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Exhibit 10.10
MARKETING AGREEMENT
AGREEMENT entered into as of the 16th day of February, 2000 by and between
Xxxxxxx Communications, Inc., a Delaware corporation with offices at One Xxxx
Xxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxx 00000 (hereafter referred to as "Xxxxxxx"),
and LCS Golf, Inc., a Delaware corporation with offices at 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (hereafter referred to as "LCSG"). Xxxxxxx and LCSG are
also sometimes referred to as a "Party" or the "Parties."
RECITALS:
A. WHEREAS, LCSG is engaged in the marketing of products and services related
to golf using the internet.
B. WHEREAS, Xxxxxxx is engaged in the development and operation of businesses
marketing a variety of products and services using the internet.
C. WHEREAS, Xxxxxxx and LCSG wish to develop programs to market products and
services to the visitors to and customers of LCSG's websites.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
acknowledged by the parties, it is hereby agreed as follows:
1 Definitions.
1.1 "Agreement" means this agreement between Xxxxxxx and LCSG.
1.2 "Customer" means any Person acquiring products or services pursuant
to the Marketing Program.
1.3 "GAAP" means generally accepted U.S. accounting principles,
consistently applied and consistent with past practices of the Party
responsible for preparing the calculation.
1.4 "Governmental Regulations" means any federal, state or local
governmental rules and regulations governing the activities
conducted under this Agreement.
1.5 "Exclusive Xxxxxxx Products" means the product and service
categories identified on Schedule 1.5 annexed hereto.
1.6 "LCSG's Common Stock" means shares of LCSG's common stock with a par
value of $.001 per share.
1.7 "LCSG Data Base" means the information regarding the visitors to and
customers of the LCSG Websites and other persons otherwise available
to LCSG, including but not limited to, their names, telephone
numbers, addresses, and e-mail addresses.
1.8 "LCSG Products and Services" means any of the products and services
marketed by LCSG or any of its Affiliates during the Term.
1.9 "LCSG Websites" means any of the websites owned, sponsored or
controlled by LCSG now or at any time during the term of this
Agreement; LCSG's current websites are identified on Schedule 1.9
annexed hereto.
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1.10 "Marketing Materials" means advertisements in all media (including
the internet, print, television and radio), brochures, solicitation
materials, scripts, displays, or other information which describes
or otherwise relates to the Marketing Programs and used to solicit
customers for the Marketing Programs.
1.11 "Marketing Program" means any one of the Actual Xxxxxxx Programs or
LCSG Sales Promotions for the marketing of products and services
developed by the parties under this Agreement.
1.12 "Member Record Fee" means the fee of twenty-five cents ($0.25) for
every valid Name delivered to Xxxxxxx or its Affiliate for
registration in xxxxxxxxxx.xxx, referred to in paragraph 2.9.1 of
this Agreement.
1.13 "Member Record" has the meaning set forth in paragraph 2.10.1 of
this Agreement.
1.14 "Multibuyer Record Fee"has the meaning set forth in paragraph 2.10.1
of this Agreement.
1.15 "Names" means the name, address (street, post-office box or e-mail),
telephone number or other means of identification of any individual,
person or entity identified in the LCS Data Base.
1.16 "Net Revenue" means gross revenues generated by a Sales Program,
less direct out-of-pocket costs of acquiring Program Products and
Services (including royalties or fees to third parties), the cost of
producing the Marketing Materials and all other expenses directly
related to the Actual Xxxxxxx Program incurred by either Party,
determined in accordance with GAAP.
1.17 "Option" has the meaning set forth in Section 4.1 of this Agreement.
1.18 "Parties" means Xxxxxxx and LCSG.
1.19 "Person" means any individual, corporation, partnership, trust, or
other entity.
1.20 "Program Data Base" means the information regarding the Customers of
the Marketing Program and the other Persons solicited by or
responding to the Marketing Materials, including but not limited to,
their names, telephone numbers, addresses, and e-mail addresses, and
any list of customers generated by the Marketing Programs by either
Party.
1.21 "Program Products and Services" means any of the Xxxxxxx Products or
Services marketed as part of a Sales Program conducted under this
Agreement.
1.22 "Xxxxxxx Banner Ads" has the meaning set forth in Section 2.2 of
this Agreement.
1.23 "Xxxxxxx E-Mail Promotions" has the meaning set forth in Section 2.1
of this Agreement.
1.24 "Xxxxxxx-Golf Hyper-Link" has the meaning set forth in Section 2.3
of this Agreement.
1.25 "Xxxxxxx Off-line Promotions" has the meaning set forth in Section
2.4 of this Agreement.
1.26 "Xxxxxxx Products and Services" means any Xxxxxxx'x or its
Affiliates' products, services, or programs or marketing campaigns
(including those of Xxxxxxx'x marketing partners or co-venturers),
which Xxxxxxx markets or which Xxxxxxx acquires the right to market
from time to
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time, and includes product or service offerings whose primary
purpose is to capture customer data rather than generate revenue.
1.27 "Xxxxxxx Promotion" means any of the Xxxxxxx Banner Ads, Xxxxxxx
E-Mail Promotions, Xxxxxxx-Golf Hyperlink or Xxxxxxx Off-line
Promotions.
1.28 " Sales Program" means a particular program using any of the Xxxxxxx
Promotions to market specific Xxxxxxx Products and Services under
the Marketing Program.
2 Marketing Program.
2.1 During the term of this Agreement, Xxxxxxx shall have the right to
transmit e-mail messages marketing or promoting Xxxxxxx Products and
Services to the LCS Database (such e-mail messages are referred to
as "Xxxxxxx e-mail Promotions"). The maximum per month that number
of e-mail messages to the Names in the LCSG Data Base equal to the
product of (i) four (4) multiplied by (ii) the daily average during
the immediately preceding month of the entire number of Names on the
LCS Data Base, As an example of the foregoing calculation, if the
number of names in the LCS Database equals 50,000 on the date
hereof, Xxxxxxx may transmit up to 200,000 e-mail messages to Names
in the LCS Database. If as of six months after the date hereof, the
number of names in the LCS Database equals 100,000, the total number
of e-mail messages which Xxxxxxx may transmit shall have increased
to a total of 400,000.
2.1.1 LCSG will permit Xxxxxxx at Xxxxxxx'x option to transmit the
Xxxxxxx e-mail Promotions to the LCSG Data Base using
Xxxxxxx'x own facilities and equipment.
2.2 During the term of this Agreement, LCSG will make banner
advertisements available to Xxxxxxx to for the marketing of the
Exclusive Xxxxxxx Products (hereafter such banner advertisements are
referred to as the "Xxxxxxx Banner Ads"). The banner advertisements
will be displayed prominently on the LCS Websites and in a manner so
that each visitor to an LCS website will see the banner
advertisement.
2.3 During the term of this Agreement, LCSG will permit Xxxxxxx to
create hyperlinks once per month on one of the LCSG Websites
selected by Xxxxxxx, to a Xxxxxxx Website designated by Xxxxxxx
(referred to as the "Xxxxxxx-Golf Hyperlink") using any of the
following methods: e-mail messages containing a Xxxxxxx-Golf
Hyperlink, a newsletter to subscribers, or through text messages on
the LCSG Website. The form and text of the methods used to create a
hyperlink will be Xxxxxxx Product and Service.
2.4 Xxxxxxx shall also have the right during the term of this Agreement
to market any Xxxxxxx Products and Services to those names in the
LCS Database which it deems appropriate using media other than the
internet once per month during the term of this Agreement. Such
solicitations may pertain to any Xxxxxxx Products and Services,
selected by Xxxxxxx in its discretion (such marketing referred to as
"Xxxxxxx Off-line Promotions").
2.5 Xxxxxxx will determine in its discretion the nature and terms of the
Xxxxxxx Products and Services to feature on the banner
advertisements. It is understood that the Xxxxxxx Products and
Services include products and services of Xxxxxxx'x strategic
partners and other entities with which it has marketing
arrangements, including SkyMall, Inc., Cybergold and itarget, and
that the consent of
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such third parties will be required for Xxxxxxx to market any of
such products or services as part of the Marketing Program.
2.6 Xxxxxxx will prepare the Marketing Materials for the Sales
Promotions and submit them to LCSG for approval, which approval
shall not be unreasonably withheld or delayed. LCSG will respond to
any request by Xxxxxxx for approval hereunder within a reasonable
period of time (not to exceed five (5) days), and if the approval is
not granted, the Parties will attempt in good faith to promptly
resolve any objections. Failure to respond shall be deemed to be
approval.
2.6.1 Each Party grants the other a non-exclusive license during the
Term to use the name, logos and trademarks and trade names of
the other approved as part of the approved Marketing
Materials.
2.6.2 Following the end of the Term, each Party will have the right
to use the Marketing Materials as a basis for materials used
in the marketing of other products and services, provided that
the Party making use of the Marketing Materials does not use
the name, trademarks, trade names, logos or other Confidential
Information of the other Party.
2.7 Xxxxxxx will be responsible for the management and execution of each
Sales Program and will provide customer service for Xxxxxxx Products
and Services (and its direct out-of-pocket expenses incurred in
providing the foregoing services shall be borne equally by the
parties).
2.8 LCSG will provide at its expense any customer service required for
any LCSG Products and Services sold as part of a Sales Program.
2.9 LCSG will make available to Xxxxxxx the LCSG Web Sites for the
conduct of the Xxxxxxx Promotions and the Sales Programs and provide
Xxxxxxx with the LCSG Data Base.
2.10 LCSG will give all visitors to the LCSG Websites the opportunity to
opt-in to become a member of Xxxxxxx'x the websites operated by
Xxxxxxx'x subsidiary under the name "xxxxxxxxxx.xxx." or
"xxxxxxxxxx.xxx" as selected by Xxxxxxx. The Names of those persons
who opt-in will be delivered individually or in a batch as requested
by Xxxxxxx, in as fast a manner as possible (but at least once every
24 hours).
2.10.1 Xxxxxxx will pay LCSG twenty-five cents ($0.25) for every
valid Name delivered to Xxxxxxx or its Affiliate for
registration in xxxxxxxxxx.xxx (hereafter each valid record
containing a Name is referred to as a "Member Record" and the
$0.25 fee is referred to as the "Multibuyer Record Fee"); such
payment will be made monthly within thirty (30) days after the
end of each month in which a Member Record is delivered.
2.10.2 Revenue derived by Xxxxxxx or its Affiliates from such
registrations will not be part of Net Revenue.
2.11 LCSG will permit Xxxxxxx to create a link for placement on the
xxxxxxxxxxxx.xxx website to a custom version of Xxxxxxx'x
subsidiary's XxxxxXxxxx.xxx website, at which participants will be
given the opportunity to win a lottery prize in excess of
$1,000,000.00 (such custom version referred to as the "GroupLotto
Golf Link"). Revenue derived by Xxxxxxx or its Affiliates from the
GroupLotto Golf Link will not be part of Net Revenue, but the data
regarding Customers and visitors to the GroupLotto Golf Link will be
shared in accordance with Section 2.12 of this Agreement.
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2.12 All data regarding Customers and visitors captured from the
promotions or sales conducted by Xxxxxxx and LCSG pursuant to the
Marketing Programs shall be part of the Program Data Base, and all
information contained in or derived from the Program Data Base may
be used as either Party chooses, provided such use does not violate
Governmental Regulations and except as otherwise provided in this
Agreement.
2.12.1 Each Party agrees that it will not during the term use the
Names in the Program Data Base to offer for sale products or
services which compete with the products or services offered
by the other Party.
2.12.2 Notwithstanding the foregoing, LCSG shall not have the right
to lease, rent or otherwise transfer the information contained
in the Program Data Base to any third party.
2.13 Customers of and visitors to the LCSG Web Sites responding to the
Marketing Program will be properly informed, prior to the capture of
any personal information about them, that such information to be
included in the Program Data Base will be used for marketing
purposes and future solicitations.
2.14 Xxxxxxx will have the exclusive right during the Term to market the
Exclusive Xxxxxxx Products and Services to the LCSG Data Base.
2.15 If during the Term either Party is notified or otherwise becomes
aware of any complaint or formal investigation by any governmental
authority of an alleged unfair or deceptive business practice or any
other alleged violation of any Governmental Regulation with respect
to the Marketing Program ("Complaint"), it shall provide the other
Party with prompt written notice of the Complaint, and if the
Complaint is initiated on the basis of the approved Marketing
Materials, then such approved Marketing Materials shall be revised
immediately to resolve such Complaint or the use of such approved
Marketing Materials shall cease within five (5) calendar days of
notification to Xxxxxxx of a Complaint. If the Complaint arises from
a breach by a Party of its obligations under this Agreement, the
non-breaching Party shall have the right to terminate this Agreement
under the provisions of Paragraph 6.2 below.
2.16 LCSG hereby grants Xxxxxxx the exclusive option during the Term of
this Agreement to manage the LCSG Database on an exclusive basis on
terms no less favorable than those contained in the agreement
between ConsumerNet and LCSG executed by LCSG on June 21, 1999 (the
"ConsumerNet Agreement"). Such option is granted subject to
termination of the ConsumerNet Agreement, which LCSG represents is
terminable on 90 days notice by either LCSG or ConsumerNet. If
Xxxxxxx notifies LCSG that it exercises such option, LCSG will give
notice of termination of the ConsumerNet Agreement to ConsumerNet
and upon the termination of the ConsumerNet Agreement Xxxxxxx will
manage the LCSG Database on the terms referred to in this Paragraph
2.16 , provided, however, that the term of such Database management
agreement with Xxxxxxx shall expire one (1) year from its
commencement.
3 Revenues and Expenses; Fees to Xxxxxxx for LCSG Sales Promotions.
3.1 Net Revenue generated from the sale of Program Products and Services
during the Term will be shared equally by the Parties. Xxxxxxx will
account to LCSG for all revenue received from the sale of Program
Products and Services, and if LCSG receives any revenue from the
sale of Program Products and Services it will account for such
revenue to Xxxxxxx; it is acknowledged and agreed that it is
anticipated that all Net Revenue will be collected and distributed
by Xxxxxxx.
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Only that revenue directly resulting from the sale of a Xxxxxxx
Product or Service offered as part of a Sales Program will be
included in revenue which is subject to the sharing provisions of
this Section 3. Net Revenue subject to sharing under this Agreement
shall be paid and distributed quarterly by the Party responsible for
such payment and distribution, less reserves for bad debt and other
reserves prudent and customary for the Sales Programs conducted
under this Agreement.
3.1.1 Each payment of Net Revenue will be accompanied by a report
explaining the calculation of Net Revenue.
3.1.2 It is understood and agreed that if a Xxxxxxx Promotion is
used to drive traffic to a website of Xxxxxxx or one of its
Affiliates, the revenue derived from any subsequent sale of a
Xxxxxxx Product or Service will not be part of Net Revenue and
will not be shared by the Parties, and that the revenue
sharing arrangements described in this Agreement will only
apply to the sale of a Xxxxxxx Product or Service offered for
sale as part of a Xxxxxxx Promotion in a Sales Program
conducted by Xxxxxxx.
3.2 The costs and expenses incurred in the conduct of the Sales Programs
will be paid by Xxxxxxx and deducted by Xxxxxxx in determining Net
Revenues.
3.3 Each Party shall bear its own general corporate overhead and
administrative expenses in connection with the activities under this
Agreement. Without limiting the foregoing, the LCSG Data Base will
be provided by LCSG to Xxxxxxx for use in connection with the Sales
Programs developed under this Agreement without any charge or
expense.
3.4 Each Party or its independent certified public accounting firm will
have the right no more than once per calendar year during the Term
of this Agreement and the two year period following the end of the
Term to audit and/or cause an audit to be made of the separate
records (collectively, the "Records") of the other Party with
respect to the Marketing Program, including with respect to the
calculation of Net Revenues. A Party seeking examination will have
free and full access to the Records for such purpose on reasonable
notice and at a mutually convenient time. Each Party will retain the
Records for a period of three (3) years following its rendition of
any report or calculation of Net Revenue and amounts due to the
other Party under this Agreement. In the event of underpayment or
late payment of an amount due to a Party, the Party owing the amount
will be liable for interest on the unpaid amount at the prime rate
of interest announced as such in The Wall Street Journal, New York,
NY on the first date immediately preceding the date payment was due,
said interest to accrue from the date on which payment was due until
date of payment. A Party's receipt or acceptance of any of any
statements furnished hereunder or of any payments paid hereunder
shall not preclude a Party from questioning the correctness thereof
at any time, and in the event that any inconsistencies or mistakes
are discovered in such statements or payments, they shall be
immediately rectified and the appropriate payment shall be made,
with interest as provided for herein. In the event that any audit of
the Records indicates that amounts due a Party have been underpaid
in excess of $25,000.00, the underpaying Party will reimburse the
other Party to whom payment is due for its reasonable costs and
expenses for such audit with interest as provided for herein.
3.5 The provisions of this Section 3 shall survive the termination of
this Agreement
4 Options to Purchase LCSG Stock.
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4.1 In consideration for Xxxxxxx'x entry into this Agreement, LCSG has
issued Xxxxxxx options (the "Options") to purchase up to 200,000
shares of LCSG's Common Stock exercisable for two (2) years from the
date of issuance at an exercise price of $1.00 per share for 100,000
of the Options, and an exercise price of $2.00 per share for 100,000
of the Options; the Options are in the form of the Option
Certificate annexed hereto as Schedule 4.
4.2 Concurrently with the execution of this Agreement, the Parties have
executed a Registration Rights Agreement with respect to the
Warrants in the form annexed hereto as Schedule 4-1.
5 Confidentiality.
5.1 A Party receiving information hereunder is hereinafter referred to
as the "Receiving Party" and the party disclosing information is
hereinafter referred to as the "Disclosing Party"; a Party's
officers, directors, employees, agents, professional advisors and
consultants are collectively referred to as "Representatives"). Both
Parties understand that each Party may provide the other Party with
certain proprietary and confidential information during the term of
this Agreement. All such proprietary and confidential information
furnished by the Disclosing Party or its Representatives to or on
behalf of the Receiving Party (irrespective of the form of
communication and whether such information is so furnished before,
on or after the date hereof) and all analyses, compilations, data,
studies, notes, interpretations, memoranda or other documents
prepared by the Disclosing Party or its Representatives containing
or based in whole or in part on any such furnished information is
collectively referred to herein as the "Confidential Information".
In addition, all such Confidential Information furnished by the
Disclosing Party to the Receiving Party or its Representatives,
(irrespective of the form of communication and whether such
information is so furnished before, on or after the date hereof) and
all analyses, compilations, data, studies notes, interpretations,
memoranda or other documents prepared by the Disclosing Party or its
Representatives containing or based in whole or in part on any such
furnished information are also collectively referred to as the
"Confidential Information." The term "Confidential Information"
shall not include any documents, data or other information which (i)
at the time of disclosure or thereafter is publicly available (other
than as a result of a disclosure by the Receiving Party or Receiving
Party's Representatives in violation hereof); (ii) was, is or
becomes available to Receiving Party on a non-confidential basis
from a source other than Disclosing Party or its advisors, provided
that such source was not known by Receiving Party to be prohibited
from disclosing such information to Receiving Party by a legal,
contractual or fiduciary obligation owed to Disclosing Party; (iii)
was or is already in Receiving Party's possession (other than
Confidential Information furnished by or on behalf of Disclosing
Party); or (iv) is independently developed by Receiving Party or on
Receiving Party's behalf without violating Receiving Party's
obligations of confidentiality hereunder. All Confidential
Information provided by either Party shall not be disclosed or
referred to publicly, or to any third party, except as permitted
below. The Receiving Party will disclose the Confidential
Information only to its Representatives directly concerned with the
evaluation of the proposed Marketing Agreement. In the event that a
Receiving Party or any of its Representatives become legally
compelled (by deposition, interrogatory, request of documents,
subpoena, civil investigative demand or similar process) to disclose
any of the Confidential Information of the Disclosing Party, the
Receiving Party or other such person from whom such Confidential
Information is being sought shall provide the Disclosing Party with
prompt prior written notice of such requirement so that the
Disclosing Party may seek a protective order or other appropriate
remedy and/or waive compliance with the terms of this Agreement. In
the event that such protective order or other remedy is not
obtained, or the Disclosing Party waives compliance with the
provisions hereof, the person required to provide such information
agrees to furnish only such portion of the Confidential Information
that is legally required to be furnished.
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5.2 Except as may be required by Governmental Regulations, neither Party
shall issue a press release or make any public announcement
regarding or relating to the Marketing Program without review by,
and the prior consent of, the other Party. Xxxxxxx and LCSG shall
consult with each other prior to any conference with the press or
other news media relating to the Marketing Program, including
consultation with regard to appropriate responses to questions from
the press or other media about the Marketing Program.
5.3 The provisions of this Section 5 shall survive the termination of
this Agreement
6 Representations and Warranties; Indemnification.
6.1 Each Party represents and warrants to the other Party that it is a
corporation, duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has the
corporate power and authority to execute and deliver this Agreement,
to consummate the transactions hereby contemplated, and to take all
other actions required to be taken by it pursuant to the provisions
hereof, and is not subject to, or a party to, any contract,
agreement, instrument, order, judgment or decree, or any other
restriction of any kind or character, which would prevent its entry
into or performance under this Agreement, and no consent of or other
action by or notice to any third party is required in connection
with the Party's entering into and performing under this Agreement,
and that this Agreement and the transactions described in this
Agreement have been duly authorized by all necessary corporate
action.
6.2 LCSG represents that the issuance and delivery of the Options and
execution and delivery of the Registration Rights Agreement have
been duly authorized by all necessary corporate action, that it has
reserved for issuance a sufficient number of shares of LCSG Common
Stock issuable upon exercise of the Options, that all of such shares
have been duly authorized, and when the Options are exercised and
the exercise price has been paid, will be fully paid and
non-assessable.
6.3 The Parties will be jointly and severally responsible for any
liabilities of or claims against either of them arising from the
conduct of the Marketing Program, provided the Party whose
activities give rise to the claim conducted such activities in
accordance with the approved Sales Programs and Marketing Materials.
6.4 Each Party will indemnify the other Party and hold the other Party
harmless from any liability, cost or expense arising solely from a
breach of its representations and warranties in Paragraphs 6.1 or a
breach by the Party of its obligations under paragraph 6.2.
6.5 A party entitled to indemnification under this Agreement shall be
referred to hereafter as an "Indemnified Party" and a party
obligated to provide indemnification shall be referred to hereafter
as an "Indemnifying Party". If at any time an Indemnified Party
shall claim indemnification from an Indemnifying Party for any Loss
or, in the reasonable judgment of the Indemnified Party, for what,
in the future, may result in a Loss ("Anticipated Loss") due to the
filing, at or before the time of such claim, of an action, claim or
suit with an arbitrator, mediator, court or other governmental
entity as to which the Indemnified Party is entitled to
indemnification under this Agreement ("Claim"), then the Indemnified
Party shall promptly send written notice of the same (a "Notice of
Claim") to the Indemnifying Party describing such Claim in
reasonable detail. A Notice of Claim shall specify the basis for
such Claim supported by relevant information and documentation.
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6.5.1 If the Indemnifying Party shall allege that the Indemnified
Party is not entitled to indemnification with respect to such
Claim, it shall give written notice of such objection (a
"Notice of Objection") to the Indemnified Party within 15
business days after receipt by the Indemnifying Party of the
Notice of Claim, specifying the basis of the objections. If
the Indemnifying Party does not give a Notice of Objection
within such 15 business days, or shall have agreed to pay such
Claim in whole or in part within such 15 business-day period,
the Indemnifying Party shall thereupon be liable for the
payment of all Losses relating to such Claim, except as
otherwise provided in Section 6.4.2 herein.
6.5.2 In the event that the Indemnified Party shall have timely
given a Notice of Objection in whole or in part to any Notice
of Claim, during the 20-day period following that date, the
Indemnified Party and the Indemnifying Party shall privately
attempt to resolve the Claim. If the Indemnified Party and the
Indemnifying Party shall have failed to resolve or compromise
or agree to postpone resolution of the Claim within such
20-day period, then the Claim shall be settled by arbitration
in New York, New York (the place in which the arbitration is
to be held shall be referred to as the "Arbitration Venue"),
as determined by the three arbitrators referred to in
Paragraph 6.4.3 below, in accordance with the rules of the
American Arbitration Association and the procedures set forth
below.
6.5.3 Each of (A) the Indemnified Party and (B) the Indemnifying
Party shall appoint one arbitrator, and the two arbitrators so
appointed shall then together appoint a third arbitrator
("neutral arbitrator") from a list of persons supplied by the
American Arbitration Association in the Arbitration Venue. If
one party shall fail to appoint the arbitrator to be appointed
by it within 15 days after the end of the 20-day period
provided for in Section 6.4.2 above, the arbitrator appointed
by the other party shall select from a list of persons
supplied by the American Arbitration Association a person who
shall serve as the single neutral arbitrator for purposes of
the arbitration. If each party shall have appointed one
arbitrator, but such designees cannot agree on the person to
act as the neutral arbitrator within a period of 15 days after
the appointment of the second arbitrator, then either party
may apply to the American Arbitration Association in the
Arbitration Venue, which shall appoint a neutral arbitrator.
The arbitrators shall conduct the arbitration with all
reasonable dispatch in accordance with the rules of the
American Arbitration Association, provided, however, that the
parties to such arbitration shall take such action and execute
such instruments as shall be necessary to cause the rules of
civil procedure of the state in which the Arbitration Venue is
located pertaining to pre-trial discovery to be applicable in
respect of such proceeding. The arbitrators shall render a
written award (the "Award") which shall be delivered to the
Indemnified Party and the Indemnifying Party. An Award
hereunder may be used as a basis for the entry of judgment in
any jurisdiction. In the event the parties have submitted a
Claim for an Anticipated Loss to arbitration under this
Section 6 then the arbitrators may, in their sole discretion,
postpone resolution of the Claim until the time which they
have determined, in their sole discretion, to be the time when
such Anticipated Loss shall have occurred or passed.
6.5.4 Prior to making the Award, the arbitrators shall direct the
Indemnified Party and the Indemnifying Party to submit
statements describing any element of Loss or Anticipated Loss
as to which a Claim is made that is attributable to attorneys'
fees, disbursements, and any similar costs incident to such
Loss or Anticipated Loss, supported by affidavits showing that
such costs actually have been or are likely to be incurred,
and all such attorneys' fees, disbursements and other costs
shall be apportioned as determined by the
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arbitrators. All fees of the arbitrator and administrative
expenses of the American Arbitration Association shall be
treated as costs for purposes of this Section 6. As a part of
each Award made pursuant to this Agreement, the arbitrators
shall allow interest thereon (other than on the portion of the
Award representing attorneys' fees, disbursements and costs)
from the date of the Loss or the date the Anticipated Loss
becomes a Loss to the date of payment at the rate of 10% per
annum.
6.5.5 The Award shall be a conclusive determination of the matter
and shall be binding upon the Indemnified Party and the
Indemnifying Party, and shall not be contested by either of
them. The Indemnifying Party shall satisfy its obligations to
pay an Award in cash.
6.5.6 If the subject of a Claim involves a third-party claim which
has not yet been determined, the arbitrators may in their
discretion make a separate determination solely as to whether
the third-party claim is one for which indemnification may be
had or may defer a determination as to whether indemnification
may be had pending the further development of information as
to the nature of the third-party claim. If the arbitrators
determine that the third-party claim is not subject to
indemnification, they shall set forth the basis of his
decision in detail, which decision shall be deemed to be an
"Award" hereunder.
6.5.7 If the Indemnified Party requests that the Indemnifying Party
defend it against a Claim involving an Anticipated Loss, then
the Indemnifying Party may, at its option, assume the defense
of the Indemnified Party against such Claim (including the
employment of counsel, who shall be counsel satisfactory to
the Indemnified Party,) and the payment of expenses. If the
Indemnified Party does not request the Indemnifying Party to
defend it against such Claim or the Indemnifying Party fails
to assume the defense of such Claim within a reasonable time
after having been requested by the Indemnified Party to assume
the defense, then the Indemnified Party shall have the right
to defend himself in any such action and, if appropriate under
Section 4(a) above, be indemnified for his costs and fees of
defense by the Indemnifying Party. The Indemnified Party, at
its own cost, may employ separate counsel to assert, based on
an opinion of counsel to the Indemnified Party, one or more
legal defenses available to it which are different from or
additional to those available to such Indemnifying Party; the
Indemnifying Party shall not have the right to direct the
defense of such action on behalf of the Indemnified Party in
respect of such different or additional defenses. The
Indemnifying Party shall not be liable to indemnify the
Indemnified Party for any settlement of any such action or
claim effected without the consent of the Indemnifying Party,
but if settled with the written consent of the Indemnifying
Party, or if there be a final judgment for the plaintiff in
any such action, the Indemnifying Party shall indemnify and
hold harmless the Indemnified Party from and against any Loss
by reason of such settlement or judgment and the Indemnifying
Party shall thereupon be liable for the payment of such Loss.
6.6 The provisions of this Section 6 shall survive the termination of
this Agreement.
7 Term; Termination.
7.1 The term of this Agreement shall commence on the date hereof and
continue for two (2) years thereafter, unless sooner terminated in
accordance with this Agreement.
7.2 Either Party may terminate this Agreement in the event of a default
by the other Party in the performance of any of its material
obligations under this Agreement which is not cured within
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thirty (30) days after notice of such default has been given to the
Party alleged to be in default by the other Party.
7.3 Either Party may give the other Party notice of its intention to
terminate this Agreement if at least one (1) Sales Program is not
being conducted during any twelve (12) month period after the date
hereof, and if a Sales Program is not approved or conducted within
the sixty (60) day period following such notice, the Party giving
the notice may terminate this Agreement on notice to the other
Party.
7.4 Either Party may terminate this Agreement upon notice to the other
Party if an "Event" occurs with respect to the other Party. For
purposes of this paragraph, an "Event" shall mean:
7.4.1 a Party liquidates, winds up its business, dissolves or
terminates it existence;
7.4.2 any voluntary proceeding by a Party is commenced under any
chapter of the Federal Bankruptcy Code or other law relating
to bankruptcy, bankruptcy reorganization, insolvency or relief
of debtors, or any such proceeding is commenced against a
Party and such proceeding is not dismissed within sixty (60)
days from the date on which it is filed or instituted; or a
Party shall make an assignment for the benefit of creditors or
admit in writing its inability to pay its debts as they mature
or that it is otherwise insolvent.
8 Miscellaneous.
8.1 Assignment. Neither Party may assign its rights and obligations
under this Agreement without the consent of the other Party.
8.2 Notices. Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed effective (a) upon
personal delivery, if delivered by hand and followed by notice by
mail or facsimile transmission; (b) one day after the date of
delivery by Federal Express or other nationally recognized courier
service, if delivered by priority overnight delivery between any two
points within the United States; or (c) five days after deposit in
the mails, if mailed by certified or registered mail (return receipt
requested) between any two points within the United States, and in
each case of mailing, postage prepaid, addressed to a party at its
address first set forth above, or such other address as shall be
furnished in writing by like notice by any such party.
8.3 Waiver. No waiver by a party of any breach of this Agreement by the
other shall be deemed to be a waiver of any preceding or subsequent
breach.
8.4 Entire Agreement. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter contained
herein.
8.5 No Third Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action
in or on behalf of any person other than the parties hereto and the
other persons executing this Agreement.
8.6 "Force Majeure". Neither Party shall be considered to be in default
in the performance of any obligations under this Agreement when a
failure of performance shall be due to an uncontrollable force. The
term "uncontrollable force," as used in this Agreement, shall mean
an unanticipated event which is not reasonably within the control of
the affected Party and which
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by exercise of reasonable due diligence, such affected Party could
not reasonably have been expected to avoid, overcome or obtain or
cause to be obtained a commercially reasonable substitute therefor.
Such causes may include, without limitation, the following: flood,
earthquake, tornado, storm, fire, explosion, public emergency, civil
disobedience, labor dispute, labor or material shortage, sabotage,
restraint by court order or public authority (whether valid or
invalid), and action or non-action by or inability to obtain or keep
the necessary authorizations or approvals from any governmental
agency or authority; however, no Party shall be relieved of its
obligations hereunder, if its failure of performance is due to
removable or remediable causes which such Party fails to remove or
remedy using commercially reasonable efforts within a reasonable
time period. Either Party rendered unable to fulfill any of its
obligations under this Agreement by reason of an uncontrollable
force shall give prompt notice of such fact to the other, followed
by written confirmation of that notice, and shall exercise due
diligence to remove such inability with all reasonable dispatch. The
provisions of this paragraph, however, shall not affect a Party's
right to terminate this Agreement under the provisions of Paragraph
6.3 above.
8.7 Limitation of Liability. The exclusive measure of damages
recoverable from claims arising from, under or in connection with
the Agreement, whether arising by negligence, intended conduct or
otherwise shall be limited to actual damages only and such damages
shall be the sole and exclusive remedy hereunder and all other
remedies or damages are waived. In no event shall any Party be
liable for any incidental, consequential, punitive, exemplary or
indirect damages, lost profits or other business interruption
damages, lost or prospective profits, in tort, contract or
otherwise. The provisions of this Paragraph 7.6 shall survive the
termination of this Agreement.
8.8 Amendment. This Agreement may not be changed orally, but only by an
agreement in writing signed by the Party or parties to be charged
thereby.
8.9 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the law of New York, including its
choice of law rules. Any judicial proceeding brought against any of
the parties to this Agreement on any dispute arising out of this
Agreement or any matter related hereto shall be brought in the
courts of the State of New York in New York County or in the United
States District Court for the Southern District of New York, and, by
execution and delivery of this Agreement, each of the parties to
this Agreement accepts for itself the jurisdiction of the aforesaid
courts, irrevocably consents to the service of any and all process
in any action or proceeding by the mailing of copies of such process
to such Party at its address provided for the giving of notices
under Section 13(c) above, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. Each
Party hereto irrevocably waives to the fullest extent permitted by
law any objection that it may now or hereafter have to the laying of
the venue of any judicial proceeding brought in such courts and any
claim that any such judicial proceeding has been brought in an
inconvenient forum.
8.10 No Partnership or Agency. This agreement does not constitute a joint
venture or partnership by the parties, and each Party is entering
into this Agreement as a principal and not as an agent of the other.
8.11 Severability. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable
laws, ordinances, rules and regulations. In case any one or more of
the provisions contained in this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining
provisions contained herein and any other application thereof shall
not in any way be affected or
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impaired thereby, and the extent of such invalidity or
unenforceability shall not be deemed to destroy the basis of the
bargain among the parties as expressed herein, and the remainder of
this Agreement and the application of such provision to other
Persons or circumstances shall not be affected thereby, but rather
shall be enforced to the greatest extent permitted by law.
8.12 Section Headings. The section headings appearing in this Agreement
are for convenience of reference only and are not intended, to any
extent or for any purpose, to limit or define the text of any
section.
8.13 Counterparts. This Agreement may be executed in several counterparts
and all counterparts so executed shall constitute one agreement
binding on all the parties hereto, notwithstanding that all the
parties are not signatory to the original or the same counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized officers as of the date first written above.
Xxxxxxx Communications, Inc.
By: /s/
-----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chmn & CEO
LCS GOLF, INC.
By: /s/
-----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
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SCHEDULE 1.5
Exclusive Xxxxxxx Products
Long distance telephone service
cellular telephone service
satellite dishes
mortgages
credit cards
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SCHEDULE 1.9
LCSG WEBSITES
xxxxxxxxxxxx.xxx
xxxxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxx.xxx
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SCHEDULE 4
Option Certificate
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SCHEDULE 4-1
Registration Rights Agreement
THIS OPTION AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS
REGISTERED UNDER SUCH ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR
QUALIFICATION THEREUNDER.
17
