Confidential
LDC DIRECT DISTRIBUTION AGREEMENT
THIS LDC DIRECT DISTRIBUTOR AGREEMENT is made and entered into this 6 day
of July, 1999 by and between LDC Direct, Ltd. Co. ("LDC") having is principal
place of business at One Buckhead Plaza, 0000 Xxxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, and Q Comm, Inc. with its principal place of business at
[Illegible] ("Distributor").
In consideration of the mutual promises and covenants set forth herein.
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Capitalized words and phrases used in this Agreement shall have the
following meaning:
1.1 Affiliate. Means a person, association, partnership, corporation or
joint-stock company, trust or other business entity ("Person") is an affiliate
of any other person that (i) directly or indirectly owns more than fifty percent
(50%) of the voting power of all classes of voting stock of any such Person that
is a corporation or (ii) owns more than fifty percent (50%) of the beneficial
interests in income and capital of an entity other than a corporation.
1.2 Account. Means any Retail Dealer who agrees with and is accepted by
Distributor to sell or otherwise provide products and/or services ("Products")
using LDC's POS System.
1.3 Blank System Cards. Means wallet-size cards (3 3/8" x 2 l/8")
consisting of thermally sensitive stock on at least one side.
1.4 Charges. Means the charges payable by Distributor to LDC as more
specifically set forth in LDC's most recently published price list attached
hereto as Exhibit A and as updated from time to time by LDC with 60 days advance
written notice by LDC to Distributor.
1.5 Data Element. Means any unique combination of words, numerals, codes,
personal identification numbers (PIN's) or graphics transmitted by LDC's
Processing Services from the POS System's Server to any one or group of specific
POS System Equipment terminals and which, separately or in combination,
represent the prepaid purchase of one specific Distributor's Product.
1.6 Location. Means, with respect to each Account, each retail location at
which System Equipment is installed and activated for the purpose of issuing
Distributor's Products using LDC's POS System.
1.7 Marks. Means the LDC Direct(TM) xxxx and any other trademarks, trade
names, insignia, symbols, decorative designs, or the like which LDC or its
Affiliates which LDC hereafter, in its sole discretion, grants Distributor
written authorization to use.
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1.8 POS System. Means LDC's proprietary (patent pending) point-of-sale
activation, distribution and reporting system pursuant to which a Distributor's
Account, through the use of the System Equipment and the Processing Services
provided by LDC to Distributor, can dispense Distributor's Products at the
point-of-sale.
1.9 Products. Means such services, which may include but are not limited
to, prepaid phone card, prepaid cellular, prepaid transit, prepaid courier,
and/or customer loyalty programs distributed by the LDC System to Retail Dealers
from Distributor.
1.10 Processing Services. Means the provision by LDC of certain Data
Element management, dispensing and reporting services to or on behalf of
Distributor as more particularly set forth in Section 4.2 hereof in connection
with the sale of products by Accounts using LDC's POS System.
1.11 Retail Dealer. Means any potential seller of Distributor's Products
through the use of LDC's POS System who directly or through Affiliates owns a
retail distribution business such as gas stations, convenience stores, truck
stops, or other retail stores.
1.12 Service Provider. Means either Distributor or one or more providers
of third party services with whom Distributor contracts to provide the Data
Elements necessary for Distributor's Products to be issued through the POS
System.
1.13 System Equipment. Means the LDC POS terminals and any other
peripheral equipment provided by LDC for use in conjunction with the POS System.
1.14 System Supplies. Means the optional components that the Distributor
may order from LDC for use with the POS System at the additional charges as
published in the most recent LDC price list.
1.15 Territory. Means the fifty (50) states of the United States of
America.
1.16 Variable Data Elements. Means parts of the Data Element which vary
from one sales transaction to another, such as, PIN's, control numbers, code
numbers, tracking numbers, serial numbers, etc.
ARTICLE II
NONEXCLUSIVE APPOINTMENT OF DISTRIBUTOR
2.1 Distributor Appointment. LDC hereby appoints Distributor, and
Distributor hereby accepts the appointment, as a nonexclusive authorized
Distributor of LDC's POS System to Retail Dealers for the sale of Distributor's
Products in the Territory through the use of the POS System, subject to all of
the terms and conditions hereof. Distributor acknowledges and agrees that the
distribution rights granted hereunder are limited solely to the POS System and
shall not apply to any other products or services subsequently released by LDC
unless mutually agreed by the parties in writing.
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2.2 Nonexclusive. Distributor acknowledges and agrees that LDC has the
right to and may appoint other nonexclusive authorized Distributors or agents to
sell or to market to Retail Dealers or other potential users of LDC's POS System
in any area, including areas where Distributor may be marketing the POS System
to Retail Dealers, and that LDC has the right to itself or through Affiliates to
market to Retail Dealers or other potential users of LDC's POS System in any
area, including areas where Distributor may be marketing the POS System to
Retail Dealers.
2.3 Authorized Distributor. During the term of this Agreement, Distributor
may represent itself as an authorized Distributor of LDC's POS System; provided
that nothing herein shall be deemed to constitute Distributor as a Distributor
of any of the System Equipment independent of LDC's Processing Services and the
POS System as a whole.
ARTICLE III
GENERAL OBLIGATIONS AND REPRESENTATIONS
Distributor acknowledges and agrees that Distributor has read and
understands the obligations imposed by this Agreement as Distributor.
Distributor acknowledges that it has conducted an independent investigation of
the POS System and the Products that it will promote pursuant hereto.
Distributor recognizes that entity into the prepaid services business and the
marketing of the POS System as a Distributor of LDC involves business risks and
that Distributor's success in such business will depend primarily upon its
abilities and efforts. LDC expressly disclaims the making of, and Distributor
acknowledges that it has not received or relied upon, any guaranty, express or
implied, as to the amount of compensation or other revenue that it may earn as a
result of its relationship with LDC.
ARTICLE IV
SYSTEM EQUIPMENT AND SERVICES
4.1 Ordering and Delivery of System Equipment. LDC will provide
Distributor with System Equipment and Processing Services in order to enable
Distributor or Distributor's Accounts to sell and distribute prepaid Products as
follows:
A. Distributor may purchase the System Equipment and Processing
Services from LDC at the rates and terms shown on the most current price list
published by LDC. LDC may periodically modify their published price list for
System Equipment and Transaction Fees upon sixty (60) days prior written notice
to Distributors. All orders by Distributor require a written purchase order or
similar documentation and are subject to acceptance and acknowledgment by LDC.
LDC's prices are exclusive of all applicable taxes. Distributor shall pay all
taxes associated with the sale and delivery of all System Equipment, except for
taxes based on LDC's income, including collection costs, penalties and interest,
if any, associated with such taxes. If claiming a tax exemption, Distributor
must provide LDC with valid tax exemption certificates;
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B. After addition of any new Location, LDC will ship LDC's then
standard package of System Equipment and any requested System Supplies to
Distributor, or, at Distributor's request and at an additional charge for drop
shipments as shown in LDC's most recently published price schedule, directly to
the uninstalled Location of Distributor's Account, together with any
installation and set-up instructions necessary to enable Distributor or
Distributor's Account to install and activate the System Equipment in order to
permit the use the POS System. Distributor shall pay all shipping and handling
charges at LDC's then-current rates;
C. Distributor or Distributor's Account has a period of thirty (30)
days after receipt of the System Equipment within which to notify LDC in writing
of any defects or discrepancies in the shipment;
D. All System Equipment delivered to the Location will be
pre-programmed with LDC's proprietary software (the "Software") necessary to
activate the System Equipment and use the POS System and will contain a
pre-programmed toll-free number which will enable the System Equipment to
automatically call LDC's host computer (the "Server"); and
E. Upon request, LDC will supply Distributor or Distributor's
Account with supplies of Distributor's Products previously delivered to LDC by
Distributor, and any other supplies required for use with LDC's POS System which
LDC then provides at LDC's then current prices for such supplies.
4.2 Processing and Support Services To Be Provided By LDC. To enable each
Distributor Account to use the POS System, LDC will also provide the following
support services:
A. LDC will provide a toll-free operations support line available
seven (7) days per week, twenty-four (24) hours per day for assistance to
Distributor with POS System failure and other support needs of the Distributor
related to the operation of the System Equipment.
B. LDC will provide a toll-free customer service number for product
set-up and initial activation of System Equipment from Monday through Friday,
9:00 AM to 4:00 PM, Eastern Time.
C. LDC will maintain a Server computer and related equipment with
sufficient capacity and redundancy to handle the system-level data exchange
necessary for the POS System to originate and refresh the Data Elements in the
System Equipment at each Location and for the POS System to track sales and
related transaction data at each Location.
D. LDC will, through its Server, manage and dispense to Distributor
Accounts Data Elements provided by Distributor to LDC as set forth below. As
Part of LDC's Data Element management services, LDC and Distributor will
establish a mutually agreeable method consistent with then-current operation of
the POS System without modification to replenish the Variable Data Elements in
each Distributor's Account in a timely fashion and in such a manner as to assure
Distributor Accounts uninterrupted operation of the POS System and the
replenishment of such Variable Data Elements will be the responsibility of
Distributor.
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E. At the time of sale at a Location, the appropriate Data Element,
including any Variable Data Elements, will be printed by the System Equipment in
a format pre-designed by Distributor. LDC's standard policy on format designs
and minimum quantities shall apply.
F. LDC will make certain standard types of retail reports, as most
currently published by LDC, available to Distributor by electronic interchange
or on a monthly disk at no charge for such reports; and
G. LDC will provide Distributor access to Distributor's data files
resident on LDC's Server via the Internet using Distributor's authentication
codes that will allow Distributor to view electronically the most recent safes
information related to Distributor Account sales (updated at least two times per
week) as part of the standard Transaction Fee, or more frequently at an
additional charge as currently published by LDC.
4.3 Covenants of Distributor. Distributor agrees that Distributor will:
A. Provide LDC with Data Elements and Variable Data Elements in
accordance with LDC's POS System requirements as from time to time modified by
LDC to Distributor.
B. Provide LDC with the Variable Data Elements on a timely basis in
order to assure that the necessary quantity of Variable Data Elements is
maintained in the Server so as to order to assure the uninterrupted flow of
Variable Data Elements through the POS System to Distributor's Accounts.
C. Establish, maintain and make available to LDC upon request a
correct and current database file using software provided by LDC for each
Distributor Account that uses the P0S System in order to assure proper operation
of the POS System reporting.
D. Supply the necessary quantity of Blank System Cards to
Distributors Accounts in order to assure the uninterrupted flow of Products and
Data Elements through the POS System at each Distributor Account's Location,
unless otherwise agreed to in writing between LDC and Distributor. In all cases,
the Distributor's Blank System Cards supplied from time to time by Distributor
to Distributor's Accounts must comply with specifications from time to time
established by LDC in order to assure that such Distributor's Products work
properly with the System Equipment to assure proper operation of the POS System.
Distributor shall provide LDC with twenty (20) Blank System Cards to test and
approve prior to Distributor sending such cards to Distributor Accounts. Blank
System Cards shall be provided to Distributors Accounts by and at the cost of
Distributor. LDC will upon request provide Distributor with information on
current suppliers of Blank System Cards.
E. Assure that all Products sold by Distributor Accounts utilizing
the System Equipment are processed through the POS System.
F. Maintain appropriate technical points of contact responsible for
management of Product pin numbers and support activities.
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G. Not tamper with the System Equipment or Software, nor reverse
engineer or decompile or attempt to reverse engineer or decompile any system
Equipment or Software, nor allow any of its agents, employees or Accounts to do
so.
4.4 Covenants Applicable to Distributor and Distributor's Accounts.
Distributor agrees that Distributor will, and will cause all Distributor
Accounts using the POS System through Distributor to, install and use LDC's POS
System as specified in this Agreement and any written user manuals, instruction
sheets or operating procedures from time to time established by LDC and provided
to Distributor (collectively, the "System Documentation").
ARTICLE V
DOCUMENTATION AND TRAINING
5.1 Documentation and Training Provided by LDC. LDC will make available
periodic one-half day training sessions in Atlanta, Georgia, or such other
location as specified by LDC, for attendance by Distributor and Distributor's
employees at Distributor's expense. At such training sessions, LDC will provide
instructions and materials regarding the installation of System Equipment at
Distributor Account Locations, processing of requests for purchase of System
Equipment and Processing Services by Distributor from LDC and communication of
billing information between LDC and Distributor. Application forms, instruction
manuals and user documentation will also be provided by LDC. Such forms, manuals
and documentation will also be maintained and periodically updated by LDC to
support all changes in procedures. LDC may from time to time develop software,
videotapes, presentation scripts and other materials to demonstrate the features
and functions of the POS System and LDC may provide such materials to
Distributor from time to time for use by Distributor in training or in sales and
marketing of the POS System under this Agreement.
5.2 Distributor Training Program. In meeting Distributor's obligations
under this Agreement, Distributor shall train its employees, salespersons and
other personnel in the operation of LDC's POS System and System Equipment. No
Distributor employee, salesperson or other personnel are to commence the sale or
installation of LDC's POS System until such training is complete.
ARTICLE VI
ADMINISTRATIVE PROCEDURES
6.1 Administration. LDC may periodically prescribe various procedures to
be followed by Distributor and its salespersons in ordering System Equipment and
in the processing of information to register new Distributor Account Locations.
Distributor agrees to comply with all such procedures prescribed by LDC.
Distributor will use only those forms (hardcopy or electronic) from time to time
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required by LDC for enrolling Retail Dealers to use the POS System, and
Distributor will submit copies of all such forms or applications signed by
Distributor and by Retail Dealer to LDC within five (5) working days of
execution thereof. Distributor shall be responsible for Retail Dealer
maintaining all standard operational procedures required at the Retailer's
point-of-sale locations, i.e., making sure that the System Equipment's power
cord is properly plugged into the wall socket and that the telephone connections
are properly secured.
6.2 Sales or Promotional Literature. LDC may from time to time provide
Distributor with sales or promotional literature that may be used by Distributor
in the marketing of the POS System to Retail Dealers under this Agreement.
Distributor agrees that all sales or promotional literature used by Distributor
in the marketing of the POS System to Retail Dealers under this Agreement and
not provided by LDC must be approved in advance by LDC in writing, and
Distributor agrees not to use or distribute any such sales or promotional
materials that have not been provided or approved by LDC.
ARTICLE VII
LDC CHARGES
7.1 Payment of Charges by Distributor to LDC. In exchange for the right to
provide LDC's System Equipment to Retail Accounts and the provision of System
Supplies hereunder, Distributor agrees to pay to LDC: (a) within fifteen (15)
days after the date of any invoice for any such System Equipment and System
Supplies ordered by Distributor; or (b) any prepayment (the "Prepayment") of any
such amounts for System Equipment as may be required by LDC.
7.2 Billing and Payment For Transaction Fees Except as otherwise provided
herein, including any attachments hereto, each month LDC will send Distributor,
at Distributor's principle business address (or such other billing address as
Distributor may notify LDC in writing), a xxxx for all Charges for Transaction
Fees then due and payable to LDC. All payments for such Charges are due and
payable by Distributor to LDC 30 days from the date of the invoice.
7.3 Late Charges and Service Suspension. The amount of any Charges not
paid when due will accrue interest at a monthly rate of 1.5% from the original
date of the statement until paid. In addition, in the event that the payment of
any Charges is more than fifteen (15) days late, LDC will have the right at any
time thereafter to suspend Distributor's resale of the POS System and the
provision of LDC's services hereunder until all such past due Charges and
interest are paid in full. No such service suspension will relieve Distributor
of its obligations under this Agreement including, without limitation, its
obligation to pay Charges. The failure to pay Charges which continues for a
period of thirty (30) days or more after the due date will constitute a material
breach of this Agreement.
7.4 Taxes. Distributor will be solely responsible for the collection and
payment to the appropriate tax authority for all excise, sales or other taxes
applicable to the retail sale of Distributor's products at Distributor's
Locations using the POS System, and LDC will have no liability or responsibility
for any such taxes.
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ARTICLE VIII
LDC's MARKS
8.1 Right to Use Marks; Value of Marks. LDC hereby grants to Distributor
the right to use the Marks solely in connection with Distributor's duties under
this Agreement. Distributor acknowledges that its right to use the Marks is
derived solely from this Agreement and is limited to the right to identify
Distributor as a Distributor of LDC for the solicitation of Retail Dealers to
sell Distributor's Products through the use of LDC's POS. Distributor agrees to
comply with all rules and regulations pertaining to such Marks prescribed by LDC
from time to time during the term of this Agreement. Any unauthorized use of the
Marks by Distributor, or any use not in compliance herewith, shall constitute an
infringement of the rights of LDC and its Affiliates in and to the Marks.
8.2 Use of Marks by Distributor. Distributor shall use the Marks with such
words qualifying or identifying the Distributor relationship of LDC and
Distributor as LDC from time to time reasonably prescribes. Distributor shall
not use the Marks as part of any corporate or trade name or with any prefix,
suffix or other modifying words, terms, designs or symbols, or in any modified
form, nor may Distributor use the Marks in connection with the sale of any
product or service other than the POS System or in any other manner not
expressly authorized by this Agreement or separately in writing by LDC.
Distributor agrees to display the Marks on stationery and other forms in the
manner prescribed by LDC, to give such notices of registration as LDC specifies
and to obtain such fictitious or assumed name registrations as may be required
under applicable law. Misuse of the Marks by Distributor may result in
termination of this Agreement.
8.3 Modification of Marks. If it becomes advisable at any time in LDC's
sole discretion for Distributor to modify or discontinue use of any Marks or
substitute one or more additional trade or service marks to identify its
relationship with LDC or any System Equipment, Distributor agrees to comply
therewith within a reasonable time after notice thereof by LDC.
8.4 Protection of Rights in the Marks. Distributor acknowledges the
ownership of LDC and its Affiliates in the Marks and agrees that it will not
during the term of this Agreement, or thereafter, attack the title or any rights
of LDC or its Affiliates in and to the Marks.
ARTICLE IX
RULES AND PROCEDURES
Distributor agrees to comply, as applicable, with all governmental rules,
and procedures applicable to the conduct of Distributor's business hereunder,
all of which shall constitute provisions of this Agreement as if fully set forth
herein. All references herein to this Agreement shall include all such rules and
procedures.
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ARTICLE X
COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES
10.1 Compliance with LDC Criteria, Laws and Regulations. Distributor shall
secure and maintain in force all licenses and permits required by Distributor
and its employees in the performance of its obligations under this Agreement and
shall conduct its business in full compliance with all laws, ordinances and
regulations applicable to Distributor's business. Distributor shall notify LDC
in writing within five (5) days of the commencement of any material action, suit
or proceeding, and of the issuance of any order, writ, injunction, award or
decree of any court, agency or other governmental instrumentality, involving
Distributor or any business conducted by Distributor.
10.2 Standards of Conduct. Distributor shall adhere to the highest
standard of honesty, integrity, fair dealing and ethical conduct in all dealings
while distributing the POS System hereunder. Distributor agrees to refrain from
any business or advertising practice which may be injurious to the business of
LDC and the goodwill associated with the Marks.
ARTICLE VIIII
RELATIONSHIP OF LDC AND DISTRIBUTOR
11.1 Independent Contractor Relationship. LDC and Distributor acknowledge
and agree that Distributor is an independent contractor and that the
relationship arising from this Agreement does not constitute or create a general
agency, joint venture, partnership, employment relationship or franchise between
Distributor and LDC. In all dealings with third parties, Distributor shall
conspicuously identify itself as a Distributor of LDC and otherwise as an
independent business. Distributor's sole authority under this Agreement is to
distribute the POS System to Retail Dealers, and LDC has not authorized or
empowered Distributor to execute contracts on behalf of, or to bind LDC or its
Affiliates, in any way.
11.2 No Authority to Bind LDC. LDC shall not be obligated by or have any
liability under any agreements or representations made by Distributor that are
not expressly authorized by LDC in writing, nor shall LDC be obligated for any
damages to any person or property directly or indirectly arising out of the
business conducted by Distributor pursuant hereto, whether caused by
Distributor's negligent or willful action or failure to act.
11.3 No Proprietary Rights to Distributor. Distributor acknowledges that
nothing herein gives it any right, title or interest in the POS System, LDC's
Software or the Marks except for Distributor's limited express rights pursuant
to Article II of this Agreement. Distributor further acknowledges and agrees
that LDC maintains exclusive ownership of the POS System, LDC's Software (both
object code and source code) and the Marks, including, without limitation, any
and all worldwide copyrights, patents, trademarks, service marks, trade names,
trade secret, proprietary and confidential information rights and other property
rights associated with the POS System, LDC's Software and the Marks.
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ARTICLE IXI
DISTRIBUTOR'S PERSONNEL NOT LDC'S EMPLOYEES
The parties agree that personnel employed by Distributor to perform
services under this Agreement are not LDC employees or agents and Distributor
assumes full responsibility for their acts. Personnel employed by Distributor
and subcontractors of Distributor shall be informed that they are not entitled
to the provisions of any of LDC's employee benefits. With respect to such
personnel, Distributor shall have sole responsibility for supervision, daily
direction and control. Distributor shall be responsible for worker's
compensation, disability benefits, unemployment insurance and withholding and
remitting income and social security taxes for said personnel, including
contributions from them as required by law.
ARTICLE XI
NO TRANSFER OR ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder may be
transferred or assigned by Distributor, directly, indirectly or by operation of
law, without the prior written approval of LDC, which may be given or withheld
in LDC's discretion. Any assignment or transfer without approval of LDC shall
constitute a breach hereof and convey no rights or interests herein.
ARTICLE XIV
TERM OF DISTRIBUTOR RELATIONSHIP
The term of this Agreement shall commence on the date of execution by LDC
as set forth below and shall continue until terminated by one of the parties
hereto as set forth in Article XV. This Agreement shall be effective only after
its execution by authorized officers of Distributor and LDC.
ARTICLE XII
TERMINATION OF AGREEMENT
15.1 Termination for Cause. In addition to other rights of termination set
forth in this Agreement, LDC shall have the right to terminate this Agreement
for cause effective upon delivery of notice of termination to Distributor, if
Distributor (or one or more of its owners or Affiliates):
A. engages in fraud, misrepresentation, dishonesty, non-payment of
monies owed LDC pursuant to Section 7.3 hereof, or is convicted of or pleads no
contest to a felony or other crime or offense that is likely to adversely affect
the reputation of LDC or its Affiliate companies or the goodwill of the Marks;
B. makes or attempts an unauthorized transfer or assignment of this
Agreement;
C. fails to comply with any material provision of this Agreement,
and such failure is not corrected within thirty (30) days after written notice
of such failure to comply is delivered
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to Distributor; or fails on two or more separate occasions within any period of
six (6) consecutive months to comply with any material provision of this
Agreement, whether or not such failures to comply are corrected after notice
thereof is delivered to Distributor.
15.2 Termination by Either Party. Either party shall have the right to
terminate this Agreement effective upon written notice to the other if:
A. the other party makes an assignment for the benefit of
creditors;
B. a court order under the U.S. Bankruptcy Code is entered
against the other party;
C. a trustee or receiver of a substantial part of the other
party's assets is appointed by a Court; or
D. one party gives one-hundred eighty (180) days advanced written
notice of termination to the other party.
ARTICLE XIIII
EFFECT OF TERMINATION OR EXPIRATION
16.1 Provided this Agreement is not terminated by LDC pursuant to either
Sections 15.1.A or B, if requested by Distributor, LDC will continue to provide
to Distributor Accounts in existence on the date of termination Processing
Services from the date of termination of this Agreement for six (6) months after
the termination date (the "Extended Services"); provided, however, the provision
of the Extended Services shall be subject to prompt payment of Processing Fees
and governed by the terms of this Agreement. Further, the parties may agree in
writing to extend the term of the Extended Services.
16.2 Upon expiration or termination of this Agreement for any reason,
Distributor shall pay LDC for all Processing Services and any additional
services performed in accordance with the term of this Agreement through the
date of such expiration or termination and/or the Extended Services Period
without set off, in addition to any other amounts owed or determined to be owed
to LDC.
16.3 Upon expiration of this Agreement or termination of this Agreement,
Distributor will have no further right to distribute or use the POS System
except as provided in Section 16.1.
16.4 Distributor agrees that upon the expiration or termination of this
Agreement for any reason, Distributor and its Affiliates will: (a) cease using
the Marks and not thereafter use any actual or similar Marks; and will not
utilize for any purpose any actual or similar trade name, trade or service xxxx
or other commercial symbol or in any manner, identify itself or any business as
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associated with LDC or an Affiliate of LDC; (b) return to LDC any demonstration
terminals in Distributor's possession and all advertising and marketing
materials, forms, Marks or otherwise identifying or relating to LDC's POS System
business; and (c) comply with the provisions of this Agreement which survive
termination hereof.
ARTICLE XIVI
EXCLUSIVE WARRANTIES AND LIABILITY LIMITATIONS
17.1 System Equipment. LDC warrants that each LDC POS terminal will be
free from defects in workmanship and materials for one (1) year after the date
of first use of the LDC POS terminal by the Account to whom the terminal is
delivered. LDC makes no warranty as to third party equipment or products
included with the System Equipment and LDC's sole obligation with respect to
such third party equipment or products will be to pass through the
manufacturers' warranties and indemnities with respect thereto where applicable.
Should any of the System Equipment fail within this warranty period, LDC's sole
obligation will be to repair or replace, at its discretion, the defective System
Equipment. Replacement System Equipment may be refurbished or contain
refurbished materials. LDC will ship replacement System Equipment to Distributor
and/or Distributor Accounts upon request at Distributor's expense within two (2)
days from LDC's determination of a terminal failure. This warranty does not
apply if the System Equipment fails or is damaged after delivery due to
shipment, handling, storage, has been damaged by accident, abuse or misuse, has
been used or maintained in a manner not conforming to applicable System
Equipment manual instructions, has been modified in any way, or has had any
serial number removed or defaced. Repair by anyone other than LDC or an approved
agent will void this warranty.
17.2 Software. LDC warrants for a period of one (1) year after date of
first use of the System Equipment that the Software included therein shall be
free from material defects in material and workmanship, and shall conform in all
material respects to the specifications contained in any System Documentation
relating to such Software for up to 6 products, 2 languages per product and 200
pins (the "Specifications"). The foregoing warranty will be void if there are
any modifications or changes made to the Software that are not made by LDC or
any subcontractor thereof. The Software is not warranted to perform in
accordance with the Specifications to the extent that such Software is not being
used in accordance with any user manual or other written System Documentation or
instructions issued by LDC. Should LDC breach the warranty set forth above, LDC
shall promptly correct the reported defect by modifying either the Software or
the applicable user instructions, as the case may be. If, within a reasonable
period of time, LDC is unable to correct any such breach relating to Software in
the manner described above, and should any such defective Software provided by
LDC cause a material portion of the Software providing significant and
substantial functionality to fail in its essential purpose and should LDC be
unable to cure such defect as provided above, Distributor may return all such
System Equipment containing such defective Software and then shall be entitled
to terminate Distributors obligation to pay Charges with respect to any such
System Equipment containing such defective Software under this Agreement.
17.3 WARRANTY DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH ABOVE IN THIS
ARTICLE XVII, THIS AGREEMENT EXCLUDES AND LDC HEREBY
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SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE SYSTEM EQUIPMENT OR SOFTWARE PROVIDED HEREUNDER,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
THOSE ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE.
17.4 Limitation on Direct Damages. In no event will LDC's total aggregate
liability to Distributor for direct damages from any and all claims of any kind
arising out of or relating to this Agreement, whether based on contract, tort
(including, without limitation, strict liability or negligence), warranty, or
any other ground exceed, during any calendar year or portion thereof during the
term of this Agreement, fifty percent (50%) of the aggregate amount of Charges
previously paid by Distributor to LDC under this Agreement in the previous
consecutive twelve (12) month period immediately prior to the date on which such
claim or claims are made.
17.5 EXCLUSION OF CONSEQUENTIAL DAMAGES. IN NO EVENT UNDER THIS AGREEMENT
OR OTHERWISE WILL LDC BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES WHICH MAY ARISE OUT OF THE INSTALLATION OR
OPERATION OF THE POS SYSTEM OR SYSTEM EQUIPMENT OR THE PERFORMANCE OR
NONPERFORMANCE OF ANY OF LDC'S OBLIGATIONS UNDER THIS AGREEMENT EVEN IF LDC HAS
BEEN ADVISED OF, KNEW OF OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH
DAMAGES.
ARTICLE XVI
CONFIDENTIALITY.
18.1 Trade Secrets and Confidential Information. LDC, its affiliates and
subcontractors (hereinafter, for purposes of this Article XVIII, individually
and collectively referred to as "LDC"), and Distributor, its affiliates and
agents (hereinafter, for purposes of this Article XVIII, individually and
collectively referred to as "Distributor") each acknowledge that the other party
possesses or will have access to and will continue to possess and have access to
information which has commercial value in its business and is not in the public
domain. "Trade Secrets" means information without regard to form related to the
services or business of the disclosing party which (a) derives economic value,
actual or potential, from not being generally known to or readily ascertainable
by other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of efforts by the disclosing party that are reasonable under
the circumstances to maintain its secrecy, including without limitation (1)
marking any information reduced to tangible form clearly and conspicuously with
a legend identifying its confidential or proprietary nature, (2) identifying any
oral presentation or communication as confidential or secret immediately before,
during or after such oral presentation or communication, or (3) otherwise
treating such information as confidential or secret. Trade Secrets include, but
are not limited to, computer programs and software, source codes, object codes,
technical and non-technical data, formulas, patterns, compilations, devices,
drawings, processes, methods, techniques, designs, programs, financial plans,
product plans, and lists of actual or potential customers and suppliers which
are not commonly known by or available to the public. "Confidential Information"
means any and all proprietary business information of the
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Confidential
disclosing party treated as secret by the disclosing party, even though such
information may not constitute a Trade Secret, including, without limitation,
any and all proprietary information of such party of which the receiving party
becomes aware as a result of its access to and presence at the other party's
facilities. "Company Information" means collectively the Confidential
Information and Trade Secrets of the disclosing party.
18.2 Obligations.
A. Distributor and LDC shall each refrain from disclosing, will hold as
confidential and will use the same level of care to prevent disclosure to third
parties, the Company Information of the other party as it employs to avoid
disclosure, publication or dissemination of its own information of a similar
nature but in no event less than a reasonable standard of care.
B. Neither Distributor nor LDC shall use the Company Information of the
other party, except as specifically permitted in this Agreement.
C. In no event shall Distributor itself or through inducement of another
attempt to or otherwise engage in any activity that would constitute or result
in a reverse engineering of LDC's technology encompassed in the POS System,
including hardware that constitutes part of the system Equipment or Software.
D. Without limiting the generality of the foregoing, neither party will
publicly disclose the terms of this Agreement without the prior written consent
of the other. Furthermore, neither LDC nor Distributor will make any use of
Company Information of the other party except as contemplated by this Agreement;
acquire any right in or assert any lien against the disclosing party's Company
Information except as contemplated by this Agreement; or refuse to promptly
return, provide a copy of or destroy such Company Information upon the request
of the disclosing party. Notwithstanding any of the foregoing, LDC and
Distributor shall be permitted to make such disclosures of this Agreement as may
be required by law.
18.3 Exclusions. Notwithstanding the foregoing, this Article XVIII
will not apply to any information which LDC or Distributor can demonstrate was:
(a) at the time of disclosure, in the public domain; (b) after disclosure,
published or otherwise became part of the public domain through no fault of the
receiving party; (c) without a breach of duty owed to the disclosing party, is
in the possession of the receiving party at the time of disclosure; (d) received
after disclosure from a third party who was under no duty of confidentiality and
had a lawful right to disclose such information; or (e) independently developed
by the receiving party without reference to Company information of the
disclosing party. Further, either party may disclose the other party's Company
Information to the extent required by law, order of court, or government
regulation and, in such event, the disclosing party shall, as soon as is
reasonably possible after learning of such a requirement of disclosure, and a
reasonable time prior to making such disclosure, give the other party notice of
such requirement of disclosure.
18.4 Limitations.
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Confidential
A. During the Term of the Agreement, the covenants of confidentiality
set forth herein shall: (a) apply after the date of this Agreement to any
Company Information disclosed to the receiving party before or after the date of
this Agreement; and (b) continue and must be maintained from the date of this
Agreement through the termination of this Agreement.
B. Subsequent to the Agreement's termination, irrespective of the method
of such termination: (a) with respect to Trade Secrets, the parties shall
maintain the confidentiality of such Trade Secret information for so long as
such retains the status of a Trade Secret under applicable law, irrespective of
the Term of this Agreement; and (b) with respect to Confidential Information,
the parties shall maintain the confidentiality of such Confidential Information
for a period equal to the shorter of three (3) years after termination of this
Agreement, or until such Confidential Information no longer qualifies as
confidential under applicable law. Notwithstanding anything herein to the
contrary, if a party is in possession of Confidential Information that
constitutes patient medical records, then such person shall keep such
Confidential Information in confidence and not destroy such Confidential
Information for the the Period required by applicable law.
ARTICLE XIX
INDEMNIFICATION
19.1 Indemnification of LDC. Distributor agrees to indemnify, defend and
hold LDC harmless against any liability, loss, damage or expense (including
reasonable attorney's fees) for any claims or demands arising out of the conduct
of business by Distributor that are the result of Distributor's gross negligence
or willful act or failure to act, including, but not limited to, any claims or
demands (a) by Distributor's agents, employees or any other persons, for bodily
injury, damage to property or other damages caused by the acts or omissions of
the Distributor or its subcontractors, or the employees or agents of any of
them, and (b) by Distributor's employees under worker's compensation or similar
laws; (c) for failure of Distributor to timely and/or properly pay all federal,
state and local income, withholding or other taxes applicable to Distributor or
the performance by Distributor of its rights or obligations hereunder; or (d)
any product liability or other tort claims for any Products sold through the POS
System not sold to Distributor by LDC.
19.2 Indemnification of Distributor. Subject to the limitations of Article
XVII, LDC agrees to indemnify, defend and hold Distributor harmless against any
liability, loss, damage or expense (including reasonable attorney's fees) for
any claims or demands arising out of the conduct of business by LDC that are a
result of LDC's gross negligence or willful acct or failure to act, including
but not limited to, any claims or demands by LDC's agents, employees or any
other persons, for bodily injury, damage to property or other damages caused by
the acts or omissions of LDC or its subcontractors or the employees or agents of
any of them.
19.3 Procedures with Respect to Indemnification. All indemnities created
in this Agreement shall include indemnification of LDC's and Distributor's
Affiliates, directors, officers, employees, agents, successors and assigns and
the heirs, legal representatives, and assigns thereof. The indemnification shall
be for all claims arising out of the specific event referred to in this
Agreement which is covered by the indemnification, including costs reasonably
incurred in the defense of any claim, including without limitation accountant's,
attorneys', and expert witness fees,
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Confidential
-----------------------------
If to LDC: LDC Direct, Ltd. Co.
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: President
20.7 Entire Agreement. This Agreement, including the preambles and
exhibits, if any, sets forth the entire Agreement between the parties as to the
subject matter hereof and merges all prior discussions between them, and neither
of the parties shall be bound by any conditions, definitions, understandings, or
representations with respect to such subject matter other than as expressly
provided herein, or as duly set forth subsequent to the effective date hereof in
writing and signed by the duly authorized representatives of both parties.
20.8 Severability. In the event any one or more provisions of this
Agreement are found by a court of competent jurisdiction to be illegal or
unenforceable, such provisions shall be severed from this Agreement and all
other provisions of this Agreement shall continue in full force and effect.
20.9 No Waiver. The provisions of this Agreement may not be waived except
in writing and signed by both parties. No waiver of any provision hereof shall
be deemed a continuing waiver, nor shall any delay or failure to exercise any
right or remedy be deemed a waiver thereof.
IN WITNESS WHEREOF the parties hereto have executed, sealed and delivered
this Agreement in one or more counterparts on the day and year first above
written.
"LDC": "DISTRIBUTOR":
LDC DIRECT, LTD. CO. Q Comm, Inc.
---------------------------
BY: BY: /s/ Xxxx Xxxxxx
-------------------------- -----------------------
NAME: NAME: Xxxx Xxxxxx
------------------------ ---------------------
TITLE: TITLE: C.E.O.
----------------------- --------------------
DATE: DATE: 7/6/99
------------------------ ---------------------
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Confidential
EXHIBIT A
TO
LDC DIRECT
DISTRIBUTOR AGREEMENT
SCHEDULE OF CHARGES
POS Terminal:
--------------------------------------------------------------------------------
Number Of Units Per Unit Price
--------------- --------------
--------------------------------------------------------------------------------
1-3 $540
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4-25 $520
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26-50 $480
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51-100 $420
--------------------------------------------------------------------------------
101-200 $370
--------------------------------------------------------------------------------
201-300 $340
--------------------------------------------------------------------------------
301-400 $320
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401-500 $305
--------------------------------------------------------------------------------
Over 1000 $295
--------------------------------------------------------------------------------
The above pricing applies to purchase orders for terminals received as of the
date of this Agreement.
POS Terminal Stand:
$10 each
POS Card / Display Stand:
$15 each
Charges for Processing Services:
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Confidential
A per transaction fee for Processing Services based on the following chart
will apply to each transaction utilizing all or any part of the POS System:
--------------------------------------------------------------------------------
Product Pricing
--------------------------------------------------------------------------------
Prepaid Products $.10 per transaction plus .5% of the
retail value of the transaction
--------------------------------------------------------------------------------
Notwithstanding the foregoing, LDC shall have the right to charge a minimum fee
for Processing Services of $5.00 per month for each installed terminal. Listed
Charges for Transaction Fees only pertain to products listed and Charges for
Transaction Fees for other products shall be determined by LDC prior to
commencing Transaction Services for any Retail Dealer with respect to any such
additional products. All Charges are subject to revision by LDC as set forth in
Section 4.1.A of the Agreement.
Charges for Implementation Services:
LDC will make available technical assistance for set-up, installation and
programming at the rate of $100.00 per hour.
Charges for Retail Dealer Help Desk Services:
Program in development. Will be offered to all distributors and agents on
same standard plan.
Extended Warranty
Program in development. Will be offered to all distributors and agents on
same standard plan.
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