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EXHIBIT 10.2
MARKETING AGENT AGREEMENT
This MARKETING AGENT AGREEMENT ("AGREEMENT"), by and between ELECTRONIC
BILLBOARD TECHNOLOGY, INC., a Delaware corporation ("EBT"), having its
principal offices at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and VISION XXXX, LLC, a Texas limited liability company, having its principal
offices at 0000 Xxxxx Xxxxx, Xxxxxx, Xxxxx 00000 ("AGENT") (collectively, the
"PARTIES" or "PARTIES").
W I T N E S S E T H
WHEREAS, EBT is desirous of marketing to third-party customers
("CUSTOMERS") EBT's electronic billboards for display of advertising
("SYSTEMS") both within and outside the United States (collectively
"TERRITORY");
WHEREAS, it is proposed that EBT obtain the agreement of Customers for
placement of Systems on, or in, Customer facilities, manufacture, have
installed and maintain such Systems, and contract with third-parties who will
operate and sell advertising through such Systems ("ADVERTISING MARKETERS"),
on, or in, facilities of Customers within the Territory ("OPERATING SYSTEMS");
WHEREAS, EBT desires to appoint Agent as EBT's marketing representative
to Customers in the Territory for placement of the Systems and Agent desires to
accept such appointment and to undertake and provide such services under the
terms and conditions of this Agreement; and,
WHEREAS, all advertising revenue derived from the Operating Systems
("REVENUE") is to be collected by the Advertising Marketers and distributed to
the Advertising Marketers, EBT, Agent and the Customers by the Advertising
Marketers in accordance with the terms of this Agreement.
NOW THEREFORE, for and in consideration of the premises, the receipt and
sufficiency of which EBT and Agent hereby acknowledge and confess, EBT and
Agent do hereby covenant and agree as follows:
1.
APPOINTMENT OF AGENT
1.1 Subject to the terms and conditions of this Agreement, EBT hereby
designates and appoints Agent as EBT's representative for marketing the Systems
to Customers in the Territory and Agent hereby accepts such appointment.
1.2 Agent shall be the exclusive representative of EBT within the
Territory for marketing the Systems to the Customers identified in Exhibit A
hereto ("PROTECTED CUSTOMERS"), but Agent shall not be the exclusive
representative of EBT with respect to Customers not identified in Exhibit A
hereto ("UNPROTECTED CUSTOMERS"), provided, however, that an Unprotected
Customer to which Agent markets the Systems with the result that such
Unprotected Customer agrees to accept an Operating System on, or in, such
Unprotected Customer's facilities, shall be deemed to be a Protected Customer
as of the date when Agent (1) first marketed the System to such Unprotected
Customer
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by actual in-person presentation, and (2) Agent had given EBT reasonable notice
of the presentation date, regardless of whether EBT accepts or declines to
attend the presentation.
1.3 For purposes of this Agreement, a Customer shall be deemed to
include all divisions, subsidiaries and controlled affiliates of a Customer,
including all of its, and their, physical facilities within the Territory.
1.4 A Customer which is, or becomes, a Protected Customer shall not
cease to be a Protected Customer for any reason except mutual consent of EBT
and Agent.
2.
DUTIES OF AGENT
2.1 Agent shall use Agent's best efforts to promote and market the
Systems to Customers during the Term of this Agreement. Such promotion and
marketing efforts shall be conducted by Agent as follows:
(a) Identifying Unprotected Customers, and promptly disclosing
these to EBT;
(b) Contacting Customers and arranging for and coordinating the
presentation of the Systems to the Customers;
(c) Providing to EBT all results of Agent's marketing efforts on
behalf of EBT on a monthly basis;
(d) Performing Agent's duties under this Agreement in a manner
which will benefit and enhance the perception and desirability of
the Systems to Customers and increase the goodwill and reputation
of EBT; and,
(e) Complying with applicable laws and regulations in the
performance of Agent's duties under this Agreement.
2.2 Agent shall pay Agent's expenses in the performance of this
Agreement.
2.3 Agent shall use only technical and promotional materials with
respect to the Systems either approved, or provided, by EBT for purposes of
marketing the Systems and services of EBT. With respect to any technical and
promotion materials in regard to the Systems provided to Agent by EBT, the
accuracy and content of such technical and promotional materials as are so
provided and approved, shall be at the sole risk and responsibility of EBT, and
EBT shall indemnify, defend and hold Agent harmless with respect thereto.
2.4 Agent shall, during the term of this Agreement, immediately notify
EBT if Agent elects to represent, or offer to represent, or market, sell or
distribute products that compete directly with the Systems.
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3.
LIMITATIONS OF AGENT'S AUTHORITY
3.1 Agent has, and may exercise, no authority to make statements or
representations concerning the Systems that exceed, or are inconsistent with,
the promotional and technical materials provided, or approved, by EBT. Agent
has and may exercise no authority to bind EBT to any undertaking or performance
with respect to the Systems.
3.2 Agent shall not, without prior written approval from an authorized
representative of EBT, incur any expense or obligation in the name of EBT, or,
except as shall be inherent in the use of the technical and promotional
materials provided to Agent or approved by EBT incident to this Agreement, use
EBT's name, trade names, trademarks or logos in connection with Agent's
business other than in the manner expressly authorized by EBT and this
Agreement.
4.
DUTIES OF EBT
4.1 At the request of Agent, EBT shall promptly evaluate the
qualifications for the Systems of prospective Customers identified by Agent.
EBT reserves the right, in EBT's discretion, to reject any prospective Customer
identified by Agent, but only for a material reason related to (1) the
Customer's financial credibility, or (2) an inability of EBT to meet the
production and installation requirements set forth by the Customer, or (3) an
inability of EBT to agree to economical terms with the Customer, or by mutual
agreement between EBT and Agent, provided that the basis for any such rejection
shall be given to Agent, in detail, by notice in writing to Agent within
forty-five (45) days of Agent's identification of a prospective Customer to
EBT. In addition, if EBT shall, within a period of thirty-six (36) months
following any such notice of rejection of a Customer to Agent enter into any
arrangement with the rejected Customer for the placement or use of an Operating
System with such Customer, such Customer shall automatically become, and
thereafter remain, a Protected Customer for purposes of this Agreement.
4.2 EBT shall use commercially reasonable efforts to enter into
agreements with Advertising Marketers for the sale of advertising to be
displayed on the Operating Systems ("ADVERTISING"). Such Advertising Marketers
shall be required to conform all such Advertising to the requirements set forth
in any agreements between EBT and a Customer through whose Operating System
such Advertising is displayed unless such conformance would violate any
antitrust laws. Such Advertising Marketers shall be required to maintain
separate records for, and shall invoice and collect into a separate account,
and separately account to EBT and Agent for, all Revenues generated by the
Operating Systems and distribute and account to EBT, Agent and the Customers
for those Revenues in accordance with the provisions of this Agreement.
4.3 EBT shall timely manufacture, or cause to be manufactured, install,
or cause to be installed, make operable and maintain the Operating Systems.
Agent shall not be responsible for any expenses incurred by EBT in its duties
under this paragraph.
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4.4 EBT shall process orders to manufacture Systems on a
first-in-first-out basis, based on the dates purchase orders are received by
EBT.
5.
REVENUE
5.1 All Revenue shall be collected for the joint account of EBT, Agent,
Customer and the Advertising Marketer providing the Advertising which generates
such Revenue. Such Revenue, less the amount thereof distributable to the
Advertising Marketer, shall be distributed to EBT for the account of EBT,
Customers and Agent, on or before the 15th day of the calendar month following
the month during which such Revenue was collected ("DISTRIBUTION REVENUE").
Distribution Revenue of Agent and Protected Customers shall then be disbursed
by EBT to Agent for the account of Agent and the Protected Customers within
fifteen (15) days in accordance with the schedule provided in Exhibit B hereto
("DISTRIBUTION SCHEDULE"). Upon receipt thereof from EBT, Agent shall
distribute to the Protected Customers their Distribution Revenue. Agent
indemnifies and releases EBT of all liability for non-payment of Distribution
Revenue to the Protected Customers by Agent.
5.2 With each disbursement of Distribution Revenue, there shall be
provided to Agent the following:
(a) A description of the sources of the Distribution Revenue by
Advertising Marketer, Advertising purchaser, Customer and Customer
Operating System facility;
(b) A description of the unpaid, but accrued Advertising balance
owed by each Advertising purchaser by Customer and Customer
Operating System facility; and,
(c) A description of the deductions from Revenue permitted herein,
or otherwise by written agreement between EBT and Agent, if any,
for the payment period in reduction of Distribution Revenue.
5.3 For purposes of this Agreement, Revenue shall be, and include, the
gross purchase price of the purchased Advertising, which gross purchase price
shall be the sum of the aggregate consideration therefor paid in cash, plus the
retail value, before discount, offset or credit, of any and all payments for
Advertising by barter or trade in goods, services or other thing of value, if
any, in lieu of cash, paid or given in exchange for purchased Advertising by a
purchaser ("Noncash Compensation"), less the sum of any applicable sales taxes,
levies, customs and duties. The party receiving such Noncash Compensation shall
contribute, in cash, to each Distribution Revenue payment, the Noncash
Compensation component of such Distribution Revenue payment and shall retain
such Noncash Compensation.
5.4 In no event shall either Revenue or Distribution Revenue, be reduced
by any payment, direct or indirect, to EBT, Agent, or any other party, with
respect to this Agreement, or otherwise, for lease, rental, maintenance, or
operation of the Systems or any Operating System except by specific
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prior written agreement. In no event shall either Revenue or Distribution
Revenue be reduced or increased by the unrealized value of any free Advertising
in the Operating Systems provided to a Customer, a purchaser of Advertising, or
for a public service purpose. Such free Advertising, if any, shall have no
effect in the calculation of either Revenue or Distribution Revenue.
5.5 All agreements between EBT and Advertising Marketers shall require,
in the absence of waiver by both Agent and EBT, annual audit of the books and
records of the respective Advertising Marketers with respect to the Revenues.
Such audit shall be at the sole cost and expense of Agent, EBT and the
respective Advertising Marketers in proportion to the Distribution Revenue
received among them unless such audit shall determine that the Revenues, as
reported by an Advertising Marketer to EBT, are determined by such audit to be
understated by two percent (2%), or more, in which event, the Advertising
Marketer shall bear the entire expense of such audit, and shall remit to EBT
for the account of EBT, Customers, and Agent and distribution among them in
accordance with the terms of this Agreement the amount of Distribution Revenues
which the Advertising Marketer failed to distribute to EBT for their account,
plus interest thereon at an annual rate of eighteen percent (18%), calculated
from the date such disbursement should have occurred through the date such
disbursement is made by the Advertising Marketer, and such unpaid Distribution
Revenue, together with interest thereon, shall be due and payable from, and by,
the Advertising Marketer upon demand by EBT.
6.
TERM
6.1 The term of this Agreement ("TERM") shall commence upon execution of
this Agreement by EBT and Agent and shall continue thereafter until the earlier
to occur of twenty (20) years thereafter or, after the initial two (2) years of
the Term, if no Operating System shall be operating on, or in, a Customer
facility within the Territory, otherwise than by reason of default by EBT of
this Agreement or an agreement between EBT and a Customer, unless earlier
terminated in accordance with this Agreement.
6.2 This Agreement shall not, in any event, be terminable without cause
by any party. This Agreement shall be terminable for cause, or otherwise, only
as follows:
(a) If a material breach of a duty, obligation, representation or
warranty of a party to this Agreement shall occur and, after prior written
notice thereof to the defaulting party by the non-defaulting party, the
defaulting party shall fail to cure a monetary default within ten (10) days, or
a non-monetary default within thirty (30) days of the date of such notice; or,
(b) By mutual agreement of all parties; or,
(c) By EBT, upon ten (10) days prior written notice if Agent shall
represent, sell, market or distribute technology, products or services, other
than the Systems, that directly compete with the Systems; or,
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(d) By Agent if EBT shall either place, or attempt to place, or
consent to placement of, the Systems with a Protected Customer, directly, or
indirectly through a third-party, or otherwise, to the exclusion of
participation by Agent in such placement.
(e) By EBT, if for any consecutive two (2) year period during the
Term, EBT receives Distribution Revenue for the account of EBT, in the
aggregate, exclusive of Distribution Revenue to be disbursed to Agent or
Customers, less than EBT's direct out-of-pocket expenses for operating and
maintaining all Operating Systems ("OPERATING EXPENSES") during such two (2)
year period, provided that Operating Expenses shall not include (i) EBT general
and administrative expenses; (ii) Operating Expenses of any Operating Systems
installed within the last twelve (12) month period of such two (2) year period;
or (iii) Operating Expenses for which EBT was, or is, to be reimbursed by a
third party.
6.3 In the event of the termination of this Agreement by Agent under
either Paragraph 6.2(a) or (d), Agent shall continue to receive Distribution
Revenue in accordance with Paragraph 5.1 derived from Operating Systems
installed previous to the termination.
6.4 Upon termination of this Agreement for any reason, Agent shall,
within ten (10) days of such termination, return to EBT all copies of technical
and promotional materials provided to Agent by EBT.
7.
INDEMNITIES
7.1 Agent shall defend, indemnify and hold harmless EBT from and against
all claims, demands, or causes of action arising out of untrue representations
or warranties of Agent herein as well as Agent acts in breach of this
Agreement, in the absence of permissible cure, if any.
7.2 EBT shall defend, indemnify and hold harmless Agent from and against
all claims, demands or causes of action arising out of (i) untrue
representations or warranties of EBT herein, and (ii) EBT's acts, or omission
to act, in breach of this Agreement.
7.3 In no event shall any party hereto be entitled to special, indirect,
or consequential damages including lost profits, for breach of this Agreement.
Remedies shall be limited to claims for amounts due hereunder or for
indemnification as provided for herein. However, the foregoing limitation of
remedies shall not apply to any action by EBT for infringement by Agent; any
action based on or with respect to unauthorized publication, disclosure, or use
of confidential information or trade secrets of EBT; or any action based on
EBT's rights in copyrights, trademarks, or trade names or other proprietary
rights in the electronic billboards.
8.
STATUS OF PARTIES
8.1 The parties to this Agreement are, and shall remain, independent
contractors, and nothing herein shall be construed to create a partnership, or
joint venture, between the parties. Each
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of the parties shall be responsible for the wages, hours, and conditions of
employment of such party's personnel during the Term of, and under, this
Agreement.
8.2 Each of the parties shall perform and comply with all applicable
laws, regulations and agreements which govern, regulate or affect the ability
of such party to perform and comply with the terms and conditions of this
Agreement.
8.3 For purposes of this Agreement, each of the parties shall be deemed
to mean and include the party and all of its, and their, divisions,
subsidiaries and controlled affiliates.
9.
CONFIDENTIALITY
9.1 It may become necessary during the course of this Agreement for a
party (the "DISCLOSING PARTY") to disclose to another party (the "RECEIVING
PARTY") information which the disclosing party considers confidential or
proprietary (e.g., inventions, confidential know-how, trade secrets, future
product plans) regardless of whether the confidential information is in written
or tangible form.
9.2 The Receiving Party shall not use or disclose confidential
information to any third party individual, corporation, or other entity without
the prior written consent of the Disclosing Party and shall limit its
disclosure to its employees or agents having a need to know such information.
The Receiving Party shall protect the disclosed confidential information by
using the same degree of care (but no less than a reasonable degree of care) to
prevent the unauthorized dissemination or publication of the confidential
information as the Receiving Party uses to protect its own confidential
information of a like nature. Such non-disclosure obligations will terminate
five (5) years after receipt of such information.
9.3 The obligations herein will not apply to any information which is:
(a) Available to the public other than by a breach of this
Agreement by the Receiving Party;
(b) Received by the Receiving Party from a third party without
confidential limitations;
(c) Independently developed by the Receiving Party's employees or
agents; or,
(d) Known to the Receiving Party prior to first receipt of same
from the Disclosing Party.
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10.
FREEDOM TO COMPETE
10.1 Subject to the obligations and limitations set forth under this
Agreement, neither party hereto shall be restricted or prohibited from lawfully
competing with the other party in any other aspects of its business.
11.
SPECIAL CONDITIONS
11.1 At the request of Agent, EBT shall cause Xxxxx Xxxx Xxxxxxx
("XXXXXXX"), to be elected to the Board of Directors of EBT, and to remain a
Director of EBT until the earlier to occur of Xxxxxxx election to resign or
termination of this Agreement. If Xxxxxxx shall elect to resign, then Agent
shall have the right to request that a person designated by Agent be elected to
the Board of Directors of EBT as a replacement for Xxxxxxx and EBT shall cause
such person to be so elected.
11.2 Agent shall, at all times, be provided with a copy of each
agreement relating to the Operating Systems between EBT and a Protected
Customer and EBT and an Advertising Marketer with respect to the Systems.
Additionally, upon receipt by EBT, Agent shall be provided with a copy of any
third-party notice to EBT alleging a breach or actionable wrongful act, or
omission to act, by either EBT or an Advertising Marketer, of any agreement or
other matter with respect to, or affecting, the Systems or the Advertising.
11.3 For purposes of this Agreement, Systems shall be deemed to include
not only the Systems, as existent at the inception of this Agreement, but any
subsequent improvements, advances or modifications thereof, whether developed
by, or licensed to, EBT.
11.4 In the event that EBT shall sell an Operating System to a Protected
Customer, Agent shall be paid a cash commission based on the sales price of the
Operating System ("Commission"). The Commission shall be calculated in
accordance with the terms described in Exhibit C to this Agreement, which shall
be incorporated herein for all purposes.
11.5 Notwithstanding execution of this Agreement by the parties, this
Agreement shall not become effective unless and until approved by the Board of
Directors of EBT and EBT shall obtain such approval not less than fourteen (14)
business days following EBT's execution.
12.
REPRESENTATIONS AND WARRANTIES
12.1 Each party represents and warrants to the other party as follows:
(a) Such party has the requisite approvals, power and authority to
enter into, and perform and comply with, the terms and conditions of this
Agreement;
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(b) Such party's performance and compliance with the terms and
conditions of this Agreement will not result in the violation or breach by such
party of any agreement or license to which such party is a party;
(c) Such party is validly organized and in good standing in such
party's state of incorporation or organization and duly qualified to transact
business in each jurisdiction in which the conduct of such party's business
requires such qualification; and,
(d) Such party has obtained all necessary consents, approvals and
authority to enter into, perform and comply with the terms of this Agreement.
12.2 EBT represents and warrants to Agent that all purported patents,
copyrights and trademarks with respect to any component of the Systems
necessary for performance and compliance by EBT with the terms of this
Agreement are either validly held by, or licensed to, EBT. EBT further
represents and warrants to Agent that EBT has the experience, technical
knowledge, capacity to manufacture, or cause to be manufactured, and will
install and make operable, the Operating Systems on, or in, Customer
facilities, as contemplated by this Agreement.
12.3 Agent represents and warrants to EBT that Agent and/or Agent's
members have the experience, knowledge and ability to perform Agent's duties
under, and comply with and perform, the terms and conditions of this Agreement.
13.
MISCELLANEOUS
13.1 Notice. For purposes of all notices required or permitted by this
Agreement, such notices shall be given as follows:
(a) All notices, requests, consents and other communications
hereunder to a party shall be in writing and shall be personally delivered, or
sent by registered or certified mail, return receipt requested, postage
prepaid, with a copy by telefax addressed to the person or persons to whom such
notice is to be given as follows (or at such other address as shall be stated
in a notice similarly given):
(i) if to EBT, such notice shall be given at:
Suite 107
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
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(ii) if the Agent, such notice shall be given at:
0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) All notices, requests, consents and other communications
hereunder shall be deemed given upon the earlier to occur of (i) receipt by the
party to whom such notice is directed, or (ii) two (2) business days after
deposit in the mail. Each party, by notice duly given in accordance herewith,
may specify a different address for the giving of any notice hereunder.
13.2 Choice of Law. This Agreement shall be deemed to be made in the
state of Texas and, in all respects, shall be interpreted, construed, and
governed by, and in accordance with, the laws of the state of Texas. Venue for
any action arising hereunder shall be exclusively in a court of competent
jurisdiction, whether state or federal in Xxxxxx, Xxxxxx County, Texas.
13.3 Waiver of Rights. The waiver by any party of any term or provision
of this Agreement shall not be deemed to constitute a continuing waiver thereof
nor of any further or additional rights such party may hold under this
Agreement.
13.4 No Assignment: Unenforceability. This Agreement is personal to
Agent and is not assignable without the prior written consent of EBT. Agent may
assign its rights under this Agreement to an affiliated Company or organization
managed by one or more of the principals of Agent; all of the provisions of
this Agreement apply fully to each such affiliate of Agent, and the terms and
obligations of this Agreement are fully enforceable against all successors and
assigns of Agent, and EBT has the right to directly enforce the rights and
obligations of this Agreement against any successors or assigns of Agent. Any
attempt to assign, transfer, or subcontract any of the rights, duties or
obligations of this Agreement without such consent shall be void. If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
13.5 Complete Agreement. This Agreement and the Exhibits hereto set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges all prior discussions between them, and none
of the parties shall be bound by any conditions, definitions, warranties,
understandings or representations with respect to said subject matter other
than as expressly provided herein, or in any prior existing written agreement
between the parties, or as duly set forth on or subsequent to the effective
date hereof in writing and signed by a proper and duly authorized
representative of the party to be bound thereby. No provision appearing on any
form originated by a party shall be applicable unless such provision is
accepted in writing by the other party. This Agreement may not be modified or
altered except by a written instrument duly executed by the parties hereto.
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13.6 Binding Agreement. Subject to the restrictions on transfers and
encumbrances set forth herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
13.7 Headings. The clause headings appearing in this Agreement have been
inserted for the purpose of convenience and ready reference. They do not
purport to, and shall not be deemed to define, limit or extend the scope or
intent of the clauses to which they appertain.
13.8 Confidentiality. The terms and conditions of this Agreement are
confidential and not subject to third-party disclosure by EBT or Agent, except
as required by law or for regulatory compliance by either EBT or Agent.
14.
JOINDER OF S.I. DIAMOND TECHNOLOGY, INC.
14.1 S.I. Diamond Technology, Inc., a Texas corporation ("SID"), the
parent of EBT, joins in this Agreement with EBT, SID's subsidiary, for the
purpose of acknowledging and consenting to the terms and conditions of this
Agreement and, as a material inducement to Agent to enter into this Agreement,
expressing the agreement of SID, for the sole benefit of Agent, to do all such
acts and deeds as shall be necessary to permit EBT to perform and comply with
the terms and conditions of this Agreement during the Term and not to do any
act or deed which would limit or preclude such performance and compliance by
EBT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as set forth below.
AGENT:
VISION XXXX, LLC
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Manager
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Date: 11/11/98
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EBT:
ELECTRONIC BILLBOARD TECHNOLOGY,
INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
----------------------------
Title: CEO
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Date: 11/11/98
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SID:
(For purposes of Paragraph 14)
S.I. DIAMOND TECHNOLOGY, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
----------------------------
Title: CEO
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Date: 11/11/98
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