Contract Services Agreement
THIS CONTRACT SERVICES AGREEMENT (this "Agreement") is entered into effective
as of April 24, 2001 (the "Effective Date") by and between The Gift
Certificate Company ("TGCC"), a wholly owned subsidiary of NBO, Inc., a Utah
corporation, with its principal place of business at 0000 X. Xxxxxxxxxx Xxx,
Xxxxxxxx X, Xxxx Xxxx Xxxx, Xxxx 00000 and the Prime Outlets of Grove City,
("Customer") a Delaware limited partnership with it's principle place of
business at 000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx. TGCC and
Customer are sometimes referred to herein as a "Party" and collectively the
"Parties".
a. TGCC is in the business of developing, marketing, owning and
operating distribution systems for gift cards, gift certificates, gift
rights, vouchers, and other instruments allowing the giving of a right to
receive a credit toward the purchase of merchandise, (collectively "Mall Gift
Certificates").
b. Customer is in the business of owning, operating and managing
regional shopping centers known as (the "Properties").
c. The Parties desire to enter into a relationship whereby TGCC will
make available to and install its gift certificate distribution machine (a
"Counter Top Unit"), provide Call Center fulfillment via toll-free telephone
and establish Internet fulfillment, (the "System") for the Properties and to
provide services associated therewith, as further described in this
Agreement.
NOW, THEREFORE, In consideration of the premises set forth above, the
mutual promises, covenants, agreements and benefits set forth herein below,
and for other good and valuable consideration, the Parties agree as follows:
1. RIGHTS AND OBLIGATIONS OF CUSTOMER.
a. Distribution. Customer hereby grants to TGCC the exclusive right
to offer and issue Mall Gift Certificates, via the counter top unit,
telephone, and through the Internet from either the mall's website or through
TGCC's website. The Mall Gift Certificates shall be redeemable at all retail
establishments located within the Properties.
b. Utility Access and Service. Customer will provide, or cause to be
provided, at points in the Customer's "Customer Service Booth" the facilities
necessary to enable TGCC to obtain and maintain for the System, the
electricity and telephone service (the "Utility Services") required for its
operation, as specified on Addendum A, Part I. The installation of such
services and all on-going fees will be at Customer's sole cost and expense.
Such installation shall include coordination with TGCC.
c. Advertising. Customer agrees to advertise the Mall Gift
Certificates at the Property and assist TGCC in the advertising and promotion
of the Mall Gift Certificates to the tenants, prospective tenants, individual
and corporate customers of the Property.
d. Maintenance and Training. Customer will provide, at no cost to
TGCC, the personnel necessary to (i) periodically monitor the inventory of
blank gift certificate stock, (ii) restock the blank gift certificate paper
stock as needed and (iii) notify TGCC or its designated agent of any
malfunction with, or damage to the System or any component thereof. In
addition, Customer's personnel will cooperate with TGCC in performing TGCC's
periodic maintenance and diagnostic procedures on the Counter Top Unit to
determine if and when any periodic or preventative maintenance is needed or
if a TGCC designated service organization should be called. TGCC will
provide, or cause to be provided, all necessary maintenance and repair within
twenty-four (24) hours of Customer's request. Customer agrees to make
available at the property personnel to assist users of the System in
purchasing Mall Gift Certificates at the customer service counter. TGCC will
provide training to personnel.
e. Financial Responsibility. Customer accepts full financial
responsibility for the collection of all funds associated with the issuance
of Mall Gift Certificates at the TGCC Counter Top Unit. At the conclusion of
each business day, Customer will assure that the amounts collected for such
business day are deposited in (The "Depository Account") (whether by cash or
credit/debit card funds) and will assure the amounts deposited, plus amounts
in transit from credit cards, correspond to the value of the Mall Gift
Certificates issued for such day. In the event that TGCC determines that
there is a shortage, it will provide immediate notification thereof to
Customer's designee. In the event of a shortage, whether discovered by
Customer or TGCC, Customer will deposit sufficient funds to cover the
shortage into the Depository Account within (10) ten days following the
discovery of the shortage.
f. Credit/Debit Card Fees. Customer agrees to pay all credit card
fees associated with the issuance of Mall Gift Certificates. TGCC will xxxx
such credit card fees to Customer at the same rate charged to TGCC by the
credit card company. Said billing statements will be sent directly to the
Customer's management office unless otherwise directed by the Customer.
Customer will reimburse the fees to TGCC net 15 days after receiving monthly
billing statements. Current credit/debit card rates are disclosed in
Addendum A, Part ll.
g. Gift Certificate Stock and Processing. Customer will pay all costs
associated with gift certificate stock and document processing required for
its operation, as specified on Addendum A, Part III, attached hereto.
Customer to pay all Bank Charges assessed on the Depository Account. Said
fees will be payable net fifteen (15) days following the receipt of monthly
billing statement.
h. Internet. Customer and TGCC will cooperate in designing and
implementing a so-called "HTML Frame" which will allow visitors to Customer's
website the opportunity to obtain Mall Gift Certificates via the Internet.
Customer will provide TGCC with names of Customer's website administrators in
order to complete all programming requirements. Customer will pay for all
programming costs to establish the "HTML Frame" in Customers websites and
TGCC will pay for programming costs required for TGCC to gain access to and
integrate with Customer's websites. Such fees shall be set forth in Addendum
A, Part IV, attached hereto. TGCC agrees to provide fulfillment on each order
accepted, that is transacted through the Internet with shipment direct to the
consumer.
i. Relocation. Customer shall have the right at any time during the
Term to cause TGCC to relocate the Counter Top Unit to another mutually
agreeable location in the Property upon giving TGCC at least thirty (30) days
advance written notice of its intention to so relocate. In that event,
Customer shall at their expense bring the necessary utilities to the
relocated Counter Top Unit. TGCC shall provide the technical expertise, via
telephone to assure that the Counter Top Unit is functioning properly
following the relocation.
2. RIGHTS AND OBLIGATIONS OF TGCC.
a. The System. TGCC will install the System at the Property and will
cause the System to be operated only for the issuance of Mall Gift
Certificates and for no other purpose. TGCC will cause the Counter Top Unit
to be fully operational and activated. Customer shall have the right to
request the installation of an additional Counter Top Unit as part of the
System, and TGCC shall provide such additional Counter Top Unit to Customer
for such periods of time as are requested by Customer, from time to time, at
a cost set forth in Addendum A, Part V, attached hereto, within 45 days
following Customer's written request.
The current System hardware for the Counter Top Unit, will become the
exclusive property of the Customer, once the sum set forth in Addendum A,
Part VI, have been received from Customer. TGCC is and shall be the sole
owner of the trade name "The Gift Certificate Company" and all other trade
names, trademarks and copyrights used now or in the future in connection with
the System. TGCC retains all rights to the System software it has developed.
Software supplied with the System may not be copied, sold or used except as
authorized by TGCC.
b. Competing Installations. Customer understands and agrees that TGCC
has the right to enter into agreements the same as or similar to this
Agreement with other companies who may own or manage competing retail
establishments or malls in the geographic vicinity of the Property, and to
install its distribution components in such establishments or malls and offer
gift certificates thereat.
c. Advertising. TGCC has the right to engage in an on-going program
of advertising and promoting the services which it offers, including any
components of the System that may be installed at competing retail
establishments or malls located in the geographic vicinity of the Property.
TGCC may not, however, use Customer's name or the name of any of its
affiliates nor the name or likeness of the Property in any advertising or
promotion nor shall TGCC engage in such advertising and promotion at the
Property without the express written consent of Customer.
d. Maintenance and Training. TGCC will provide all necessary
maintenance required to insure that all TGCC owned websites established
pursuant this agreement are always functioning properly. Should both parties
agree during the implementation process that additional training is required
by either the individual retailers or the mall management teams, TGCC will
provide such training either in writing or via the telephone at no charge to
the Customer.
e. Convenience Fees. A convenience fee per certificate will be
charged for each Mall Gift Certificate sold via the Internet and via the
telephone, and such fees shall be set forth in Addendum A, Part VII, attached
hereto.
f. Mall Gift Certificate Redemption. The Mall Gift Certificates will
initially be in the form of executable bank checks that can be redeemed for
merchandise or services at any retail establishment in the Property and
deposited into the account of such retail establishment. TGCC will guarantee
the redemption funds to the retail establishment as long as said
establishment follows the TGCC Mall Gift Certificate redemption procedures.
g. Unredeemed Mall Gift Certificates. TGCC shall be responsible for
and will cause compliance with all applicable state abandoned property or
escheat laws. Any balance of unredeemed Gift Certificates remaining after
compliance with all applicable laws shall be paid to TGCC as fees for
services provided by TGCC pursuant to this Agreement.
h. Reporting and Audit. Within twenty (20) days of the end of each
month, TGCC will provide Customer with a report showing the volume of Mall
Gift Certificates issued during the preceding month. Such report shall
indicate the entire volume of Mall Gift Certificates issued. An authorized
officer, or agent of TGCC will sign the report. Customer shall have the
right to examine or audit TGCC's books and records relating to the Mall Gift
Certificates (for the Property, only), at TGCC's principal place of business
and during normal business hours, by informing TGCC in writing of its desire
to do so five (5) days in advance. Any such audit shall be at the Customer's
expense.
i. Laws Compliance. TGCC shall comply and shall cause the Mall Gift
Certificate Program to comply with all federal, state, regional, county,
municipal and other governmental statutes, laws, rules, orders, regulations
and ordinances applicable to the Mall Gift Certificate Program, including,
but not limited to, applicable escheat statutes.
j. Insurance; Indemnity. TGCC shall indemnify Customer and save it
harmless for, from and against any and all claims, actions, damages,
liabilities and expenses (including attorneys' and other professional fees)
suffered by Customer in connection with: (i) loss of life, personal injury
and/or damage to property or the environment suffered by third parties
arising from or out of the occupancy or use by TGCC of the Property or any
part thereof, occasioned wholly or in part by any act or omission of TGCC,
its agents, contractors, invitees or employees and (ii) the misappropriation
or other loss of any funds held in any of the accounts to the extent such
misappropriation or other loss was occasioned by any act or omission of TGCC,
its agents, contractors or employees. This indemnity shall survive any
termination of this Agreement with respect to any incident occurring during
the Term. At all times on and after the date of this Agreement, TGCC will
carry and maintain, at its expense, a non-deductible (i) commercial general
liability insurance policy, including insurance against assumed or
contractual liability under this Agreement to afford protection with respect
to personal injury, death or property damage of not less than One Million
Dollars ($1,000,000.00) per occurrence combined single limit and Two Million
Dollars ($2,000,000.00) general aggregate; (ii) all-risks property and
casualty insurance policy, including theft, written at replacement cost value
and with replacement cost endorsement, covering all personal property of TGCC
located at the Property, including without limitation, all elements of the
System, including the Counter Top Unit and (iii) if and to the extent
required by law, worker's compensation insurance policy, or similar insurance
in form and amounts required by law. TGCC shall continue in force its Chubb
Executive Protection Policy of insurance, or a similar policy issued by
another insurance company with a Bests rating similar to Chubb's rating. Such
Policy shall contain coverage for employee theft, premises, transit, and
depositor's forgery with respect to money and securities with a limit of not
less than Five Million Dollars ($5,000,000.00) per occurrence with no
aggregate limit. TGCC and Customer agree that any proceeds of the Chubb
Executive Protection Policy, which relate to funds associated with the Mall
Gift Certificates, shall be deposited into an account as directed by Customer
so as to cover outstanding Mall Gift Certificates.
Neither Customer nor TGCC shall be liable to the other Party or to any
insurance company (by way of subrogation or otherwise) insuring the other
party for any loss or damage to any building, structure or other tangible
property or any resulting loss of income or losses under worker's
compensation laws even though such loss or damage might have been occasioned
by the negligence of such Party, its agents or employees. The provisions of
this paragraph shall not limit the indemnification for liability to third
parties contained in the preceding paragraph.
3. AGREEMENT TERM
a. Term. The "Term" of this Agreement shall commence as of
the April 24, 2001 and shall terminate April 24, 2006, unless earlier
terminated in accordance with the provisions of Section 5 below. At the end
of the Term, this agreement will renew for successive one (1) year periods
("Renewal"). Either TGCC or Customer may terminate this agreement at the end
of the Term or any Renewal, upon ninety (90) days prior written notice.
b. Termination. Upon the termination of this Agreement, TGCC and
Customer will no longer issue Mall Gift Certificates through the System.
Unless Customer has terminated this Agreement due to an Event of Default by
TGCC in accordance with Section 5, TGCC will continue to process previously
issued Mall Gift Certificates until the expiration date of the last Mall Gift
Certificate issued. If Customer has terminated this Agreement due to an Event
of Default by TGCC in accordance with section 5, Customer shall have the
right to direct TGCC to take all necessary steps so that Customer or
Customer's designee may process previously issued Mall Gift Certificates.
TGCC and Customer will destroy all unused gift certificate stock in each of
their possession specific to Customer's System.
4. ASSIGNMENT
a. Assignment by Customer. Customer may delegate, assign, transfer or
encumber its rights, duties, interests or obligations under this Agreement to
any subsidiary or affiliate of Customer or to any person or entity, which
acquires the Property. No such transfer or assignment of this Agreement will
constitute a termination of this Agreement. Customer agrees (subject to any
confidentiality agreement which Customer may have with the Third Party) to
disclose to TGCC the name of, and a contact person associated with the Third
Party purchaser so that TGCC may contact such Third Party concerning this
Agreement and TGCC's services.
b. Assignment by TGCC. TGCC has the right to delegate, assign,
transfer or encumber its rights, duties, interests or obligations under this
Agreement.
5. DEFAULTS AND TERMINATION.
The following events shall constitute an "Event of Default":
a. Bankruptcy. The adjudication of either Party as being bankrupt,
insolvent or unable to pay its debts and obligations as they become due or if
either Party places any of its property or assets in liquidation for the
purpose of meeting claims of its creditors or a trustee or receiver is
appointed. If any such adjudication is involuntary, it shall not be an Event
of Default hereunder if such Party is seeking to have the adjudication
dismissed and in fact causes it to be dismissed within sixty (60) days.
b. Failure to Perform. The failure of either Party to perform or fulfill
at the time and in the manner herein provided any duty, obligation or
condition required to be performed or fulfilled by that Party hereunder;
provided, however, that the non-performing Party shall have been given ten
(10) days written notice if such non-performance is the non-payment of money
and thirty (30) days' prior written notice for any other non-performance,
specifying the non-performance or non-fulfillment that it is charged with
having committed and shall have failed to cure such non-performance or non-
fulfillment within such ten (10) day or thirty (30) day period, as the case
may be; provided, however, in the event of a non-monetary, non-performance or
non-fulfillment, there shall not be an Event of Default hereunder if the
defaulting Party shall be diligently pursuing the curing of such non-
performance and in fact completes the cure within sixty (60) days from the
date of the notice.
Upon the occurrence of an Event of Default, the non-defaulting Party shall
have the right to terminate this Agreement upon written notice to the other
Party. If this Agreement is terminated pursuant to this Section, the
defaulting Party nevertheless shall remain liable for all damages which
may be due or sustained by the non-defaulting Party, including, but not
limited to, reasonable attorneys' fees, costs and expenses incurred by the
non-defaulting Party in pursuit of its remedies hereunder.
6. MISCELLANEOUS PROVISIONS.
a. Applicable Law. All matters pertaining to the validity,
performance, construction or effect of this Agreement, and the legal
relations between the Parties, shall be governed by and construed in
accordance with the laws of the State of Utah applicable to agreements made
and wholly to be performed in said State without regard to principles of
conflicts of law. Any disputes arising under this Agreement or the
transactions contemplated hereunder shall be resolved in the state and
federal courts residing in Salt Lake City, Salt Lake County, Utah.
b. Entire Agreement. This Agreement constitutes the entire Agreement
and understanding of the Parties with respect to the subject matter hereof,
and supersedes all prior agreements, arrangements and understandings related
to the subject matter hereof. No representation, promise, inducement or
statement of intention has been made by either of the Parties that is not
embodied in this Agreement, and neither of the Parties shall be bound by or
be liable for any alleged representation, promise, inducement or statement of
intention that is not specifically set forth in or referred to herein.
c. No Joint Venture. TGCC and Customer are independent contractors.
No agency, partnership, joint venture or employee-employer relationship is
intended or created by this Agreement, and neither party shall hold itself
out in a manner that would indicate any such relationship exists in any
matter, including but not limited to, advertising.
d. Notice. Any notice or other communication required or permitted to
be given hereunder shall be effective upon receipt by the intended recipient
at the address indicated in the introductory paragraph above (or such other
address as either Party shall provide to the other Party by one of the means
set forth herein below). Receipt shall be deemed to have occurred upon the
earlier of (a) the date of actual receipt by the intended Party by registered
mail, (b) five (5) days after such notice is deposited in the United States
mail, certified or registered, postage prepaid and properly addressed, (c)
the date such notice is sent to the other Party by telecopy (with receipt
confirmation), provided such notice is promptly provided to the other Party
by United States mail, certified or registered, postage prepaid and properly
addressed, or (d) one (1) business day after such notice is deposited with a
recognized overnight courier service with instructions for overnight
delivery.
e. Force Majeure. Neither Party shall be responsible to the other
Party for non-performance or delay in performance of any of the terms,
duties, obligations or conditions contained in this Agreement due to acts of
God, acts of governments, wars, riots, strikes, accidents or other causes
beyond the control of the Parties. In no event shall financial inability
excuse a Party's performance hereunder.
f. Confidentiality. The Parties agree that the contents and existence
of this Agreement shall be considered confidential and shall not be disclosed
to any third person or entity by either Party except with the prior written
approval of the other Party or upon the order of a court of competent
jurisdiction.
g. Severability. In the event that any provision hereof shall be
deemed in violation of any applicable law, rule or regulation, or held to be
invalid by any court in which this Agreement shall be interpreted, the
violation or invalidity of any particular provision hereof shall not be
deemed to affect any other provision hereof, but this Agreement shall be
thereafter interpreted as though the particular provision so held to be in
violation or invalid were not contained herein.
h. Miscellaneous. The above Recitals and all Attachments attached
hereto are deemed to be incorporated herein by reference. Notwithstanding
any rule or maxim of construction to the contrary, any ambiguity or
uncertainty in this Agreement shall not be construed against either Party
based upon authorship of any of the provisions hereof.
IN WITNESS WHEREOF, the Parties have entered into this Agreement
effective as of the Effective Date.
CUSTOMER: TGCC:
Prime Outlets of Grove City The Gift Certificate Company
By: /s/ Xxxxxxxxx X. Xxxx By: /s/ Hayden Felt
Signature Signature
Xxxxxxxxx X. Xxxx Hayden Felt
Name (printed) Name (Printed)
Sr. VP Operations VP Sales
Title Title
Date April 18, 2001 Date April 24, 2001
Addendum A
ATTACHED TO AND FORMING A PART OF THE CONTRACT SERVICES AGREEMENT DATED April
24, 2001 BY AND BETWEEN NBO, INC. ("TGCC") AND THE PRIME OUTLETS CENTERS INC.
("CUSTOMER").
**
[**] ALL SECTIONS MARKED WITH TWO ASTERISKS [**] REFLECT PORTIONS WHICH HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION BY NEIGHBORHOOD BOX OFFICE, INC. AS PART OF A REQUEST FOR
CONFIDENTIAL TREATMENT.
