given to Company.
3.6.10. Customer may not change the root shell.
3.6.11. Customer may not alter the contents of /.k5login.
3.6.12. Customer may not alter /etc/fstab or /etc/vfstab.
3.6.13. Customer may not share or export file systems.
This includes modifying /etc/exports,
/etc/dfs/sharetab, and /etc/netgroup.
3.6.14. Customer may not modify the decode or root alias
in the /etc/aliases file.
3.6.15. Customer may not change the "identity" of the
system. This includes modifying /etc/hosts,
/etc/hostname.*, /etc/defaultrouter, /etc/networks
and /etc/ethers.
3.6.16. Customer may not modify the system in any manner
that restricts or alters access to the system by
Company's employees.
3.6.17. Customer may acquire root privileges after
successful login of a valid non-root userid and
using su to gain access as root.
3.6.18. Customer may create/update/delete all aspects of
Customer created user accounts. This may includes
modifying home directory permissions, user
passwords, etc.
3.6.19. Customer may use FTP to create/update/delete files
and directories.
3.6.20. Customer may add to, but may not modify, existing
data in the following configuration files:
/etc/aliases, /etc/group, /etc/rc.local,
/etc/▇▇▇▇▇▇▇▇.▇▇ file and root crontab.
3.6.21. Customer may install software on the server
provided the installation meets all of the
criteria detailed above, and Company is notified
of such installation.
3.7. Roles Regarding Windows NT Managed Server.
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3.7.1 Customer may not create/update/delete accounts
created and maintained by Company. Specifically,
Company account may not be altered in any manner.
3.7.2 Customer may not install software that does not
execute as a service.
3.7.3 Customer may not install software that does not
have a remote administration capability.
3.7.4 Customer may not install applications that do not
run within a logon account different from that of
the installing user.
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3.7.5. Customer may not install applications which must
be restarted when one user logs off and another
user logs on.
3.7.6. Customer may not install applications that do not
execute when an individual is not logged on to the
server.
3.7.7. Customer may not modify the network and system
settings of the server.
3.7.8. Customer may not apply operating system and
application patches to software not installed and
solely maintained by the customer, unless
notification is given to Company.
3.7.9. Customer may use FTP to create/update/delete files
and directories.
3.7.10. Customer may create/update/delete all aspects of
Customer created user accounts. This includes
modifying home directory permissions, user
passwords, etc.
3.7.11. Customer may start and stop all Windows NT 4.0
Services, including the WWW and FTP
services.
3.7.12. Customer may install software on the server
provided the installation meets all of the
criteria detailed above, and Company is notified
of such installation.
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Exhibit E - Service Level Agreement
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This Exhibit supplements and amends and is hereby made a part of the Agreement
by and between DIGEX, Incorporated ("Company") and Pandesic ("Customer"), dated
December 30, 1998.
This Exhibit provides service level guarantee and availability requirements
between the Company and the Customer. It is intended to provide a quantitative
service commitment to the Customer as a result of the Customer's specific
configuration characteristics.
This Exhibit shall only be effective for the initial contract term of the
Agreement between Company and Customer, but may be extended upon mutual
agreement for any subsequent renewal period. If Customer changes its
configuration, excluding the addition of software, hardware upgrades, or changes
that do not reduce or effect the current level of redundancy as shown in Exhibit
C - Section A. "Standard Two-Server Configuration Pricing," then this Exhibit
shall not apply to new equipment and Company shall have the right to amend this
Exhibit. Additionally, if Customer or Company terminates this Agreement or the
Agreement expires, then this Exhibit shall terminate automatically and both
parties shall no longer have any rights or obligations hereunder, except to the
extent that any rights or obligations survive the termination of the Agreement.
I. Obligations of Company
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D. PROBLEM MANAGEMENT.
Problem management issues are restricted to items within express or direct
control of DIGEX, Inc. There are five (5) severity levels included under
the description of Problem Management. Each severity level carries maximum
response time associated with it. The response time is defined as maximum
period under which Company will begin investigation of the problem and
create a Case (Trouble Ticket). The five (5) severity levels are as
follows:
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EXHIBIT F DISASTER MITIGATION PLAN
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DEFINITION
DIGEX sees disaster recovery and mitigation as a spectrum of strategies and
techniques instituted through procedures and precautions implemented in
accordance with customer requirements. Disaster mitigation will include fault-
tolerant and redundant systems. Some of these systems will include the equipment
configuration that DIGEX recommends and implements for the customer, and some
will be DIGEX infrastructure based.
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