NeoMedia Technologies, Inc.
Exhibit 10.53
Master Reseller Agreement by and between United States Check Company, Inc.
and NeoMedia Technologies, Inc. Dated June 16, 1997
35
MASTER RESELLER AGREEMENT
AGREEMENT made this 16th day of June 1997 by and between United States
Check Company, Inc. 0000 Xxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx
00000 (hereinafter called U.S. Check) and NeoMedia Technologies, Inc. 0000
Xxxxxx Xxx., Xx. Xxxxx, Xxxxxxx (herenafter called NeoMedia).
WHEREAS, U.S. Check has developed and patented data processing and security
enhancements for machine readable documents and NeoMedia desires to introduce
these products into a defined "product area" and Territory in accordance with
the terms and conditions hereof,
Now, THEREFORE, it is mutually agreed:
DEFINITIONS
(1) The "Product Area" mean non-micr forms(paper)having pre-coated
non-visible snippets for use in desktop or high speed laser printing of
gift certificates and money orders.
(2) The "Territory" is Worldwide.
(3) U.S. Check's Price List of the Products is appended hereto as
Schedule A.
(4) "Subsidiary" means any organization in which a substantial interest is
held directly or indirectly by another organization; "Parent" means any
organization which holds, directly or indirectly, an interest in
another organization; and "Affiliates" means Subsidiaries, Parents, and
other organizations which have a parent or subsidiary in common with an
organization.
I. RIGHTS GRANTED
(A) U.S. Check hereby appoints NeoMedia Technologies as the exclusive
Master Reseller of the Products in the Product Area and Territory
except as limited herein. During the term of this Agreement, U.S. Check
agrees not to appoint any other such Master Resellers or sell blank
non-micr documents for use as gift certificates and/or money orders in
desk top or laser printing systems and further undertakes to refer to
NeoMedia any leads concerning prospective customers of the Products
which, directly, or indirectly, come to the attention of U.S. Check.
(B) In return for such appointment, NeoMedia shall pay U.S. Check an
appointment fee of Two Hundred Thousand Dollars ($200,000.00) the
receipt of which is acknowledged by U.S. Check.
II. SALES AND DISTRIBUTION AGREEMENTS
(A) NeoMedia acknowledges that Bottomline Technologies, Inc. is the only
other authorized purchaser of non-micr blank forms used in desk top and
laser printing systems for money orders and gift certificates. Nothing
in this agreement shall limit U.S. Check or Bottomline Technologies
from using the U.S. Check products for gift certificates and/or money
orders in the Product Area or Territory. U.S. Check will pay NeoMedia
25% of the royalty paid by Bottomline for products that can be readily
idenfified as gift certificates or money orders.
III. TERMS OF SALE TO NEOMEDIA
U.S. Check agrees to sell the Products to NeoMedia at the published
Price(s) in Exhibit A. U.S. Check agrees to give NeoMedia thirty (30) days'
written notice of any price changes, and U.S. Check further agrees to FAX to
NeoMedia any changes that might be critical to ongoing bids being submitted by
NeoMedia to prospective customers.
Sales from U.S. Check to NeoMedia will be against irrevocable letters
of credit, payable forty-five (45) days after shipment, unless the parties
mutually agree to some other terms of payment as being more appropriate in any
particular transaction.
IV. PERFORMANCE BY NEOMEDIA
NeoMedia agrees to devote its best efforts to promote the sale of the
Products in the Territory. Without limiting the generality of the foregoing,
NeoMedia agrees:
(A) To place an initial order for the Products, the particulars of
which are set forth in Exhibit B hereto.
(B) To develop, in reasonable stages, a technically qualified sales
force and/or Value Added Resellers (VARs) for the Products in the
Territory, affording U.S. Check an opportunity to appraise and
approve the appointment of potential dealers, which approval will
not be unreasonably withheld by U.S. Check. U.S. Check will not
withhold approval unless there is strong indication that security
of its technology will be breached.
(C) In order to maintain the defined exclusivity of its appointment
granted herein, NeoMedia agrees to purchase minimum quantities of
the Products as follows, each year being measured from January 1st
through December 31st.
PERIOD MINIINUM NUMBER OF DOCUMENTS PURCHASED
Calendar 1997 None
Calendar 1998 None
Calendar 1999 One million
Calendar 2000 Three million
Calendar 2001 Five million
Calendar 2002 Ten million
Calendar 2003 and beyond Ten million
(D) For years three through ten of this Agreement if actual sales by
NeoMedia are fifteen percent (15% lower than the specified
minimums during two (2) consecutive years, U.S. Check will have
the option of terminating NeoMedia's exclusive rights within sixty
(60) days following the end of the second of those years, in all
or part of the Territory.
(E) NeoMedia agrees to sponsor an advertising and promotional
campaign. The campaign will include participation by NeoMedia in
at least one appropriate trade show during each calendar year of
this Agreement, at which the U.S. Check's technology will be
prominently featured.
(F) NeoMedia agrees to send U.S. Check quarterly operating statements,
in the form U.S.Check suggests, not later than five days following
the end of each calendar quarter and after such results have been
made public. In preparing these operating statements, NeoMedia
will follow all reasonable requests for information made by U.S.
Check.
V. PERFOMANCE BY U.S. CHECK:
U.S. Check agrees to support NeoMedia's marketing and sales activities.
Without limiting the generality of the foregoing, U.S. Check agrees:
(A) To make available to NeoMedia, free of charge, a reasonable
quantity of Product literature and promotional material used by
U.S. Check in the United States and Canada. NeoMedia is hereby
authorized to reproduce or edit this literature and material, and
to make needed translations thereof, as may be appropriate in the
Territory, at NeoMedia's expense; U.S. Check will have the right
to approve all such literature and material prior to its exposure
to potential customers, which approval will not unreasonably be
withheld.
(B) To promptly answer any queries concerning the Products or
applications thereof which NeoMedia may submit to U.S. Check in
connection with the proposed marketing campaigns or contemplated
sales.
(C) To endeavor to make the Products to meet NeoMedia's orders, but
U.S. Check nevertheless reserves the right to allot its production
as it deems best. NeoMedia agrees that any failure to supply those
amounts of Products which may be agreed upon from time to time, or
making only part shipment, or no shipment at all, against any
order of NeoMedia, will not make U.S. Check liable or responsible
to NeoMedia except as provided for herein. In all orders greater
than $10,000 NeoMedia shall accompany such order with a deposit
equal to 25% of such order. In the event there are terms in a
purchase order that U.S. Check cannot meet, U.S. Check shall
notify Neomedia within five (5) business days to that effect. In
the event the purchase order is acceptable the order shall be
confirmed and it shall be U.S. Check's responsibility to deliver
per the terms of the purchase order.
(D) To the best of U.S. Check's knowledge there are no claims of
infringement against U.S. Check relating to products being sold by
US Check to NeoMedia. If ever in the future, U.S. Check receives
nofification of any such claim(s), U.S. Check will notify NeoMedia
as soon as possible.
VI. TERM AND TERMINATION
This Agreement will have a term of ten (10) years from the date hereof. Not
less than ninety (90) days prior to the expiration of the term, U.S. Check and
NeoMedia agree to review with NeoMedia the operations under this Agreement to
determine whether, and under what terms, this Agreernent is to continue.
(A) This Agreement can be terminated by either party if, 1) There is a
judicial determination of insolvency or bankruptcy of either party
except that NeoMedia shall have the right of first refusal to
purchase U.S. Check's technology in the event of insolvency or
bankruptcy or 2) The other party fails to comply in any material
way with any of the provisions of this Agreement, provided the
aggrieved party has served upon the other party at least 30 days'
prior notice of such noncompliance. The party upon which notice
has been served shall have thirty days thereafter to cure the
breach provision.
Example of material breaches are: 1) The lack of payment per
terms, 2) Failure to meet minimum purchase requirements, 3)
Failure to receive U.S. Check's approval of potential dealers
and/or 4) Failure by U.S. Check to cure defective product shall be
considered material breaches under this Agreement. No other breach
shall be considered material unless such breach undermines U.S.
Check's technology.
(B) In the event of termination, (if it is not sooner terminated) U.S.
Check will hereafter stand wholly freed and discharged, and
NeoMedia hereby expressly releases and discharges U.S. Check and
U.S. Check hereby expressly releases and discharges Neomedia of
and from any and all obligations or liability whatsoever, whether
arising hereunder or from, or in connection with, any manner or
thing relating to, or in any manner connected with, the subject
matter of this Agreement. The foregoing right of termination and
the additional right of non-renewal at the end of the stated term
are absolute, and neither U.S. Check nor NeoMedia will be liable
to the other because of the termination or non-renewal hereof
(whether with or without cause) for compensation, reimbursement,
or damages on account of the loss of prospective profits on
anticipated sales, or on account of expenditures, investments,
leases, or commitments in connection with the business or good
will of U.S. Check or the NeoMedia, or for any other reason
whatsoever except that U.S. Check shall remain liable to NeoMedia
for all damages and expenses, including fees and reasonable
attorney costs, for claims of patent, trademark and service xxxx
infringement relating to products sold by U.S. Check to NeoMedia.
NeoMedia will not be relieved, however, of any obligations for
unpaid balances for goods shipped hereunder prior to termination
or expiration.
(C) The termination of this Agreement will operate as a cancellation,
as of the date thereof, of all orders which have not been shipped
by U.S. Check to NeoMedia. Thereafter, neither party will be under
any obligation to the other with respect to orders so canceled.
(E) Upon termination of this Agreement for any reason, U.S. Check will
have the right to elect to repurchase from NeoMedia any and all of
NeoMedia's existing inventory of new and unused Products. The
repurchase price to U.S. Check for new and unused Products will be
the net price paid by NeoMedia, but not including freight and
import duties. U.S. Check can also elect to repurchase sales
samples of the Products that have been used by NeoMedia at a ten
percent (10%) reduction of the net price originally paid by
NeoMedia, provided those Products are, in the opinion of U.S.
Check, in good re-sellable condition.
VII. WARRANTY
NeoMedia will not modify insofar as ink and pre-coded areas within
snippets are concerned any of the Products without the specific written
permission of U.S. Check, which permission will not unreasonably be withheld if
such modifications would be important to meet market or legal requirements
within the Product Area while, at the same time, not adversely affecting the
performance of the Products. Any modifications to the Products performed in the
Product Area by NeoMedia pursuant to this paragraph will fall outside U.S.
Check's original manufacturer (printer) standard warranty, and will be the sole
responsibility of NeoMedia.
VIII. TRADE
(A) U.S. Check hereby grants permission to NeoMedia to display the
trademark "UV SMART" and/or "U.S. Check" in relation to the
Products at NeoMedia's place of business and otherwise as may be
appropriate to market and sell the Products provided the Notice of
U.S. Check's ownership of these trademarks is expressed.
(B) Whether or not U.S. Check succeeds in obtaining Registrations of
any or all of the aforesaid trademarks in the Product Area,
NeoMedia hereby acknowledges U.S. Check's proprietary rights
therein and undertakes not to do anything, during or after the
term of this Agreement, which could adversely affect such
proprietary rights or the distinctiveness of the aforesaid
trademarks. NeoMedia also agrees to obtain the prior written
approval of U.S. Check for the manner in which NeoMedia displays
the aforesaid trademarks at NeoMedia's place of business, at trade
shows, and in Product literature.
IX. BEST EFFORTS
NeoMedia hereby acknowledges that its concentrated and best effort is
essential if this Agreement is to realize the degree of success contemplated by
the parties and NeoMedia agrees to exert such best efforts.
X. ARM'S LENGTH RELATIONSHIP
During the term hereof, the relationship between U.S. Check and
NeoMedia is that of vendor and vendee. NeoMedia its agents, employees, and
dealers, under no circumstances will be deemed to be agents or representatives
of U.S. Check, nor will any of them have the right to enter into any contracts
or commitments in the name of U.S. Check or otherwise to bind or commit U.S.
Check.
XI. CONFIDENTIALITY
The parties hereto agree to keep strictly confidential, and to bind
their respective directors, officers, and employees to like covenants, the terms
of this Agreement and all matters relating thereto, and to the Products. All
parties undertake not to disclose any of those terms or matters to any other
person except as may be necessary for the furtherance of this Agreement. No
party to this Agreement is authorized to disclose the terms and conditions of
this Agreement to any third party without the express prior written consent of
the other party.
XII. ASSIGNABILITY AND SURVIVAL OF AGREEMENT
This Agreement is not assignable by NeoMedia without the prior written
permission of U.S. Check except to an entity controlled by NeoMedia.
This Agreement will survive any change of ownership, status, merger,
tranfer, assignment or acquisition. The new entity, under its new form, shall be
responsible for the administration and execution of this Agreement in its
entirety.
XIII. FORCE MAJEURE
Neither party will be in default hereunder by reason of its delay in
the performance of or failure to perform any of its obligations hereunder if the
delay or failure is caused by strikes, acts of God or the public enemy, riots,
incendiaries, interference by civil or military authorities, compliance with
governmental laws, rules, or regulations, delays in transit or delivery,
inability to secure governmental priorities for materials, or any fault beyond
its control or without its fault or negligence.
XIV. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, will be settled by arbitration in accordance with the
Rules of the American Arbitration Association, and the judgment upon the award
rendered by the Arbitrator can be entered in any court having jurisdiction
thereof.
XV. GOVERNING LAW
(A) This Agreement shall be interpreted in accordance with the laws of
The District of Columbia, Washington, D.C.
(B) If any provisions hereunder are illegal or unenforceable under the
laws of the Territory, this Agreement will be otherwise unaffected
unless U.S. Check, in its sole discretion, believes that the
deletion of those provisions goes to the heart of this Agreement,
in which event this Agreement will be terminable forthwith by U.S.
Check.
XVI. GENERAL PROVISIONS
(A) This Agreement contains all the understandings and representations
between the parties relating to the matters referred to herein,
supersedes any arrangements previously entered into between them
with respect thereto, and can be amended only by a written
supplement, duly executed on behalf of the respective parties.
(B) This Agreement will be binding upon Affiliates of NeoMedia.
(C) No term or condition of this Agreement will ever be considered as
waived unless reduced to writing and duly executed by an officer
of the waiving party. Any waiver by either party of a breach of
any term or condition of this Agreement will not be considered as
a waiver of any subsequent breach of the Agreement or any other
term or condition hereof.
(D) The effective date of this Agreement will be that set forth in the
beginning hereof, any approvals of any of the terms or conditions
of this Agreement required by the laws of the Territory will be
obtained by NeoMedia prior to that effective date.
(E) The paragraph headings are for convenience only and will not, be
deemed to affect in any way the language of the provisions to
which they refer.
(F) All notices will be sent to the last known address of the other
party which have been communicated in writing and will be deemed
to take effect five (5) days following the mailing thereof. Each
party agrees to inform the other if they have availability of FAX
and/or email, and if so, to furnish the appropriate FAX or email
addresses. In this event, important notices will be transmitted
via FAX or email, and they will be deemed to have been received
upon acknowledgment thereof immediately following correct
dispatch.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of the respective parties, as of the date first above
written.
NEOMEDIA TECHNOLOGIES, INC.
ATTEST: By: /s/ XXXXXXX X. XXXXX
----------------------------
Xxxxxxx X. Xxxxx
/s/ XXXXXX X. XXXXXXXXXXXX Title: PRESIDENT
------------------------- -------------------------
Xxxxxx X. Xxxxxxxxxxxx UNITED STATES CHECK COMPANY, INC.
By: /s/ ILLEGIBLE
ATTEST: ----------------------------
/s/ ILLEGIBLE Title: VICE PRESIDENT
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EXHIBIT A PRICE LIST
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To Be Determined. Prices are dependent on volumes. In the event U.S. Check
permits licensees to manufacture non-micr forms for sale to end users, NeoMedia
shall be permitted to purchase such UV Smart enhanced forms from said authorized
manufacturers.
EXHIBIT B NEOMEDIA'S INITIAL ORDER
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To Be Determined
