IC One/GC-Apt
MARKETING AGREEMENT
THIS MARKETING AGREEMENT (the "Agreement"), dated effective as of August 6, 1999
(the "Effective Date") is by and between IC One, Inc., a Delaware corporation
with its principal place of business at 000 Xxxx 000 Xxxxx, Xxxxx 000 ("IC One")
and Global Capital Limited, a Nevada Limited Liability Company, and/or its
assigns with its principal place of business at 0000 X. Xxxxxxxxx, Xxx Xxxxx,
Xxxxxx 00000 ("Global").
RECITALS:
A. IC One is in the business of research, development, and implementation of
loyalty and incentive purchase programs, card enhancement and value added card
services, utilizing smart card funds transfer technology ("IC One Systems and
Services").
B. Global is in the business of the development and implementation of
advertising concepts that effectively lower the two highest costs for apartment
owners and property management firms: tenant acquisition and tenant-turn-over.
C. Global is interested in incorporating into a "Business Case" the IC One
Systems and Services specific to Global's current and prospective apartment
communities as described in the attached Appendix A which is made a part hereof.
D. Global does not currently own any "Business Cases" or technology relating to
smart cards or "loyalty"-incentive programs.
AGREEMENTS:
In consideration of the mutual covenants and agreements set forth herein, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Definitions.
1.1 "Marketing Rights" shall mean the right to use, incorporate,
integrate, and/or engage the business of companies specific to Global's
apartment communities who are interested in benefiting from IC One
Systems and Services.
1.2 "Business Case" shall mean any "loyalty"-incentive program
developed and owned by Global for installation in an apartment
community for the purpose of lowering the two highest costs for
apartment owners and property management firms: tenant acquisition and
tenant-turn-over; and promoting use of the card, including monthly-rent
payments by tenants; or for any other "Business Case" or application
developed and implemented by Global for the express purpose of
increasing IC One Smart Card distribution and usage.
1.3 All other initially capitalized terms shall have the meanings
assigned to them in this Agreement.
2. Consideration. In consideration of the covenants, warranties and
commitments made by IC One and Global in this Agreement, the Parties agree as
follows:
2.1 Marketing Performance Obligations. IC One agrees to provide Global
the necessary portions of IC One Systems and Services for Global's
current and prospective apartment communities, for the purpose of
providing IC One and Global with viable economic benefit. IC One has
agreed to enter into this Marketing Agreement with Global, based upon
Global's representation of its ability to deliver to IC One
economically viable business opportunities In the event Global is
unable to deliver to IC One, within 120 days of the Effective Date of
this agreement an economically viable business opportunity, or is
unable to perform in accordance with the performance criteria as
outlined in the attached Appendix B, which is made a part hereof, IC
One has the right, unilaterally, to void this Agreement. Every 90 days
thereafter, the Parties shall mutually determine, using reasonable
standards, Global's performance under this Agreement.
2.2 IC One Performance Obligations. IC One agrees to make available,
following reasonable time to develop, the necessary technology,
including reasonable support and service required to allow Global to
create its own proprietary Business Case applications. Any such
technology made available to Global will remain the sole property of IC
One, and all smart-card transactions resulting from the use of IC One's
technology, whether directly or indirectly, will be processed by IC
One, unless otherwise mutually agreed by both parties. IC One also
agrees to make available the necessary marketing support to Global,
including but not limited to training, customer service, marketing
materials, and program endorsement references. Any costs associated
with marketing materials, support, or development of Global's programs
will be born by Global. Certain mutually determined development will be
billed to Global on a cost plus basis with a portion to be paid up
front. IC One excludes and disclaims all warranties, whether express or
implied, including without limitation, warranties of merchantability
and fitness of IC One Systems and Services for a particular purpose.
2.3 Card and Equipment Purchase Obligations. Global agrees to purchase
from or through IC One, as defined in Appendix B, all cards and card
acceptance devices (CADs) required for each business application Global
engages the IC One Systems and Services. Global shall install and
service all CADs required for each business application Global engages
the IC One Systems and Services. Global and IC One agree to cooperate
in a spirit of teamwork in the purchase, development
and implementation of cards and CADS, includingg PC access devices and
tv-set top boxes.
2.4 Compensation Schedule. IC One and Global agree to share fees
charged to Global's Clients in accordance with the schedule as outlined
in the attached Appendix C, which is made a part hereof. Any additional
revenue opportunities not addressed in Appendix C, shall be arranged
and mutually agreed upon by both parties prior to receipt thereof All
payments shall be accompanied by a reasonably detailed report,
describing the services and/or products employed in the transaction(s)
as well as the calculation used to determine the payment.
2.5 Payment. IC One and Global shall determine compensation by way of
mutual written agreement subject to and prior to each business
opportunity brought to IC One by Global. In the event Global or IC One
agrees to pay the other in a transaction(s), the paying party's payment
shall be accompanied by a reasonably detailed report, describing the
services and/or products employed in the transaction(s) as well as the
calculation used to determine the payment. Settlement and payments
under all programs shall occur at least every 30 days.
2.6 Audit Rights. The Parties shall keep accurate books of account and
records covering all transactions relating to this Agreement. The party
receiving a payment from the other party shall have the right, upon ten
(10) business days prior written notice and during reasonable business
hours, to have a certified public accounting firm examine the paying
party's records relating to the transaction(s). The receiving party
shall bear the cost of such inspection and audit unless the results of
such audit indicate underpayments of more than five percent (5%) for
the period under review, in which case the reasonable cost of the audit
will be borne by the paying party. Such audits may be made no more
frequently than once every three (3) months, unless the preceding audit
revealed a material underpayment. All relevant records including
Global's client base and database records shall be kept available for
at least two (2) years after the calendar month to which they relate.
2.7 Term. The term of this Agreement shall be three (3) years from the
Effective Date, unless either party fails to perform their obligations
under this Agreement, in which case, the party that has not failed may
terminate this Agreement. The Term shall be automatically extended for
consecutive one-year periods following the end of the first three-year
term if Global demonstrates, and IC One agrees, that Marketing
Performance Obligations of Global have been met or exceeded.
3. Covenant Not to Compete. The parties hereby covenant and agree that
for the term of this Agreement, and for a period of one (1) year thereafter,
they will not, directly or indirectly, without the prior written consent of the
other party, develop, market, sell, or assist in the development, marketing or
sale, of any product or technology that competes with the other party, as
relating to existing clients under contract at the expiration of this
noncompete period (a "Competitive Product"), including without limitation,
providing consultative services, owning, managing, operating, participating in,
controlling, or being, connected as a majority stockholder, partner, or
otherwise with any business, individual or entity that creates, develops or
markets a Competitive Product, including any such actions by its officers,
directors and/or key employee(s). If the agreement is terminated, the parties
may continue in their respective businesses as constituted at the time of
termination.
4. IC One/Global ("the Parties'") Warranties.
4.1 Corporate Power, Etc. The Parties hereby represent, warrant, and
covenant to each other that (a) each party has all necessary right and
power to enter into and perform according to the terms and conditions
of this Agreement; (b) all corporate action on the part of the Parties,
its respective directors and its stockholders necessary for the
authorization, execution, delivery and performance of this Agreement
and any other agreements contemplated hereby has been taken: (c) the
terms of this Agreement do not violate or conflict with any other
agreement or obligation of the Parties; and (d) this Agreement is a
valid and binding agreement on the Parties, enforceable in accordance
with its terms.
4.2 Litigation. There is no action, suit, investigation, or other
proceeding pending or, to the Parties' knowledge, threatened against or
materially adversely affecting the Parties' right and ability to
consummate the transactions contemplated by this Agreement; nor do the
Parties know or have reason to know of any basis for the same.
4.3 Infringement. IC One warrants that the Marketing Rights and
elements thereof are solely owned by IC One and do not violate any
rights of any third party, and that it has not received any notice of
such a claim. To IC One's best knowledge, no third party is infringing
or has infringed any rights with respect to the Marketing Rights.
4.4 Survival. The representations, warranties and covenants contained
in or made pursuant to this Agreement shall survive execution and any
termination of this Agreement.
5. Confidentiality. The parties agree to treat as highly confidential, and
never to use, copy or disclose to any third party, except as required by law,
any source code, trade secrets, client or client-database information. IC One
agrees that any intellectual property designed, developed and created by Global
to increase card distribution and promote cardholder usage is the sole property
of Global and its affiliates, including Rent Smart Publications. Notwithstanding
the status of this Agreement, the client base resulting from the distribution
efforts and card-usage promotion of Global is the sole property of Global and is
subject to the confidentiality intent of this paragraph.
6. Breach of Agreement; Remedies. If either party believes that the other
has materially breached any provision of this Agreement, the party alleging the
breach shall deliver notice to the other party, specifying the nature of the
alleged breach. The party alleged to be in breach shall have sixty (60) days
from the date of mailing of such notice in which to attempt to cure the alleged
breach. During such sixty (60) day period, either party may request a personal
meeting between the parties in which to negotiate in good faith to attempt to
resolve the dispute. If such negotiations are unsuccessful and the alleged
breach has not been cured by the end of such sixty (60) day period, the party
alleging the breach may pursue any and all rights and remedies that it has under
this Agreement, at law or in equity. The parties agree that the remedy at law
for any breach of its covenant not to compete and its covenant of
confidentiality shall be inadequate and that irreparable harm shall be presumed,
and the other party shall be entitled to injunctive relief, in addition to any
other remedy it might have, including damages and the right to recover
reasonable attorneys' fees, if it becomes necessary for the injured party.
7. Rights Reserved; Reasonable Efforts to Market. Global shall have the
right to market the IC One Systems and Services as outlined in Section 2.
Nothing in this Agreement shall impair IC One's right to acquire, license.
independently develop for itself, or have others independently develop for it,
similar products performing the same or similar functions as IC One Systems and
Services, or to provide Marketing Rights to others not infringing upon Global's
specific Apartment communities or other proprietary Business Case programs
designed specifically for implementation by Global. Global is required to use
best efforts to develop business opportunities, market and promote the IC One
Systems and Services, in general, in both U. S. and international markets.
8. LIMITATION OF LIABILITY AND DAMAGES. OTHER THAN AS SET FORTH ELSEWHERE
IN THIS AGREEMENT, EACH PARTY EXPRESSLY EXCLUDES AND DISCLAIMS ALL WARRANTIES,
WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THIS AGREEMENT.
9. Miscellaneous.
9.1 Notice. All notices between the parties shall be in writing and
shall be sent by certified or registered mail or commercial overnight
delivery service, with provisions for a receipt, or by confirmed
facsimile transmission, to the address of the other party listed above
(or to such other address as a party may furnish to the other in
writing).
9.2 Entire Agreement, Amendment; Waiver. This Agreement and any
additional documents required to be delivered hereunder, constitutes
the complete
agreement between the parties and supersedes all previous
representations, written or oral, with respect to the IC One Systems
and Services or other subject matter of this Agreement. Except as
otherwise expressly provided herein, this Agreement may be modified or
amended only by a writing signed by duly authorized representatives of
both parties. The waiver by either party of any default or breach of
this Agreement, or any obligation hereunder, shall be ineffective
unless in writing, and shall not constitute a waiver of any subsequent
breach or default. No failure to exercise any right or power under this
Agreement or to insist on strict compliance by the other party shall
constitute a waiver of the right in the future to exercise such right
or power or to insist on strict compliance.
9.3 Governing Law and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the internal laws of the state of Utah
and applicable federal laws. The parties consent to the exclusive
jurisdiction and venue of Utah state and federal courts in any action
arising out of this Agreement.
9.4 Attorneys' Fees. In the event of any default under this Agreement,
the defaulting party shall pay all costs incurred by the other party by
reason of the default, including court costs and reasonable attorneys'
fees (whether or not the attorney is a salaried employee of the
non-defaulting party), and also, including such expenses incurred
before legal action or bankruptcy proceeding, during the pendency
thereof; and continuing, to all such expenses in connection with
appeals to higher courts. If the attorney is a salaried employee of the
non-defaulting party, a reasonable attorney fee shall be an amount
charged by similarly qualified attorneys in private practice for
similar services. If a party is accused of default by the other, but
there is a final decision by a court of law, not overturned on appeal.
that the party did not default as alleged, the party wrongly accused of
default shall be entitled to an award of its costs and reasonable
attorneys' fees as described above.
9.5 Cumulative Remedies. All rights and remedies provided in this
Agreement, at law or in equity are cumulative.
9.6 Severability. If any term of this Agreement is held invalid or
unenforceable by a court or arbitrator of competent jurisdiction,
including without limitation the term and geographic scope of the
covenant not to compete, such term shall be reduced or otherwise
modified by such court or arbitrator to the minimum extent necessary to
make it valid and enforceable. If such term cannot be so modified, it
shall be severed and the remaining terms of this Agreement shall be
interpreted in such a way as to give maximum validity and
enforceability to this Agreement.
9.7 Binding Effect, Assignment. This Agreement is binding upon the
parties and their respective successors, representatives and assigns;
however, neither party may assign or transfer this Agreement or any of
his rights or duties hereunder without prior written consent of the
other party, which shall not be unreasonably
withheld. In the event of bankruptcy by either party, the rights and
privileges provided for in this Agreement shall remain in effect.
9.8 Language. The language used in this Agreement shall be deemed to be
the language chosen by the parties to express their mutual intent, and
no rule of strict construction shall be applied against either party.
9.9 Force Majeure. Neither party shall be liable for any failure or
delay in performing, hereunder, if such failure or delay is due to war,
strike, government requirements, acts of nature, acts or omissions of
carrier, or other cause(s) beyond its reasonable control.
9.10 Counterparts. This Agreement may be executed in counterparts, and
all counterparts shall be deemed to be one and the same agreement.
9.11 No Agency. This Agreement shall not be construed to create any,
agency or partnership between the Parties. Neither party has authority
to bind the other, to incur any liability or act on behalf of the
other, or to direct the others employees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
Global Capital Limited, LLC IC One, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxxx
--------------------------- ---------------------
Print Name: Xxxxxxx X. Xxxxxxx Print Name: Xxxx Xxxxxxx
Title: Managing Director Title: President & CEO
Date: 8/6/99 Date: 8/6/99
Appendix A
Global Capital Limited (Global) through its affiliate, Rent Smart Publications
is currently performing advertising services for numerous apartment communities.
Tile intent of this Marketing Agreement is to make available to those same
apartment communities and others a Business Case that includes the 'Loyalty'
features of IC One's smart-card technology. Over $1.2 million dollars has been
spent developing and testing the Rent Smart Publication, an advertising medium
for apartment communities in two test markets. Las Vegas and Phoenix, comprising
210 communities at an average of 300 units per community. The Rent Smart
Publication is currently slated to be introduced into 18 additional markets over
the next 36 months. The intent of Global and IC One is to coordinate and
cooperate in the introduction of the Rent Smart Publication along with the `Rent
Smart Card' into the anticipated markets in an attempt to increase the
efficiency of the card distribution and 'merchant sign-up' process in those
markets.
Appendix B
Within the first 12 months Global will produce 150,000-200,000 cards and set top
boxes or other `access devices'; and within the first 36 months, Global will
produce a minimum of 1,500,000-2,000,000 cards and set top boxes or `access
devices'. The cost per card to Global shall be IC Ones total hard costs per card
plus 25 percent. The cost for CADs, set top boxes or any other 'access device'
shall not exceed IC One's total hard costs per CAD or device plus 15 percent.
Thereafter, costs and performance criteria will be reviewed and mutually agreed
upon on an annual basis. Global agrees to keep IC One updated on a monthly basis
the distribution projections for smart cards.
Appendix C
For all Global programs using smart cards, a transaction fee of 1/2 percent of
the total amount of each transaction shall be paid to IC One. In addition, and
in the event Global participates in the IC Kids Card program, IC One shall
receive 11 percent of the total loyalty contribution amount with the balance to
be distributed between Global arid the beneficiaries. Compensation from Global's
participation in all other IC One-sponsored loyalty programs will be determined
mutually between Global and IC One prior to execution. All sign-up fee revenues
shall go to Global. Notwithstanding the status of this Agreement and unless by
the written and mutual consent to the contrary. Global's income rights and
participation from the card usage by Global's clients is perpetual.
