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Terms: PHUNZONE AFFILIATE AGREEMENT This Agreement contains the complete terms and conditions which you (the "Affiliate") agree to be bound by as a participant in Phunzone’s ("Phunzone") affiliate program (the "Program") and which shall apply once your application to participate in the Program has been accepted by Phunzone. 1. INTRODUCTION 1.1 Phunzone is the sole and exclusive owner of all right, title and interest including all intellectual property rights in and to the contents, logos, style, design, look and feel, trade names, trademarks such as but not limited to Phunzone.. 1.2 If in the future Phunzone sells and distributes any other goods or services through the Internet, it shall offer to its affiliates at that time the opportunity to become vendor-affiliates of such goods or services. Such goods or services shall be included in the defined term "Product" and this Agreement shall then also apply to such goods or services. 2. PARTICIPATION & REPRESENTATION 2.1 Phunzone hereby grants to the Affiliate the non-exclusive and revocable right to market and advertise the Product and to establish links to Phunzone’s Web site, the whole in accordance with this Agreement. 2.2 The Affiliate shall diligently and continuously market and advertise the Product through the Internet and shall develop, operate and maintain links from its site to Phunzone’s site at its sole cost and expense. 2.3 The Affiliate represents and warrants to Phunzone that this Agreement has been duly and validly executed and constitutes and shall continue to constitute a legal obligation, enforceable in accordance with its terms. 3. AFFILIATE SALES COMMISSIONS 3.1 If, as a result of a direct advertising effort of the Affiliate, a referred customer of the Affiliate orders and pays for the Product sold by Phunzone in the future, Phunzone shall pay the Affiliate a sales commission determined in accordance with the Affiliate Compensation Schedule which follows this Agreement and which forms an integral part of it. The commission is based upon the paid selling price of the purchased Product before tax and shipping and returns ("Sales Commission"). 3.2 The Affiliate shall be responsible for all taxes and other similar levies applicable to the Sales Commission pursuant to any law or regulation. The Affiliate shall report the Sales Commission to its taxation authorities as required by law. 3.3 Phunzone shall post and maintain, on a current basis, a designated password-protected Web page for each Affiliate showing the Affiliate's participation in the Program including number of potential customers referred by it and an estimate of the Sales Commission owing to it. Phunzone shall, on or about the 15th of each month, mail or otherwise transmit the Sales Commission representing the amount payable for the sales completed in the previous month. Sales statistics of the referred transactions, supporting the amount paid, shall be made available Phunzone on the Affiliate's private site. Affiliates shall receive the Sales Commission in US funds. If an Affiliate maintains a balance of less than $50 dollars of Sales Commission in a period of 12 consecutive months without asking for payment during that time, the Sales Commission shall be forfeited. Sales Commission overpayments may be deducted from future payments or shall be reimbursed by the Affiliate. 3.4 Upon written request and at the Affiliate's expense, the Affiliate may cause Phunzone’s books and records to be examined by an independent firm of chartered accountants to ensure compliance with this Agreement. If the examination does not reveal an underpayment , the Affiliate shall compensate Phunzone for its reasonable cost to a maximum of $5,000 US dollars. The firm of chartered accountants utilized shall limit the scope of their examination to the relevant information regarding the Sales Commission and shall keep private and confidential all information obtained in the course of the said examination. 4. AFFILIATE SITES AND PROMOTION METHODS 4.1 The Affiliate shall be solely responsible for all materials that appear on its site. It shall strictly adhere to all applicable laws and regulations in conducting its business and more specifically in marketing and advertising the Product. Without restricting the generality of the foregoing, the Affiliate shall not violate the intellectual property rights of others (eg., copyright, trademark, etc.), nor send unsolicited e-mail and shall not send e-mail or any other communication to a recipient if the recipient has requested that it discontinue such communication, nor shall it send or display on its Web site any material that may be considered to be harassing, libelous, defamatory, legally obscene or pornographic, threatening, abusive or hateful, nor shall the Affiliate do anything that may be considered (by Phunzone in its sole judgment) as detrimental to Phunzone's reputation. 4.2 Phunzone shall have the right, but not the obligation, to pre-approve the graphics and logos used on any Web site which is linked to its site. Furthermore, the Affiliate shall annotate its site with appropriate copyright, trademark and other similar notices, which shall be approved by Phunzone. If the Affiliate specifies a price point for the Product in its marketing and advertising, it shall ensure that it is updated regularly to reflect all price changes. 4.3 Phunzone shall have the right to monitor the Affiliate's Web site at any time and from time to time to determine if it is in compliance with the terms and conditions on this Agreement. 4.4 The Affiliate agrees not to use any predatory advertising methods designed to generate traffic from sites that they have not contracted with in the online promotion of Phunzone's Product or affiliate program. Predatory advertising is defined as any method that creates or overlays links or banners on web sites, spawns browser windows, or any method invented to generate traffic from a web site without that web site owner's, knowledge, permission, and participation. Examples include, but are not limited to, keyword parsing browser plugins, banner replacement technology, and browser spawning technology that is not web site dependent. Participation in predatory advertising programs will be cause for the affiliate's immediate termination, with loss of any amounts owing. 5. ORDER PROCESSING 5.1 Phunzone shall establish the procedures of selling the Product including, without limitation, the placement of orders, pricing, payment terms, processing, delivery, returns etc. Without restricting the generality of the foregoing, Phunzone shall have the right to cancel, suspend or delay any order for the Product, including the right to discontinue to sell the Product at any time. 6. LICENSES AND GOODWILL PRESERVATION 6.1 Phunzone shall have the right, but not the obligation, to approve, in its sole and absolute discretion and with due regard to the protection and preservation of the goodwill of the Product any promotional, advertising or marketing item used by the Affiliate. The Affiliate shall make all deletions and modifications suggested by Phunzone on any site where the Product is mentioned. 6.2 The Affiliate shall acknowledge and clearly identify and respect that all proprietary information, trademarks, copyrights and all other similar rights in and arising out of the Product are, and shall continue to be, the exclusive property of Phunzone. In the event the Affiliate learns of any claim or allegation that the Product infringes upon or violates any intellectual property or proprietary rights of a third party, or contains any unlawful, libelous, or untrue statement, it shall immediately notify Phunzone so as to enable Phunzone to defend, settle or otherwise resolve the claim or allegation in a manner that Phunzone deems appropriate in its sole discretion. 6.3 Customers who purchase the Product through the Program shall be deemed to be customers of Phunzone, and the Affiliate shall refer all Product-related questions, requests or queries to Phunzone 6.4 Phunzone shall have the right to utilize the Affiliate's name and logo to advertise, market, promote and publicize the Product in any manner. 6.5 The Affiliate shall not make or give to a customer or a potential customer any warranty, representation or other statement concerning the Product without first obtaining the written consent of Phunzone, Relevant information on the Product, including warranty and returns statements are on the Phunzone website 7. RELATIONSHIP OF PARTIES 7.1 While the parties shall work hand-in-hand for the benefit of both, the parties acknowledge and agree that the Affiliate shall, from a legal perspective, act as and shall be an independent contractor and not an employee or agent of Phunzone. Nothing in this Agreement shall create a partnership, joint venture, agency, or franchise between the parties in the legal sense of these terms. The Affiliate shall not sign any document in the name of or on behalf of Phunzone nor shall it hold itself out as being an agent of Phunzone or as having apparent authority to contract for or bind Phunzone 8. LIMITATION OF LIABILITY 8.1 In no event shall Phunzone be liable for special, incidental, consequential or punitive damages, including, without limitation, any damages resulting from loss of profits, loss of business or loss of goodwill arising out of or in connection with this Agreement or the Product, whether or not such party has been advised of the possibility of such damages. 8.2 Phunzone shall not be liable for any damages if, for any reason whatsoever, its Web site fails or is non-operational. 9. TERM OF THE AGREEMENT 9.1 In the event that the Affiliate breaches any of the undertakings or obligations set forth in this Agreement and does not remedy same within 7 days notice from Phunzone, it shall automatically forfeit the Sales Commission then receivable or receivable at any time in the future. Phunzone shall, in addition, have the right to terminate this Agreement and shall retain all other rights and remedies available to it at law or in equity. 9.2 Phunzone shall have the right but not the obligation to terminate this Agreement with an Affiliate who does not maintain a valid e-mail address with Phunzone (Phunzone tracks all bounced communications and automatically terminates any affiliate whose e-mail address is not valid). Phunzone shall have the right but not the obligation to terminate this Agreement if the Affiliate ceases to actively market the Product for a period of 90 days. 9.3 The Affiliate shall have the right to terminate this Agreement at any time upon written notice to Phunzone. 9.4 As soon as notice of termination of this Agreement is given or upon termination as herein provided, the Affiliate shall immediately cease its marketing and advertising of the Product and shall forthwith eliminate all mention and references to the Product and all links to Phunzone. Pending the completion of the foregoing, Phunzone may hold in abeyance the Sales Commission. 10 MODIFICATION AND APPLICATION OF AGREEMENT 10.1 Phunzone may, in good faith, modify any of the terms and conditions contained in this Agreement (including the Affiliate Compensation Schedule), at any time and in its sole discretion, by posting a change notice or a new agreement on its Web site. If any modification to this Agreement is not acceptable to the Affiliate, its only recourse is to terminate this Agreement. The Affiliate's continued participation in the Program following the said posting of a change notice or new agreement shall constitute binding acceptance by the Affiliate of the change. 10.2 If any of the provisions of this Agreement are determined by a court to be unenforceable, they shall be severed from this Agreement, and the remaining provisions shall remain in full force and effect. 10.3 The Affiliate shall not assign, transfer or convey this Agreement or any part thereof to any other party without Phunzone's consent which shall not be unreasonably refused. 10.4 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, legatees, executors, legal representatives, successors and assigns. 10.5 This Agreement represents the entire agreement between the parties and supersedes all prior negotiations, agreements and understandings, if any. For greater certainty but without restricting the aforementioned, information contained in any of the following shall not form part of this Agreement, namely: e-mail communications from Phunzone or from any of its employees, officers or directors; in the Product, or in marketing/informational documents. 11. INDEPENDENT INVESTIGATION 11.1 The Affiliate acknowledges that it has reviewed this Agreement and agrees to all its terms and conditions. The Affiliate has independently evaluated the desirability of participating in the Program and is not relying on any representation, guarantee or statement other than as set forth in this Agreement. 12. MISCELLANEOUS PROVISIONS 12.1 Any reference in this Agreement to gender includes all genders and words importing the singular number only shall include the plural and vice versa. 12.2 The insertion of headings and the division of this Agreement into Articles and Sections are for convenience reference only and are not to affect its interpretation. 12.3 Each of the parties hereto covenants and agrees that it shall execute and deliver such additional agreements and documents and do such acts and things as may be reasonably necessary fully and effectually to carry out the intent and purpose of this Agreement. 12.4 All notices, requests and other communications shall be deemed to have been received when posted by Phunzone on its Web site. It shall also be deemed to have been received on the next business day if transmitted by fax, e-mail or any other form of electronic mail to the last known electronic address of the intended recipient. 12.5 This Agreement shall be governed by and construed in accordance with the laws of Georgia and the applicable laws of the United States and all disputes concerning this Agreement and the obligations assumed by the parties shall be resolved before such courts. AFFILIATE COMPENSATION SCHEDULE The following Compensation Schedule is in effect: The Affiliate shall receive a commission of 2.5% of the net value of the Product as displayed on the Phunzone Web site. The net value does not include sales tax, shipping, installation or other related costs. The commission (of $50 or more) shall be mailed to the Affiliate on approximately the 15th of the month following the previous month(s) of sales which total at least $50
   


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