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For an entity in the process of setting up an Internet exchange, it is important to establish a set of rules by which the marketplace will operate. Exchange rules typically address issues such as the site’s method of conducting transactions, the fees it charges, its hours of operation and other administrative details. Other topics typically covered by marketplace membership agreements include prohibitions against posting infringing information or viruses and using the site in connection with unlawful activity, provisions on ownership of intellectual property associated with the site and confidentiality and privacy requirements. Marketplace membership agreements also may address allocations of liability between the B2B entity and the marketplace members, indemnity obligations, warranties and related disclaimers, and termination and dispute resolution provisions. One of the central issues that marketplace rules address is how a transaction is effected and the ramifications of such transactions. The following language may be used to define the creation and characteristics of a transaction. * * * GENERAL RULES A Transaction is created within the Exchange when a Contract Confirmation is created. A Contract Confirmation is created when a Member agrees to the terms and conditions of an offer or counteroffer from another Member. A Transaction is binding on both Members under the terms contained in the Contract Confirmation and may not be unilaterally altered by any Member. All Transactions on the Exchange are confidential among the Buyer, Seller and the Company. Buyers and sellers determine which information, offers or inquiries to make available to which Members based on their own criteria. Sellers agree not to manipulate the prices of any products or services offered on the Exchange, either through the use of shills, aliases or decoys, or by acting as a Buyer in respect of such proposed sale. Certain activities on the Web Site incur a Transaction Fee payable to the company. The current Transaction Fees are set forth in the Transaction Fee Schedule, which may be amended from time to time as described in Section __ hereof. Member agrees to pay all Transaction Fees incurred pursuant to the Exchange Rules and Transaction Fee Schedule. Jennifer L. Gray is an associate in the New York office of Brown Raysman Millstein Felder & Steiner LLP. This sample clause is intended to serve solely as an exemplar and may need to be modified to conform to the legal requirements of your jurisdiction. It in no way constitutes legal advice.

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