EXHIBIT 10.3
INTERNET TRAFFIC AGREEMENT
THIS AGREEMENT, is made and entered into this 7th day of January, 2000,
by and between MegaMedia Networks, Inc., a Delaware corporation, its affiliates,
successors and assigns, hereinafter referred to as "MegaMedia" and NextTraffic,
Inc., a Delaware corporation, its affiliates, successors and assigns,
hereinafter referred to as "NextTraffic."
WHEREAS MegaMedia is a media company providing its customers with
entertainment, news, marketing, and advertising services via the internet; and,
WHEREAS, NextTraffic is an internet traffic consolidator who provides
its clients with internet traffic; and,
WHEREAS, MegaMedia desires and intends to acquire internet traffic from
NextTraffic as hereinafter provided;
NOW THEREFORE, in consideration of the foregoing, NextTraffic and
MegaMedia agree as follows:
1. RECITATIONS. The foregoing recitations are true and correct.
2. CERTAIN DEFINITIONS. The following terms used in this Agreement, with
their initial letters capitalized, unless the context requires
otherwise or unless otherwise expressly provided in this Agreement,
have the meanings specified in this Section 2. The singular includes
the plural and vice versa, as the context requires. When used in this
Agreement, the following terms have the meanings set forth below:
A. "Agreement" means this written agreement between MegaMedia and
NextTraffic.
B. "Day" means a 24 hour period spanning from midnight of one day
to midnight of the following day.
C. "Host" means an entity that stores third-party Web Sites on
its Internet server computers, receives or stores commands or
data transmitted by Internet users, transmits Web Page data to
users' Internet addresses, and performs related maintenance.
D. "Internet" means the global computer network comprising
interconnected networks using standard protocols as it exists
contemporaneously with the execution of this Agreement,
including but not limited to the world wide web, as well as
any functionally equivalent medium, or medium competitive to
the Internet that may now or hereafter exist.
E. "Portal Page" means the first page viewed by a visitor or
customer accessing the MegaMedia Web Site also known as the
First Page.
F. "Protocols" means a set of rules that regulate the way data is
transmitted between computers.
G. " Visitor" and "Traffic" mean a person who accesses the Portal
Page of the MegaMedia Web Site via tracked database referral
from NextTraffic.
H. "Web Master Program" means an incentive based traffic or
customer referral program.
I. "Web Page" means each individual screen display contained in
MegaMedia's Web Site.
J. "Web Site" means all Web Pages and Domain Names associated
with MegaMedia and its products or services, and which are
stored on MegaMedia's Internet Server computer.
K. "World Wide Web" or "WWW" is a subset of the Internet, and is
a common system for browsing Internet Web Sites.
3. TERM. The term of this Agreement is that period of time beginning on
the effective date of this Agreement and ending three calendar years
thereafter.
4. OBLIGATIONS OF NEXTTRAFFIC. NextTraffic covenants and agrees with
MegaMedia that it shall during the terms of this Agreement:
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A. Supply two million (2,000,000) Visitors per day to the
MegaMedia Web Site Portal Page in an Even Flow. NextTraffic
shall be compensated for the Visitors it supplies as provided
in Paragraph 6 below. MegaMedia, in its sole and unfettered
discretion, shall without liability to NextTraffic, have the
unrestricted right to lessen, diminish or terminate the
purchase of Visitors from NextTraffic at any time and for any
reason upon the giving of thirty (30) days written notice of
same to NextTraffic.
B. Upon request, NextTraffic will provide MegaMedia with all
documentary support evidencing NextTraffic's ability to
perform the above services.
5. TRAFFIC VERIFICATION. Visitors provided by NextTraffic to MegaMedia
shall be verified through independent ▇▇▇▇▇▇▇ I/PRO AUDIT reporting.
A. Monthly Reports. MegaMedia shall issue a monthly report to
NextTraffic indicating the total number of Visitors that have
been provided by NextTraffic to the MegaMedia Portal Page per
Day.
B. Server Logs. NextTraffic shall also have the right to review
the raw data contained in MegaMedia's server logs for an
immediately preceding three (3) month period.
6. CONSIDERATION TO NextTraffic. In consideration for the above referenced
services to be rendered and provided by NextTraffic to MegaMedia,
MegaMedia agrees to:
A. Pay as a Fee for the Traffic supplied by NextTraffic pursuant
to this Agreement, and subject to adjustment for sales that
are subsequently not paid to MegaMedia for any reason, on a
monthly basis, a sum equal to twenty five percent (25%) of all
purchases of MegaMedia services made by Visitors that are
supplied to MegaMedia by NextTraffic. MegaMedia shall pay the
above Traffic Fee to NextTraffic on Recurring Revenue
(recurring charges billed on a monthly basis) received by
MegaMedia arising out of purchases of MegaMedia services made
by Visitors that were supplied to MegaMedia by NextTraffic.
MegaMedia's obligation to pay the above Traffic Fee to
NextTraffic for each month for which Recurring Revenue payment
is received, shall be limited to a maximum of two (2)
additional months after the original sale; or $0.05 per
Visitor, whichever is greater.
7. REPRESENTATIONS AND WARRANTIES OF NEXTTRAFFIC. NextTraffic warrants and
represents to MegaMedia that:
A. NextTraffic acknowledges that it has been advised to consult
with legal counsel of its choosing and acknowledges that
MegaMedia is represented by legal counsel and that this
Agreement and all other documents related to MegaMedia that
have been presented to it have been prepared solely for the
benefit of MegaMedia by its counsel, who does not and cannot
represent NextTraffic or its interests in this transaction.
B. No third party has or will have any claim, right, title, lien,
security interest or other interest in or to any of the Goods
or Services to be provided by NextTraffic to MegaMedia
pursuant to this Agreement.
C. NextTraffic has all necessary legal capacity, right, power and
authority to enter into, execute, deliver, perform and be
bound by this Agreement, free of any liens, security
interests, encumbrances, claims or interests of any third
party, and to perform all NextTraffic's obligations under this
Agreement.
D. NextTraffic's execution and delivery of this Agreement and the
performance by NextTraffic of NextTraffic's obligations under
this Agreement do not breach, and will not result in a breach
or violation of, any agreement, lien, security interest or
other understanding or obligation to which NextTraffic is a
party or by which NextTraffic is bound.
E. There is no demand, claim, suit, action, arbitration or other
proceeding pending or threatened (or for which any basis
exists) that in any way questions or jeopardizes (or could
question or jeopardize) the ability of NextTraffic to enter
into this Agreement or to perform any of NextTraffic's
obligations hereunder.
8. REPRESENTATIONS AND WARRANTIES OF MEGAMEDIA. MegaMedia represents,
warrants, and agrees as follows:
A. No third party has or will have any claim, right, title, lien,
security interest or other interest in or to any of the shares
of common stock to be provided by MegaMedia to NextTraffic
pursuant to this Agreement.
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B. MegaMedia has all necessary legal capacity, right, power and
authority to enter into, execute, deliver, perform and be
bound by this Agreement, free of any liens, security
interests, encumbrances, claims or interests of any third
party, and to perform all MegaMedia's obligations under this
Agreement.
C. MegaMedia's execution and delivery of this Agreement and the
performance by MegaMedia of MegaMedia's obligations under this
Agreement do not breach, and will not result in a breach or
violation of, any agreement, lien, security interest or other
understanding or obligation to which MegaMedia is a party or
by which MegaMedia is bound.
D. There is no demand, claim, suit, action, arbitration or other
proceeding pending or threatened (or for which any basis
exists) that in any way questions or jeopardizes (or could
question or jeopardize) the ability of MegaMedia to enter into
this Agreement or to perform any of MegaMedia's obligations
hereunder.
9. INDEMNITY.
A. NextTraffic shall indemnify, defend and hold harmless
MegaMedia and its officers, directors, employees and agents
(separately and collectively provided to as the
"Indemnitees"), against and in respect of:
i. All liabilities and other obligations of NextTraffic
of any nature, whether accrued, absolute, contingent,
or otherwise, arising out of acts or omissions of
NextTraffic or its agents, employees, directors,
officers, representatives, shareholders, members or
contractors, in its performance of this Agreement.
ii. Any and all liabilities, whether under the Securities
Act of 1933, as amended, the securities act of any
state, or any other statute or common law or
otherwise, arising out of the sale or disposition by
NextTraffic of any of such securities in a manner
contrary to the representations set forth herein.
iii. Any claim, suit, obligation, liability, loss, damage,
injury or expense, arising out of, connected with,
related to, or resulting from any breach of any
covenant, representation, warranty or agreement made
by NextTraffic in this Agreement.
iv. All actions, suits, proceedings, demands,
assessments, judgment, costs and expenses incident to
any of the foregoing to include, without limitation,
attorney's fees and costs for all proceedings, trials
and appeals, whether incurred before, during or after
trial or appeal.
v. NextTraffic shall reimburse MegaMedia on demand for
any payment made by it at any time in respect of any
liability, obligation or claim to which the foregoing
indemnity relates. Should any claim covered by the
foregoing indemnity be asserted against MegaMedia,
MegaMedia shall notify NextTraffic promptly and give
it an opportunity to defend the same, and MegaMedia
shall extend reasonable cooperation to NextTraffic in
connection with such defense. In the event that
NextTraffic fails to defend the same within a
reasonable time, MegaMedia shall be entitled to
assume the defense thereof, and NextTraffic shall be
liable to repay MegaMedia for all its expenses
reasonably incurred in connection with the defense
(including reasonable attorneys' fees and settlement
payments).
vi. In the event NextTraffic does not reimburse MegaMedia
as set forth above, then MegaMedia shall have a right
to set off the amount of such liability, obligation
or claim, including MegaMedia's other expenses as set
forth above, against monies or MegaMedia shares due
NextTraffic by virtue of this or any other Agreement
between MegaMedia and NextTraffic, such amounts being
applied first to the next payment due and to each
payment due thereafter until such amount is repaid to
MegaMedia in full.
B. MegaMedia shall indemnify, defend and hold harmless
NextTraffic and its officers, directors, employees and agents
(separately and collectively provided to as the
"Indemnitees"), against and in respect of:
i. All liabilities and other obligations of MegaMedia of
any nature, whether accrued, absolute, contingent, or
otherwise, arising out of acts or omissions of
MegaMedia or its agents, employees, directors,
officers, representatives, shareholders, members or
contractors, in its performance of this Agreement.
ii. Any and all liabilities, whether under the Securities
Act of 1933, as amended, the securities act of any
state, or any other statute or common law or
otherwise, arising out of the sale to NextTraffic by
MegaMedia of any of such securities in a manner
contrary to the representations set forth herein.
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iii. Any claim, suit, obligation, liability, loss, damage,
injury or expense, arising out of, connected with,
related to, or resulting from any breach of any
covenant, representation, warranty or agreement made
by MegaMedia in this Agreement.
iv. All actions, suits, proceedings, demands,
assessments, judgment, costs and expenses incident to
any of the foregoing to include, without limitation,
attorney's fees and costs for all proceedings, trials
and appeals, whether incurred before, during or after
trial or appeal.
v. MegaMedia shall reimburse NextTraffic on demand for
any payment made by it at any time in respect of any
liability, obligation or claim to which the foregoing
indemnity relates. Should any claim covered by the
foregoing indemnity be asserted against NextTraffic,
NextTraffic shall notify MegaMedia promptly and give
it an opportunity to defend the same, and NextTraffic
shall extend reasonable cooperation to MegaMedia in
connection with such defense. In the event that
MegaMedia fails to defend the same within a
reasonable time, NextTraffic shall be entitled to
assume the defense thereof, and MegaMedia shall be
liable to repay NextTraffic for all its expenses
reasonably incurred in connection with the defense
(including reasonable attorneys' fees and settlement
payments).
vi. In the event MegaMedia does not reimburse NextTraffic
as set forth above, then NextTraffic shall have a
right to set off the amount of such liability,
obligation or claim, including NextTraffic's other
expenses as set forth above, against monies due
MegaMedia by virtue of this or any other Agreement
between NextTraffic and MegaMedia, such amounts being
applied first to the next payment due and to each
payment due thereafter until such amount is repaid to
NextTraffic in full.
10. MISCELLANEOUS.
A. Complete Agreement. These Agreement constitutes the complete
and exclusive statement of agreement among the parties with
respect to the subject matter described. This Agreement
replaces and supersedes all prior agreements, as to the
subject matter of this Agreement, by and among the parties or
any of them and no representation, statement, or condition or
warranty not contained in this Agreement is binding on any
party hereto or has any force or effect whatsoever.
B. Venue and Governing Law. This Agreement and the rights of the
parties hereunder are governed by, interpreted, and enforced
in accordance with the laws of the State of Florida and the
parties agree that venue for any action arising out of this
agreement or the subject matter of this agreement, is
restricted to Orange County Circuit, Florida, or the U.S.
District Court for the Middle District of Florida, Orlando
Division.
C. Terms. Common nouns and pronouns refer to the singular and
plural, identity of the person or persons, firm or corporation
as the context requires. Any reference to the Code,
Regulations or other statutes or laws will include all
amendments, modifications, or replacements of the specific
sections and provisions concerned.
D. Headings. All headings herein are inserted only for
convenience and ease of reference and are not to be considered
in the construction or interpretation of any provision of this
Agreement.
E. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under the present or future
laws effective during the term of this Agreement, such
provision is fully severable; this Agreement is to be
construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by
the illegal, invalid, or unenforceable provision; there will
be added automatically as a part of this Agreement a provision
as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and
enforceable.
F. Multiple Counterparts. This Agreement may be executed in
several counterparts, each of which is deemed an original but
all of which constitute one and the same instrument. However,
in making proof only one copy signed by the party to be
charged is required.
G. Additional Documents and Acts. Each party agrees to execute
and deliver additional documents and instruments and to
perform all additional acts necessary or appropriate to
effectuate, carry out and perform all of the terms,
provisions, and conditions of this Agreement and the
transactions contemplated hereby.
H. No Third Party Beneficiary. This Agreement is made solely and
specifically among and for the benefit of the parties hereto,
and their respective successors and assigns subject to the
express provisions hereof
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relating to successors and assigns, and no other person has or
will have any rights, interest, or claims hereunder or be
entitled to any benefits under or on account of this Agreement
as a third party beneficiary or otherwise.
I. Amendments. All amendments to this Agreement must be in
writing and signed by all the parties.
J. Notices. Any notice to be given or to be served on any party
hereto in connection with this Agreement must be in writing
and is deemed to have been given and received when deposited
in the U.S. mail, addressed specified by the party to receive
the notice.
As to MegaMedia: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
As to NextTraffic:
Any party may at any time, designate any other address in
substitution of the foregoing address to which such notice
will be given by giving written notice to the other party at
least (15) days prior to the date of delivery of the notice.
K. Reliance on Authority of Person Signing Regulations. In the
event that a party is not a natural person, no other party
will (a) be required to determine the authority of the
individual signing this Agreement to make any commitment or
undertaking on behalf of such Entity or to determine any fact
or circumstance bearing on the existence of the authority of
such individual or (b) be required to see to the application
or distribution of proceeds paid or credited to individuals
signing this Agreement on behalf of such Entity.
L. Attorney's Fees. In the event it shall be necessary for any
party to seek court intervention in order to enforce or defend
its rights hereunder, the prevailing party in any such action
shall recover from the non-prevailing, party or parties, all
reasonable attorneys' fees, costs and expenses incurred
therein.
IN WITNESS WHEREOF, the undersigned have executed this Agreement, to be
effective as of the date last signed by all parties hereto.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 1/7/2000
------------------------------------ --------
MegaMedia Networks, Inc. Date
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1/7/2000
------------------------------------ --------
NextTraffic, Inc. Date
By ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
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