STANDARD TERMS AND CONDITIONS FOR MAGNETIC SERVICES
Last updated June 24, 2016
The following Magnetic Media Online, Inc. (“MAGNETIC”) Standard Terms and Conditions (“Standard Terms”) are incorporated by reference into the Service Agreement by and between MAGNETIC and the Customer named therein. The Service Agreement and Standard Terms are referred to collectively herein as the “Agreement.” Unless otherwise defined, capitalized terms used herein shall have the same meaning ascribed to them in the Service Agreement.
1. BACKGROUND. MAGNETIC has developed and markets a web-based service that enables its customers to capture and respond to consumer preferences for products sold through internet and mobile store fronts and other communications such as emails. Under the terms and conditions of the Agreement, Customer wishes to subscribe to the MAGNETIC Service(s) specified in the Service Agreement, and MAGNETIC desires to make the MAGNETIC Service(s) available to Customer.
2. CERTAIN DEFINITIONS.
2.1 “Confidential Information” shall mean information disclosed in writing or orally that is clearly identified as confidential or proprietary, or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure. Confidential Information may include, but is not limited to, information concerning inventions, technical developments, confidential know-how, and trade secrets as may be necessary to further the performance of the Agreement. All Confidential Information shall remain the sole property of the disclosing Party, and the receiving Party shall have no interest in or rights with respect thereto except as expressly set forth in the Agreement.
2.2 “Consumer” means an individual who has interacted with the MAGNETIC Service(s) through the Customer Website(s), Customer Mobile Website(s), or by other means.
2.3 “Documentation” means the technical materials provided by MAGNETIC to Customer describing the use and operation of the MAGNETIC Service(s), including any technical manuals, but excluding any sales, advertising or marketing materials or proposals.
2.4 “Intellectual Property Rights” means any and all rights, titles and interests, whether foreign or domestic, in and to any and all trade secrets, patents, copyrights, service marks, trademarks, know-how, or similar intellectual property rights, as well as any and all moral rights, rights of privacy, publicity and similar rights of any type under the laws or regulations of any governmental, regulatory, or judicial authority, foreign or domestic.
2.5 “MAGNETIC Service(s)” means MAGNETIC’s web-based and mobile service(s) as described and ordered in the Service Agreement.
3. SERVICE USE AND RESTRICTIONS
3.1 Right to Use. Subject to the terms and conditions of the Agreement, MAGNETIC hereby grants to Customer during the Term a non-exclusive, non-transferable license, without the right to grant or authorize sublicenses, to access and use the MAGNETIC Service(s) solely for its own internal business purposes. All rights not expressly granted to Customer are reserved to MAGNETIC.
3.2 Ownership. MAGNETIC alone (and its suppliers, where applicable) shall own all right, title, and interest, including all Intellectual Property Rights, in and to (a) the MAGNETIC Service(s), (b) any suggestions, enhancement requests, recommendations, or other feedback provided by Customer relating to the MAGNETIC Service(s), and (c) all derivative works of and improvements made by MAGNETIC to any of the foregoing (collectively, (a), (b) and (c) are the “MAGNETIC IP”). This Agreement is not a sale of, and does not convey any rights of ownership in or to, the MAGNETIC IP.
3.3 Restrictions on Use. Customer acknowledges that the MAGNETIC Service(s), the structure, organization and underlying software (in object and source code) of the foregoing, and the selection, compilation, and analysis of all data in the MAGNETIC Service(s) constitute valuable trade secrets of MAGNETIC. Customer shall not (a) use the MAGNETIC Service(s) or Documentation except as specified in the Agreement; (b) cause or permit the decompiling, disassembly, or reverse engineering of any portion of the MAGNETIC Service(s) or attempt to discover any source code or underlying ideas or algorithms of the MAGNETIC Service(s); (c) sublicense, rent, lease, loan or otherwise distribute the MAGNETIC Service(s); (d) transport, export, or re-export the MAGNETIC Service(s), in whole or in part; or (e) access the MAGNETIC Service(s) in order to build a competitive product or service.
4. Service Levels. MAGNETIC shall provide the MAGNETIC Service(s) to Customer according to the service levels specified below (“Service Levels”).
4.1 Availability Service Level. The MAGNETIC Service(s) shall be available ninety-nine and nine tenths percent (99.9%) of the time, measured as a percent of the total number of hours during a given month of the Term.
4.2 Service Level Credits. In the event of MAGNETIC’s failure to make the MAGNETIC Service(s) available in accordance with Section 4.1 of the Standard terms (each a “Service Level Default”), Customer shall accrue service level credits (“Service Level Credits”) based on the following metrics:
4.3 Exceptions to Service Levels. Any period during which the MAGNETIC Service(s) are not available as a result of the occurrence of one or more of the conditions set out in this Section shall not constitute a Service Level Default: (a) Consumer error in signing up; (b) any event directly related to un-scheduled loss of or degradation of power; (c) attacks (i.e. hacks, denial of service attacks, viruses) by third parties, and other similar acts not within MAGNETIC’s control; (d) the occurrence of a Force Majeure Event (as defined below); (e) any failure by Customer to meet its responsibilities or obligations under the Agreement or any failure by Customer to make a Customer Website(s) or Customer Mobile Website(s) publicly available; and/or (f) the existence of a Maintenance Window. The term “Maintenance Window” shall mean any period of time, as notified to Customer from time to time, during which MAGNETIC may perform routine, emergency, and non-emergency maintenance services on the hardware and software related to the MAGNETIC Service(s).
4.4 Remedy. As Customer’s sole and exclusive remedy and MAGNETIC’s sole liability for any Service Level Default, MAGNETIC shall offset against the Service Fees payable by Customer for any affected Customer Website or Customer Mobile Website in the month following the month in which the applicable Service Level Default occurred, the aggregate amount of any Service Level Credits resulting from such Service Level Defaults, or if the Service Level Default occurs during the final month of the Term, MAGNETIC shall pay the amount of any resulting Service Level Credit within forty-five (45) days after the last day of the Term. In addition to the foregoing, in the event of any two (2) consecutive months in which the cumulative period of time during which any MAGNETIC Service is not available for more than one hundred-twenty (120) hours, Customer shall have the right to terminate the Agreement, effective immediately upon written notice to MAGNETIC.
5. CUSTOMER OBLIGATIONS.
5.1 Implementation. Upon execution of the Service Agreement, Customer agrees to implement the MAGNETIC Service(s) for use with the Customer Website(s) and the Customer Mobile Website(s) as specified in the Service Agreement, including, but not limited to, the inclusion of web beacons on the Customer Website(s) and Customer Mobile Website(s) and the utilization of industry standard methods for identifying and recording Consumer purchases as necessary to calculate the payment obligations set forth in the Agreement.
5.2 No Competitive Services. Customer agrees that during the Term, Customer will not enter into an agreement with a third party to receive services that could reasonably be considered directly competitive with the MAGNETIC Service(s).
5.4 Reference Customer. Customer agrees that it may be a reference customer of MAGNETIC and that MAGNETIC may use Customer’s name, logos, service marks, or other designation (collectively “Customer Marks”) and may disclose in its advertising, promotions, website, and similar public disclosures with respect to the MAGNETIC Service(s) that Customer is a customer of MAGNETIC. Customer and MAGNETIC shall mutually agree on additional activities to inform third parties about the MAGNETIC Service(s). Customer hereby grants to MAGNETIC a non-exclusive, worldwide license to use, publicly display and perform, reproduce, and distribute the Customer Marks, solely as permitted in this Agreement, including, but not limited to, distributing e-mails to Consumers that are branded with the Customer Marks. MAGNETIC acknowledges and agrees that all rights in and to such trademarks, trade names, and service marks are exclusively owned by Customer.
6. FEES AND PAYMENT; RECORDS AND AUDIT
6.1 Fees and Payment. Customer shall pay to MAGNETIC the Service Fees set forth in the Service Agreement. Except as otherwise provided in the Service Agreement, (a) all fees and charges are due and payable to MAGNETIC within thirty (30) days after the date of MAGNETIC’s invoice and (b) payment obligations are non-cancelable and Service Fees paid are non-refundable. All fees are exclusive of all applicable sales, use, value-added, and other taxes, and all applicable duties, tariffs, export and import fees, or other similar charges (“Taxes”), and Customer shall be responsible for payment of all such Taxes (other than taxes based on MAGNETIC’s income) and any related penalties and interest, arising from the payment of the fees or the delivery of the MAGNETIC Service(s) to Customer. At MAGNETIC’s discretion, any amounts not paid when due shall bear interest at a nominal rate of one and one half percent (1.5%) per month, or the maximum legal rate if less. MAGNETIC shall be entitled to withhold performance and discontinue provision of the MAGNETIC Service(s) and other services until all amounts due are paid in full.
6.2 Expenses. Any travel or other out-of-pocket expenses reasonably incurred by MAGNETIC for travel requested by Customer shall be itemized by MAGNETIC on an invoice and shall be paid by Customer; provided, however, MAGNETIC shall obtain Customer’s prior written approval for any expenditure in excess of $500.
6.3 Records and Audit. Customer shall keep complete and accurate records relating to all activities and amounts due relating to the Agreement for the period specified herein. MAGNETIC has the right, during normal business hours and upon at least ten (10) business days prior notice to inspect Customer’s records and conduct one or more audits (including use of a third-party at MAGNETIC’s discretion) of Customer’s records relating to performance and amounts due pursuant to the Agreement. Any such audit will be conducted at MAGNETIC’s expense, unless the audit reveals that Customer has misreported or underpaid fees or amounts owed by an amount of 5% or more over any one month period, in which case Customer shall reimburse MAGNETIC for the costs and expenses incurred by MAGNETIC in connection with such audit. Customer shall promptly reimburse to MAGNETIC any amounts shown by any such audit to have been underpaid, plus interest at the rate of 1.5% per month or the maximum rate permitted by applicable law, whichever is less. Customer’s obligations and MAGNETIC’s rights under this section will survive the termination of the Agreement for three (3) years.
7. WARRANTIES AND DISCLAIMERS
7.1 Limited Warranty. During the Term, MAGNETIC warrants to Customer that the MAGNETIC Service(s), when used in accordance with the Agreement, will operate in conformance with the Documentation. If Customer reports to MAGNETIC any failure of a MAGNETIC Service to conform to the foregoing warranty, and provides to MAGNETIC such detailed information as MAGNETIC may reasonably require to permit MAGNETIC to reproduce such non-conformity, then as Customer’s sole and exclusive remedy and MAGNETIC’s sole liability, MAGNETIC shall use commercially reasonable efforts to correct such failure.
7.2 Disclaimer. THE LIMITED WARRANTY SET FORTH ABOVE IS MADE FOR THE EXPRESS BENEFIT OF CUSTOMER ONLY. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE MAGNETIC SERVICE(S) IS/ARE PROVIDED “AS IS,” AND MAGNETIC MAKES NO (AND HEREBY DISCLAIMS ALL) OTHER WARRANTIES, REPRESENTATIONS, OR CONDITIONS, WHETHER WRITTEN, ORAL, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, MAGNETIC DOES NOT WARRANT THAT ALL ERRORS CAN BE CORRECTED, OR THAT OPERATION OF MAGNETIC SERVICE(S) SHALL BE UNINTERRUPTED OR ERROR-FREE.
8. LIMITATION OF LIABILITY.
8.1 Exclusion of Consequential and Related Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, COVER, OR CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES OR COSTS DUE TO BUSINESS INTERRUPTION OR LOSS OF PROFITS, DATA, USE OR GOODWILL, HOWEVER CAUSED, WHETHER IN CONTRACT OR TORT OR UNDER ANY OTHER THEORY OF LIABILITY, AND WHETHER OR NOT A PARTY HAS BEEN NOTIFIED OF THE LIKELIHOOD OF SUCH DAMAGES. FURTHER, IN NO EVENT SHALL MAGNETIC BE LIABLE FOR PROCUREMENT COSTS OF SUBSTITUTE PRODUCTS OR SERVICES.
8.2 Amount of Damages. THE MAXIMUM LIABILITY OF EITHER PARTY ARISING OUT OF OR IN ANY WAY CONNECTED TO THE AGREEMENT (WHETHER IN CONTRACT OR TORT OR UNDER ANY OTHER THEORY OF LIABILITY) SHALL NOT EXCEED THE FEES PAID, AND OWED IF UNPAID, BY CUSTOMER TO MAGNETIC DURING THE SIX (6) MONTHS PRECEDING THE CLAIM. The existence of one or more claims under the Agreement shall not increase A PARTY’S liability. THE FOREGOING SHALL NOT LIMIT CUSTOMER’S PAYMENT OBLIGATIONS UNDER THE AGREEMENT.
8.3 Basis of the Bargain. The Parties agree that the limitations of liability set forth in the preceding sections shall survive and continue in full force and effect despite any failure of consideration or of an exclusive remedy. The Parties acknowledge that the prices have been set and the Agreement has been entered into in reliance upon these limitations of liability and that all such limitations form an essential basis of the bargain between the Parties.
9.1.1. No Disclosure. In the course of performing the Agreement, the Parties may disclose to each other Confidential Information. Each Party agrees: (a) not to use any Confidential Information of the other Party for any purpose except in the performance of its obligations under the Agreement or as otherwise expressly permitted hereunder; (b) to disclose such Confidential Information only to employees (or third party contractors) who have a need to know such Confidential Information for purposes of the Agreement and who are under a duty of confidentiality no less restrictive than that set forth herein; and (c) to protect such Confidential Information from unauthorized use, access or disclosure in the same manner that it protects its own similar Confidential Information, but in no event with less care than a reasonably prudent business would exercise.
9.1.2. Exceptions. The foregoing restrictions on disclosure shall not apply with respect to any information that: (a) was or becomes generally known or publicly available through no act or failure to act on the part of the receiving Party; (b) is known by the receiving Party without restrictions on disclosure at the time of receiving such information as evidenced by its records; (c) is rightfully furnished to the receiving Party without restrictions on disclosure by a third party without a breach of such third party’s obligations of confidentiality; or (d) is required by law to be disclosed by the receiving Party, provided that the receiving Party (x) gives the disclosing Party prompt written notice of such requirement prior to such disclosure, (y) provides assistance in obtaining an order protecting Confidential Information from disclosure, and (z) discloses information only to the extent required by law. The Parties agree that the MAGNETIC Service(s), including information generated or produced by the MAGNETIC Service(s), and all other materials provided by MAGNETIC hereunder, including, but not limited to, all manuals, reports, records, programs, data, and other materials, and all Intellectual Property Rights in each of the foregoing shall be the exclusive property of MAGNETIC and its suppliers.
9.2 MAGNETIC Service Information. MAGNETIC shall not disclose to third parties information gathered through the MAGNETIC Service(s) that is identifiable as relating to a specific individual consumer except as may be required by law or for the operation or improvement of MAGNETIC Service(s). Consistent with that commitment, MAGNETIC shall not sell, rent, or trade to any third party any individually identifiable personal information of Customer’s Consumers (including, but not limited to, email addresses) gathered by MAGNETIC pursuant to the Agreement. All aggregate data collected through MAGNETIC Service(s) under the Agreement shall be owned jointly by Customer and MAGNETIC, and either Party may freely use, disclose, and share such data to the extent the data is not individually identifiable by Consumer or, in the case of MAGNETIC, identified as relating specifically to Customer’s business.
10.1 By MAGNETIC.
10.1.1 Indemnity. MAGNETIC shall defend at its expense any suit brought against Customer and shall pay any settlement MAGNETIC makes or approves or any damages finally awarded in such suit insofar as such suit is based on a claim by any third party alleging that the MAGNETIC Service misappropriates any trade secrets or infringes any copyright, trademark or United States patent issued as of the Effective Date.
10.1.2 Remedy. If any portion of a MAGNETIC Service becomes, or in MAGNETIC’s opinion is likely to become, the subject of a claim of infringement, MAGNETIC may, at MAGNETIC’s option: (a) procure for Customer the right to continue using the MAGNETIC Service; (b) replace the MAGNETIC Service with non-infringing services; (c) modify the MAGNETIC Service so that it becomes non-infringing; or (d) terminate the Agreement for the remainder of the Term then in effect, and upon such termination, Customer shall immediately cease all use of the MAGNETIC Service. Notwithstanding the foregoing, MAGNETIC shall have no obligation under this Section or otherwise with respect to any infringement claim based upon (x) any use of the MAGNETIC Service not in accordance with the Agreement or as specified in the Documentation; (y) any use of the MAGNETIC Service in combination with other products, equipment, software, or data not supplied by MAGNETIC (except as otherwise authorized in the Documentation); or (z) any modification of the MAGNETIC Service by any person other than MAGNETIC or its authorized agents. This Section states the sole and exclusive remedy of Customer and the entire liability of MAGNETIC for infringement claims and actions.
10.2 By Customer. Customer shall defend at its expense any suit brought against MAGNETIC and shall pay any settlement Customer makes or approves or any damages finally awarded in such suit insofar as such suit is based on a claim by any third party arising from or relating to (a) a claim alleging that any Customer Mark (or MAGNETIC’s use thereof) or the Customer Website(s) or Customer Mobile Website(s) (or any Consumer’s user thereof) violates or misappropriates the Intellectual Property Right of any third party to the extent such claim or suit is unrelated to a breach by MAGNETIC of this Agreement, (b) any claim arising from or relating to any communication or transaction between Customer and any Consumer, and (c) the breach by Customer of Customer’s privacy policies or any local, state, federal, or international law directly attributable to Consumer information provided by Customer.
10.3 Indemnification Claim Procedures. For a claim of indemnification to be effective, the claiming Party shall (a) promptly notify the indemnifying Party in writing of any threatened or actual claim or suit and (b) reasonably cooperate with the indemnifying Party to facilitate the settlement or defense of any claim or suit. The indemnifying Party shall have sole control of the defense or settlement of any claim or suit, provided that the indemnified Party, at its option and expense, may participate and appear on an equal footing with the indemnifying Party.
11. TERMINATION AND SUSPENSION.
11.1 Termination. Either Party may terminate the Agreement immediately upon notice to the other Party if the other Party (a) materially breaches the Agreement, and such breach remains uncured more than thirty (30) days after receipt of written notice of such breach, or (b) if the Party becomes the subject of a petition in bankruptcy or any other proceeding relating to insolvency, receivership, liquidation, or assignment for benefit of creditors.
11.2 Suspension. MAGNETIC may suspend or terminate Customer’s access to the MAGNETIC Service(s) at any time without prior notice in order to: (i) prevent damages to, or degradation of, MAGNETIC’s Internet network integrity; (ii) comply with any law, regulation, court order, or other governmental request or order which requires immediate action; or (iii) otherwise protect MAGNETIC from potential legal liability resulting from Customer’s use of or access to the MAGNETIC Service(s). MAGNETIC shall use commercially reasonable efforts to notify Customer of the reason(s) for the suspension/termination action as soon as reasonably practicable after any action. If suspended, MAGNETIC shall promptly restore use of the MAGNETIC Service(s) to the Customer as soon as the event giving rise to the suspension has been resolved to MAGNETIC’s reasonable satisfaction.
11.3 Effect of Termination/Suspension. Upon suspension or termination of the Agreement for any reason all rights and obligations of both Parties, including all licenses granted hereunder, shall immediately terminate. Any and all obligations of either Party that have accrued prior to expiration or termination of the Agreement shall survive expiration or termination of the Agreement for any reason. In no event shall any termination or expiration relieve Customer of the obligation to pay any fees or amounts owed to MAGNETIC.
12.1 Amendment. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom the modification, amendment, or waiver is to be asserted.
12.2 Compliance With Laws. Customer shall comply with all applicable export and import control laws and regulations in its use of the MAGNETIC Service(s). Customer shall defend, indemnify, and hold harmless MAGNETIC from and against any violation of such laws or regulations by Customer or any of its agents, officers, directors, or employees.
12.3 Assignment. Customer may not assign or transfer, by operation of law or otherwise, any of its rights under the Agreement to any third party; provided, however, Customer may, without MAGNETIC’s prior written consent, assign this Agreement in its entirety in connection with a change in control, merger, acquisition, or sale of all or substantially all of its assets not involving a direct competitor of MAGNETIC. In the event of a permitted transfer, this Agreement shall bind and inure to the benefit of the Parties, their respective successor, and permitted assigns.
12.4 Counterparts. The Agreement may be executed in counterparts, each of which will be considered an original, but all of which together shall constitute the same instrument. Execution and delivery of the Service Agreement may be evidenced by facsimile or PDF (Portable Document Format) and shall hold the same force and effect as an original signature for purposes of binding the Parties.
12.5 Force Majeure. Any delay in the performance of any duties or obligations of either Party will not be considered a breach of the Agreement if such delay is caused by a labor dispute, market shortage of materials, fire, earthquake, flood or any other event beyond the control of such Party (a “Force Majeure Event”), provided that such Party uses reasonable efforts, under the circumstances, to resume performance as soon as reasonably practicable.
12.6 Notices. Any notice required or permitted hereunder must be in writing and shall be deemed to have been given upon (a) delivery in person, (b) three (3) business days after posting by registered mail, (c) one (1) day after delivery to an overnight courier, and (d) the moment of transmission by facsimile.
12.7 Governing Law. The Agreement will be governed by the laws of the State of California without regard to conflict of laws principles which require application of the laws of a different state. The United Nations Convention on Contracts for the International Sale of Goods does not apply to the Agreement.
12.8 Waiver of Jury Trial; Attorney Fees. Each Party waives any right to jury trial in connection with any action or litigation in any way arising out of or related to the Agreement. Customer shall pay on demand all of MAGNETIC’s reasonable attorney fees and other costs incurred by MAGNETIC to collect any fees or charges due MAGNETIC under this Agreement following Customer’s breach of its payment obligations hereunder.
12.9 Independent Contractors. The Parties hereto are independent contractors under the Agreement, which shall not be construed to create any partnership, joint venture, franchisor-franchisee, or agency relationship between the Parties.
12.10 Severability; Waiver. If any provision of the Agreement is found by a court of competent jurisdiction to be unenforceable or invalid, that provision shall be changed and interpreted to accomplish the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions shall remain in full force and effect. No failure to exercise, and no delay in exercising any right hereunder shall operate as a waiver thereof, nor will any single or partial exercise of any right hereunder preclude further exercise of any right hereunder.