MODULAR MERCHANT TERMS OF SERVICE
version 2.0 - updated: 10/24/2004

This Terms of Service Agreement ("agreement") is entered into as of the date on which the client first uses the Modular Merchant services (as defined below) ("effective date") by and between Stepping Stone Media LLC, DBA: Modular Merchant ("Modular Merchant") and client ("client").

RECITALS

Whereas, Modular Merchant is a service provider that offers access to, and use of, certain applications including its fully integrated set of web-based modules ("Modular Merchant services") and implementation support to initiate such access and use.
Whereas, client wants to retain Modular Merchant to allow client to access and use the Modular Merchant services under the terms and conditions set forth in this agreement.
Now therefore, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, client and Modular Merchant agree to the foregoing and as follows:

ARTICLE 1 - GENERAL

1.1 Overview of Agreement.
This agreement represents the terms and conditions under which Modular Merchant shall provide client access to, and use of the Modular Merchant services package or packages subscribed to ("Modular Merchant services package"), which may be amended from time to time to reflect additional or amended Modular Merchant services ordered by client. Modular Merchant services shall be provided to client via the Internet’s world wide web. Additional services and/or deliverables may be procured consistent with the terms of this agreement. Any attempt to alter or amend the terms and conditions contained in this agreement through conflicting or inconsistent terms in any other document shall be void and of no force and effect.

ARTICLE 2 - MODULAR MERCHANT SERVICES

2.1 EQUIPMENT.
client will be responsible for procuring, at client's sole expense, all equipment or other software, if any, required to use Modular Merchant services.
2.2 ACCESS RIGHTS.
During the term of this agreement, client will have a limited, revocable, non-transferable and non-exclusive license for client’s employees ("authorized users") to use the Modular Merchant services package and related documentation solely for client's business purposes consistent with the terms and conditions of this agreement. Modular Merchant will issue to one authorized user ("Modular Merchant Account Administrator") an individual logon identifier and password ("administrator's logon") for purposes of administering the Modular Merchant services package. client acknowledges and agrees that only its Modular Merchant Account Administrator shall be authorized to bind client in connection with any service provided to client under this agreement. Using administrator's logon, the Modular Merchant Account Administrator shall assign each remaining authorized user a unique logon identifier and password and assign and manage the business rules that control each such authorized user's access to the Modular Merchant services package. client shall use its reasonable efforts to see that each authorized user will: (a) be responsible for the security and/or use of his or her logon identifier; (b) not disclose such logon identifier to any person or entity; (c) not permit any other person or entity to use his or her logon identifier; (d) use the Modular Merchant services package consistent with the assigned business rules; and (e) use the Modular Merchant services package in accordance with the terms and conditions of this agreement. client will be responsible for: (f) advising each authorized user of his or her obligations under this agreement and of the license restrictions set forth in this agreement; and (g) any and all costs and expenses incurred through the authorized use of client's logon. Modular Merchant reserves the right to deny, suspend or revoke access to the Modular Merchant services, in whole or in part, if Modular Merchant believes client and/or its authorized users are in breach of this agreement or are otherwise using or accessing the Modular Merchant services inconsistent with the terms and conditions of this agreement.
2.3 RESTRICTIONS.
client agrees that client and its authorized users will not: (a) sell, lease, license or sublicense the Modular Merchant services; (b) modify, change, alter, translate, create derivative works from, reverse engineer, disassemble or decompile the Modular Merchant services in any way for any reason; (c) provide, disclose, divulge or make available to, or permit use of the Modular Merchant services by, any third party; (d) copy or reproduce all or any part of the Modular Merchant services (except as expressly provided for herein); (e) interfere, or attempt to interfere, with the Modular Merchant services in any way; (f) engage in spamming, mail bombing, spoofing or any other fraudulent, illegal or unauthorized use of the Modular Merchant services; (g) knowingly introduce into or transmit through the Modular Merchant services any virus, worm, trap door, back door, timer, clock, counter or other limiting routine, instruction or design; (h) remove, obscure or alter any copyright notice, trademarks or other proprietary rights notices affixed to or contained within the Modular Merchant services; or (i) engage in or allow any action involving the Modular Merchant services that is inconsistent with the terms and conditions of this agreement.
2.4 AUDIT RIGHTS.
If a client has purchased the Modular Merchant software, Modular Merchant shall have the right, during the term of this agreement and for a period of six (6) months thereafter, upon reasonable notice and at reasonable times, to access client's location and files to inspect client's use of the Modular Merchant services package, as well as computers and equipment used in connection therewith. client shall cooperate fully with any such audit or inspection. In the event that any audit displays any misuse, violation or breach of the Modular Merchant services or this agreement, Modular Merchant shall be entitled to pursue any remedies available to it under this agreement or otherwise at law or in equity.
2.5 NON-EXCLUSIVITY.
The parties acknowledge and agree that Modular Merchant is providing access to and use of the Modular Merchant services to multiple clients and that such services are non-exclusive.
2.6 AVAILABILITY.
Modular Merchant shall use commercially reasonable efforts to keep the Modular Merchant services package available on a 24 hour a day, 7 day a week basis, subject to scheduled downtime for maintenance purposes, unscheduled maintenance and systems outages. The parties acknowledge that since the Internet is neither owned nor controlled by any one entity, Modular Merchant makes no guarantees that any given user will be able to access the Modular Merchant services package at any given time, and Modular Merchant shall not be liable to client for failure of accessibility to the Modular Merchant services package.
2.7 MODULAR MERCHANT'S LICENSORS.
2.7.1 TERMS AND CONDITIONS APPLICABLE TO SERVICES PROVIDED BY MODULAR MERCHANT’S LICENSORS.
client acknowledges and agrees that Modular Merchant services are provided, in some cases, by third party licensors to Modular Merchant (hereinafter "third party licensors"). For all Modular Merchant services contained in the Modular Merchant service package that are provided by third party licensors to Modular Merchant, client agrees with and shall abide by all third party licensor terms and conditions, if any. Such third party licensor terms and conditions are available upon request (the "additional terms and conditions"). Any additional terms and conditions are in addition to and supplement the terms and conditions provided in this agreement. client acknowledges and agrees that it will be subject to all additional terms and conditions and that all such additional terms and conditions shall be incorporated into the terms and conditions of this agreement as if set forth fully herein. client further agrees that it will be subject to all additional terms and conditions where client elects to add services to its Modular Merchant services package.
2.7.2 CHANGES TO MODULAR MERCHANT LICENSORS.
client acknowledges that Modular Merchant may, at its sole discretion, change any third party licensors that provide services under this agreement, or add or delete discrete services from the Modular Merchant services. Modular Merchant agrees to use reasonable efforts to prevent any service interruptions associated with Modular Merchant’s decision, if any, to change third party licensors. In the event that Modular Merchant changes third party licensors, Modular Merchant may provide client with notification of changes in third party licensors and refer client to information posted on Modular Merchant’s website relative to that change which shall become additional terms and conditions for the purposes of this agreement. In the event of such change, client shall be entitled to terminate this agreement immediately.

ARTICLE 3 - FEES; PAYMENT TERMS

3.1 APPLICATION AND USE FEE.
Client shall pay any applications fees, user fees, including but not limited to monthly fees, any taxes according to the Modular Merchant’s then-applicable fee schedule. client shall pay all amounts due under any invoice to Modular Merchant within thirty (30) calendar days of client's receipt of Modular Merchant's invoice.
3.2 LATE PAYMENTS.
If client fails to pay any fees by the applicable due date, Modular Merchant will have the right to: (a) assess late charges in an amount equal to the greater of five percent (5%) per month or the maximum allowable under applicable law; and/or (b) suspend access to any or all of the Modular Merchant services and/or performance of the services provided by Modular Merchant hereunder and/or terminate this agreement. Any such suspension or termination will not relieve client from paying any outstanding fees plus interest and late charges. client will be responsible for any costs associated with collecting such fees including, without limitation, legal costs, attorneys’ fees, court costs and collection agency fees.
3.3 TAXES.
Client will pay or reimburse Modular Merchant for all sales, use, transfer, privilege, excise and all other taxes and all duties, whether international, national, state or local, however designated, which are levied or imposed by reason of the performance by Modular Merchant under this agreement, excluding, however, income taxes or gross receipts taxes which may be levied against Modular Merchant. Such taxes may be reflected on client invoices.

ARTICLE 4 - LIMITED WARRANTIES

4.1 CLIENT WARRANTY.
Client represents and warrants to Modular Merchant that: (a) client has the authority to enter into this agreement and perform its obligations under this agreement; (b) client and its authorized users will only use the Modular Merchant services for lawful purposes and will not violate any law of any country or the intellectual property rights of any third party; and (c) client warrants that it is not located in a country where export or re-export of the contents of information received via the Internet is prohibited. Should client receive notice of any claim regarding the Modular Merchant services, client shall promptly provide Modular Merchant with a written notice of such claim.
4.2 MODULAR MERCHANT WARRANTY.
Modular Merchant warrants that: (a) Modular Merchant has the authority to enter into this agreement and perform its obligations under this agreement; and (b) Modular Merchant will perform the services required under this agreement in a professional and workmanlike manner.
4.3 DISCLAIMER.
Except as otherwise set forth herein, Modular Merchant makes no representations or warranties, whether express, implied or statutory regarding or relating to any of the services and/or access to or use of the Modular Merchant services provided to client under this agreement. Modular Merchant specifi¬cally disclaims any and all implied warranties of merchantability, fitness for a particular purpose and noninfringement.

ARTICLE 5 - LIMITATION OF LIABILITY

Modular Merchant’s liability under this agreement for any direct damages of any kind will not exceed an amount equal to the amount paid by client to Modular Merchant through the date Modular Merchant’s liability to client accrues. In no event shall Modular Merchant be liable for incidental or consequential damages or lost profits.

ARTICLE 6 - INDEMNIFICATION

Client agrees to indemnify, defend (at Modular Merchant's sole option and at client's sole expense) and hold harmless Modular Merchant, its managers, directors, officers, employees, independent contractors and agents, and defend any action brought against same with respect to any claim, demand, cause of action, debt or liability, including reasonable attorneys' fees, to the extent that such action is based upon a claim arising out of or relating to client's use of and/or access to the Modular Merchant services or services provided hereunder. Client specifically acknowledges that Modular Merchant shall not be liable to client for losses, if any, incurred as a result of fraudulent or unauthorized misuse of Modular Merchant services.

Modular Merchant agrees to indemnify, defend and hold harmless client, its directors, officers, employees and agents, and defend any action brought against same with respect to any claim, demand, cause of action, debt or liability, including reasonable attorneys’ fees, to the extent that such action is based upon a claim arising our of or relating to any infringement of a copyright, trademark, trade secret, patent or other intellectual property right of any third party as a result of client’s use of the Modular Merchant services in accordance with this agreement. Client agrees to furnish Modular Merchant with prompt notice of such infringement claim, whereupon client hereby authorizes Modular Merchant to defend such claim and agrees to cooperate and assist Modular Merchant fully in such defense, at Modular Merchant’s expense.

ARTICLE 7 - CONFIDENTIAL INFORMATION

"Confidential information" will include the terms of this agreement, any software provided by Modular Merchant under this agreement, the logon identifiers and/or passwords provided to client and each authorized user, the prices and fees charged under this agreement, any other materials marked confidential by client or Modular Merchant and any other information conveyed under this agreement that is identified in writing as confidential at the time of its conveyance. Each party acknowledges and agrees that: (a) the confidential information constitutes valuable trade secrets of the party owning such confidential information; (b) it will use confidential information solely in accordance with the provisions of this agreement; and (c) it will not disclose, or permit to be disclosed, the confidential information of the other party to any third party without the disclosing party's prior written consent. Each party will take all reasonable precautions necessary to safeguard the confidentiality of the other party's confidential information including, at a minimum, those precautions taken by a party to protect its own confidential information, which will in no event be less than a reasonable degree of care. Confidential information will not include information that is: (d) publicly available; (e) already in the other party's possession and not subject to a confidentiality obligation; (f) obtained by the other party from any source without any obligation of confidentiality; (g) independently developed by the other party without reference to the disclosing party's confidential information; or (h) required to be disclosed by order of a court or other governmental entity; provided no less than ten (10) days written notice is given to the party owning such confidential information so that such party may obtain a protective order or other equitable relief.

ARTICLE 8 - PROPRIETARY RIGHTS

No right (except for the license granted in section 2.2), title or interest of intellectual property or other proprietary rights in and to the Modular Merchant services and/or other products or services made available under this agreement is transferred to client hereunder. Modular Merchant and its third party licensors retain all right, title and interests, including, without limitation, all copyright, intellectual property and other proprietary rights in and to the Modular Merchant services and/or other products or services provided under this agreement. client will retain all right, title and interest to the documents created by client using the Modular Merchant services.

ARTICLE 9 - TERM AND TERMINATION

9.1 TERM.
This agreement will commence as of the effective date and shall continue thereafter on a month to month basis unless terminated pursuant to section 2.7.2, 9.2 or 9.3, or upon telephone notice to the Modular Merchant billing department. Any e-mail notice will be disregarded. Written notice may be mailed directly to Modular Merchant at:

1950 Franklin Blvd.
Box 27
Eugene, OR 97403

9.2 TERMINATION BY MODULAR MERCHANT.
Modular Merchant shall have the right, upon written notice to client, to terminate this agreement if: (a) client fails to timely pay Modular Merchant any amount due to Modular Merchant under this agreement; (b) client materially breaches any term or condition this agreement, provided such breach is not cured by client within thirty (30) calendar days following Modular Merchant's notice to client of such breach; or (c) client (i) terminates or suspends its business activities; (ii) becomes insolvent, makes an assignment for the benefit of creditors, or becomes subject to direct control of a trustee, receiver or similar authority; or (iii) becomes subject to any bankruptcy or insolvency proceeding under federal or state statutes.

9.3 TERMINATION BY CLIENT.
Client will have the right, upon written notice to Modular Merchant, to terminate this agreement if Modular Merchant is in material breach of this agreement and Modular Merchant fails to remedy such material breach within thirty (30) calendar days of its receipt of such written notice.

9.4 OBLIGATIONS UPON TERMINATION OR EXPIRATION AND NON-RENEWAL.
Upon the expiration and non-renewal or termination of this agreement for any reason: (a) client's access to, and use of, the Modular Merchant services will terminate; (b) client will return to Modular Merchant any and all Modular Merchant services, equipment, software, documentation or other deliverables provided to client by Modular Merchant including any copies thereof held by client; (c) Modular Merchant will deliver to client all client documents and other materials stored by client on the Modular Merchant network; and (d) each party shall return any and all confidential information in its possession to the party that disclosed such confidential information and provide written verification of same.

9.5 SURVIVAL.
Any provisions of this agreement that by their nature should survive termination of this agreement will survive termination of this agreement, including but not limited to section 2.4, and articles 6, 7, and 8.

ARTICLE 10 - MISCELLANEOUS

10.1 NOTICES.
Any written notice required or permitted to be delivered pursuant to this agreement will be in writing and will be deemed delivered: (a) upon delivery if delivered in person; (b) three (3) business days after deposit in the united states mail, registered or certified mail, return receipt requested, postage prepaid; (c) upon transmission if sent via telecopier, with a confirmation copy sent via overnight mail; (d) one (1) business day after deposit with a national overnight courier; (e) upon transmission if sent via e-mail with a telecopy sent the same day, in each case addressed, in the case of client, the address listed in Modular Merchant’s records, or in the case of Modular Merchant, to 1950 Franklin Blvd., Box 27, Eugene, Oregon 97403 (or to such other address as may be specified upon notice).

10.2 ASSIGNMENT.
Client will not assign or otherwise transfer this agreement, in whole or in part, nor delegate or subcontract any of its rights or obligations hereunder, without Modular Merchant's prior written consent, which consent may be withheld, delayed or conditioned in Modular Merchant’s discretion. Modular Merchant will have the right to assign this agreement, in whole or in part, to a third party at any time upon written notice to client.

10.3 FORCE MAJEURE.
Neither party shall have any liability to the other or to third parties for any failure or delay in performing any obligation under this agreement due to circumstances beyond its reasonable control including, without limitation, acts of God or nature, actions of the government, fires, floods, strikes, civil disturbances or terrorism, or power, communications, satellite or network failures.

10.4 WAIVER.
Any waiver or modification of this agreement will not be effective unless executed in writing and signed by an authorized representative of Modular Merchant and client. The parties expressly disclaim the right to claim the enforceability or effectiveness of: (a) any amendments to this agreement that are not executed by an authorized representative of Modular Merchant and client; (b) any oral modifications to this agreement; and (c) any other amendments that are based on course of dealing, waiver, reliance, estoppel or similar legal theory. The parties expressly disclaim the right to enforce any rule of law that is contrary to the terms of this section. The failure of either party to enforce, or the delay by either party in enforcing, any of its rights under this agreement will not be deemed to be a waiver or modification by such party of any of its rights under this agreement.

10.5 SEVERABILITY.
If any provision of this agreement is held to be unenforceable, in whole or in part, such holding will not affect the validity of the other provisions of this agreement, unless Modular Merchant in good faith deems the unenforceable provision to be essential, in which case Modular Merchant will have the right to terminate this agreement in accordance with section 10.2.

10.6 PUBLIC ANNOUNCEMENTS.
Client grants Modular Merchant the right to use client's name in press releases, product brochures and financial reports indicating that client is a client of Modular Merchant.

10.7 COUNTERPARTS.
This agreement may be executed in counterparts, each of which so executed will be deemed to be an original and such counterparts together will constitute one and the same agreement.

10.8 THIRD PARTY BENEFICIARIES.
Client acknowledges that some Modular Merchant services may be provided by third party licensors. Third party licensors are third party beneficiaries to this agreement, and there are no other third party beneficiaries to this agreement.

10.9 GOVERNING LAW; JURISDICTION; DISPUTE RESOLUTION WITH THIRD PARTY LICENSORS.
This agreement will be interpreted and construed in accordance with the laws of the state of Oregon, without regard to conflict of law principles. All disputes arising out of this agreement shall be brought only in the district and federal courts located in or for Lane County, Oregon. Each party consents to the exclusive personal jurisdiction and venue of the courts, state and federal, located in or for Lane County, Oregon.

10.10 NON-SOLICITATION.
Client acknowledges and agrees that the employees and consultants of Modular Merchant are a valuable asset to Modular Merchant and difficult to replace. Accordingly, client agrees that, during the term of this agreement and for a period of twelve (12) months after the expiration and non-renewal or termination of this agreement, client will not solicit or attempt to solicit any employee or consultant of Modular Merchant.

HEADINGS.
The headings used herein are for reference and convenience only and shall not enter into the interpretation hereof.

ENTIRE AGREEMENT.
This agreement contains the entire agreement of the parties with respect to the subject matter of this agreement and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the parties with respect to said subject matter.