AGREEMENT
This Agreement (the "Agreement"), dated as of 8/18/99 (the "Effective
Date"), is made by and between XXXXxxx.xxx, Inc., a Pennsylvania corporation
having offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 ("XXXXxxx.xxx"),
and Systemax, Inc. a Delaware corporation having offices at 00 Xxxxxx Xxxx
Xxxxx, Xxxx Xxxxxxxxxx, XX 00000 ("Systemax"). The parties agree as follows:
Section 1. Definitions
Whenever used herein with initial letters capitalized, the following terms
shall have the following defined meanings:
"Promotional Placement" means a branded graphical icon situate on the
persistent desk top interface of each PC manufactured by Systemax (the "Desktop
Icon"), which icon will contain a direct link to the home page of
XXXXxxxXxxxxx.xxx.
"Site" means that web site, the primary home page for which is located at
URL xxxx://xxx.xxxxxxxxxxxxx.xxx (and any successor or replacement thereof).
"Customer" means (i) any person or entity who enters the XXXXxxx.xxx Site
from the Product and opens an account with XXXXxxxXxxxxx.xxx and either: (i)
deposits [Confidential Treatment Requested]** with XXXXxxx.xxx; or (ii) receives
a commercial, personal or residential extension of credit.
"Click-Through" means each instance in which a bona fide third party user
links to the Site through the Promotional Placement and successfully views one
or more pages of the Site.
"Competitive Marketing" means: (i) any link, displayed banner or other
promotion in or on the Product to or for a site other than the Site which link,
displayed banner or other promotion promotes financial services, investment and
financial advise, commercial and investment banking, loan origination and
lending and credit card services and (ii) any link, displayed banner or other
promotion for any entity other than XXXXxxxXxxxxx.xxx, the primary business of
which is financial services, investment and financial advise, commercial and
investment banking, loan origination and lending and credit card services.
"Product" means each PC manufactured and sold by Systemax and the Shipping
Unit.
"Shipping Unit" means the packaging, i.e., box or container, containing the
Product, including separately packaged instructional (and promotional)
materials, used to deliver the Product to the customer.
** [Confidential Treatment] indicates portions of this document that have been
deleted from this document and have been separately filed with the Securities
and Exchange Commission.
Section 2. Promotional Placements
2.1 Placements. Throughout the term of this Agreement, Systemax will
include in the Product a Promotional Placement. This requirement shall not
include custom configured PCs if the Systemax customer requests no
promotional icons on the desktop.
(a) XXXXxxx.xxx shall pay to Systemax a per unit shipped price for the
Desktop Icon [Confidential Treatment Requested]** (the "Fixed Fee")
for a period of six (6) months or up to 150,000 Product units,
which ever comes first, to be invoiced on a monthly basis. Such
payment is to be net of all returns. Systemax will account for all
returns and XXXXxxx.xxx shall be entitled to setoff amounts owed
hereunder based upon the number of returns. XXXXxxx.xxx shall make
payment under this Agreement within thirty (30) days of invoice by
Systemax.
(b) XXXXxxx.xxx shall be entitled to setoff [Confidential Treatment
Requested]** of the Fixed Fee against the Referral Fees as defined
in section 3.1 of this Agreement.
(c) Systemax shall place at least one (1) hot link for the
XXXXxxxXxxxxx.xxx Site on one or more of its websites.
2.2 Promotional Materials/Press Releases.
(a) Each party will submit to the other Party, for its prior written
approval, which approval shall not be unreasonably withheld or
delayed, any marketing, advertising, press releases, and all other
promotional materials related to the subject matter of the
Agreement and/or referencing the other Party and/or its trade
names, trademarks, and service marks to be used in conjunction with
the Promotional Placement (the "Materials").
(b) The Shipping Unit will contain marketing materials created by
XXXXxxx.xxx for the XXXXxxxXxxxxx.xxx Site ("Marketing Material")
in the form of a separate XXXXxxx.xxx materials package. The
Marketing Material shall be limited to promotions relating to
personal/commercial banking, loan origination and lending, stock
brokerage and the Site. The design and content of the Desktop Icon
and Promotional Materials must be approved by Systemax, which
approval shall not be unreasonably withheld nor delayed.
2.3 Direct Links. Systemax shall ensure that the link in the
Promotional Placement conveys users to the Site, without displaying or
performing any other advertisement, promotion or content. Systemax shall
not use or assist, authorize or encourage any third party to use, any
techniques or technologies (including, without limitation, "framing",
interstitial advertisements, pop-up windows, new consoles or similar items
or techniques), that would cause the appearance or presentation of the Site
as seen by users linking to the Site from the Promotional Placement to be
different from that seen by users who access the Site by hand-entering the
applicable URL into a generally commercially available browser which has
not been customized for a particular person or entity.
2.4 Licenses. XXXXxxx.xxx and Systemax (as applicable, the "Licensor")
each hereby grant the other party (the "Licensee") a non-exclusive,
nontransferable, royalty-free, worldwide license to use, reproduce, perform
and display such of the Licensor's trademarks and logos as it may provide
to the Licensee for use in connection with the Licensee's performance of
this Agreement, subject to prior written approval in each case by the
Licensor. All goodwill arising out of either party's use of the other
party's trademarks or logos will inure to the benefit of the Licensor.
2.5 Brokerage Activities. In the event that Systemax does not enter
into an agreement with eTrade for online brokerage promotional placement,
XXXXxxx.xxx shall have the exclusive right to expand the within Agreement
to include a separate Promotional Placement (as defined) for its brokerage
activities and services for a per account bounty fee [Confidential
Treatment Requested]** under payment terms to be negotiated in good faith.
Further, the definition of "Competitive Marketing" contained herein shall
be expanded to include investment and stock brokering.
Section 3. Compensation and Reporting
3.1 Referral Fees. Subject to the adjustment set forth in paragraph
3.1 (a) below, and provided (i) the Customer opens an account with
XXXXxxx.xxx (either deposit or loan), and (ii) the Customer maintains an
average balance and/or borrows an amount equal to the amount set forth in
the below schedule for a period of forty five (45) days, XXXXxxx.xxx will
pay to Systemax a per Customer fee as follows:
[Confidential Treatment Requested]** [Confidential Treatment Requested]**
[Confidential Treatment Requested]** [Confidential Treatment Requested]**
[Confidential Treatment Requested]** [Confidential Treatment Requested]**
3.2 Referral Fee Adjustment and Payment. On the first day of each month
during the Term, XXXXxxx.xxx shall calculate the total Referral Fees earned
during the prior month and subtract from that figure an amount equal to
of the Fixed Fees earned during the prior month. The resulting amount
(the "Adjusted Referral Fee") shall be paid by XXXXxxx.xxx to Systemax no
later than 15th day of each month. If the Adjusted Referral Fee is a
negative number no Referral Fees shall be paid in that month,
provided, however, this shall not affect XXXXxxx.xxx's obligation to pay to
Systemax the total amount of Fixed Fees earned in the prior month.
3.3 Warrants. In addition to the payment terms outlined above,
XXXXxxx.xxx shall grant to Systemax, upon signing this Agreement, a total
of Ten Thousand (10,000) warrants for XXX.Xxxx.xxx stock, exercisable upon
grant which shall expire two (2) years from grant, at an exercise price
equal to the Nasdaq closing market bid price of the shares on the Effective
Date of the Agreement as published in the Wall Street Journal. The parties
agree to execute any additional documentation necessary to issue the
warrants. Additionally, contingent upon the satisfaction of the following
criteria, Systemax will be granted Thirty Thousand (30,000) warrants of
XXXXxxx.xxx stock at an exercise price equal to the Nasdaq closing market
bid price of the shares on the day prior to the date of the grant as
published in the Wall Street Journal:
a.) The Promotional Placement results in fifteen thousand new.
Customer accounts within (6) months from the Shipping Date;
and
b.) Systemax is not in breach of the Agreement.
3.4 Reports. During the Term, XXXXxxx.xxx shall track and document the
number of referrals which occurred and the number of Customers registered
during the previous month under the Agreement. Each party shall be entitled
to an accounting relative to Product units shipped and Customer referrals.
3.5 Referral Information. Systemax will not disclose to any third party
any information disclosing that a specific end-user traveled to the Site
via any Promotional Placement, or any other information which can be used
to specifically identify a user of the Site, or use or permit any third
party to use any such information to target communications to end-users or
to otherwise specifically solicit end-users.
Section 4. Term and Termination
The term of this Agreement (the "Term") will begin on the first Product
shipping date (the "Shipping Date") and, unless earlier terminated below,
shall end one (1) year from the Shipping Date. Sections 3.1, 3.2, 5 and 6
will survive any termination or expiration of the Term.
XXXXxxx.xxx, in its sole discretion, may terminate the Agreement in the
event that, after six (6) months, less than five (5%) percent of Product
units shipped, net of all returns, result in the activation of a Customer
account. At the end of the Term, XXXXxxx.xxx, in its sole discretion, may
renew the Agreement on its terms for a period of one (1) year in the event
that more than ten (10%) percent of Product units shipped, net of all
returns, result in the activation of a Customer account.
Section 5. Representations and Warranties/Indemnity
5.1 Representations and Warranties. Each party hereto hereby represents
and warrants that it has the legal power and authority to enter into this
Agreement and that this Agreement will not result in the breach of any
prior agreement. XXXXxxx.xxx hereby represents and warrants (a) that it is
a bank holding company for BankPhiladelphia, formerly Peoples Thrift
Savings Bank, a state chartered bank with four (4) offices in PA, and (b)
it is a duly incorporated company registered with the Securities and
Exchange Commission with its common stock publicly traded on Nasdaq under
the symbol USAB.
5.2 Indemnity. XXXXxxx.xxx will defend, indemnify and hold Systemax
harmless from and against any claims, costs, losses and damages
(collectively, "Liabilities") arising out of any third party claim made
against Systemax relating to: (a) the Site or the contents thereof
(excluding any items provided by Systemax); or (b) any items provided to
Systemax by XXXXxxx.xxx for use in the Product. Systemax will defend,
indemnify and hold XXXXxxx.xxx harmless from and against any Liabilities
arising out of any third party claim made against XXXXxxx.xxx relating to:
(aa) the Product or the contents thereof (excluding any items provided by
XXXXxxx.xxx); or (bb) any items provided to XXXXxxx.xxx by Systemax for use
on or in the Site. The indemnified party will promptly notify the
indemnifying party of any claim for which it seeks indemnification, and
will permit the indemnifying party to control the defense and settlement of
any such claim (provided, that the indemnifying party shall not enter into
any settlement which adversely affects any rights or interests of the
indemnified party without the indemnified party's prior written consent).
Section 6. General Provisions
6.1 LIMITATIONS. NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT). NEITHER PARTY WILL HAVE ANY LIABILITY FOR ANY
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) IN
CONNECTION WITH THIS AGREEMENT.
6.2 Ownership. As between the parties: (a) XXXXxxx.xxx retains all
right, title and interest in and to the Site and all technology and content
contained or used therein or thereon (other than technology or content
supplied by Systemax), along with all associated intellectual property
rights; and (b) Systemax retains all right, title and interest in and to
the Product and all technology and content contained or used therein (other
than technology or content supplied by XXXXxxx.xxx), along with all
associated intellectual property rights.
6.3 Confidentiality. Neither party will issue any press releases, make
any other disclosures regarding this Agreement or its terms or the
relationship between the
parties, or use the other party's trademarks, logos, trade names or other
proprietary marks (except as permitted by Section 2.4), without the other
party's prior written consent. Further, the parties will abide by the terms
and conditions of their Nondisclosure Agreement dated as of the date hereof
and attached hereto as Exhibit A with respect to Confidential Information
(as defined in the Nondisclosure Agreement) received by either party as a
result of this Agreement. It is acknowledged that the intent of parties
that a press release will be made regarding this agreement by Systemax and
XXXXxxx.xxx will not unreasonably refuse to approve this communication
within 7 days of presentation. Time is of the essence.
6.4 Exclusivity. For the duration of the Term, Systemax will not place
any Competitive Marketing on or in the Product during the Term nor any
renewal period.
6.5 Notices. Notices and other communications required or permitted to
be given hereunder shall be given in writing and delivered in person, sent
via certified mail, or delivered by nationally-recognized courier service,
properly addressed and stamped with the required postage, to the person
signing this agreement on behalf of the applicable party at its address
specified above (and with a copy to the applicable party's General Counsel
at such address) and shall be deemed effective upon receipt. Either party
may from time to time change the person to receive notices or its address
by giving the other party notice of the change in accordance with this
section.
6.6 Miscellaneous. No waiver of any provision of this Agreement shall
constitute a continuing waiver, and no waiver shall be effective unless
made in a signed writing. The parties are independent contractors, and
nothing herein shall be construed to create a partnership, joint venture,
franchise or agency relationship. Neither party has any authority to enter
into any agreements on behalf of the other. Neither party may assign this
Agreement or its rights or obligations hereunder without the other party's
prior written consent, which shall not be unreasonably withheld. This
Agreement contains the entire understanding of the parties with respect to
the subject matter hereof, and cannot be amended except by a writing signed
by each party.
ACCEPTED AND AGREED:
XXXXxxx.xxx: Systemax, Inc.:
By: /s/ xxxxxxxxxxxxxxxx By:
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Name: xxxxxxxxxxxxxxxx Name:
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Title: Vice Chairman Title:
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Date: 8/18/99 Date:
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EXHIBIT A
MUTUAL NONDISCLOSURE AGREEMENT
This Nondisclosure Agreement (this "Agreement"), dated as of 8/18/99 is made
between XXXXxxx.xxx a Pennsylvania corporation, and Systemax. XXXXxxx.xxx and
Systemax would like to protect the confidentiality of, maintain their respective
rights in and prevent the unauthorized use and disclosure of their valuable
confidential information. Accordingly, XXXXxxx.xxx and Systemax, hereby agree
as follows:
1. Confidential Information
As used in this Agreement, "Confidential Information" means all nonpublic
information disclosed by one party or its agents (the "Disclosing Party") to the
other party (the "Receiving Party") that is designated as confidential or that,
given the nature of the information or the circumstances surrounding its
disclosure, reasonably should be considered as confidential. Confidential
Information includes, without limitation (i) nonpublic information relating to
the Disclosing Party's technology, customers, business plans, promotional and
marketing activities, finances and other business affairs, and (ii) third-party
information that the Disclosing Party is obligated to keep confidential.
2. Exclusions
Confidential Information does not include any information that (i) is or
becomes publicly available without breach of this Agreement, (ii) can be shown
by documentation to have been known to the Receiving Party at the time of its
receipt from the Disclosing Party, (iii) is received from a third party who did
not acquire or disclose such information by a wrongful or tortious act, or (iv)
can be shown by documentation to have been independently developed by the
Receiving Party without reference to any Confidential Information. Confidential
Information may be contained in tangible materials, such as drawings, data,
specifications, reports and computer programs, or may be in the nature of
unwritten knowledge.
3. Use of Confidential Information
The Receiving Party may use Confidential Information only in pursuance of
its business relationship with the Disclosing Party. Except as expressly
provided in this Agreement, the Receiving Party will not disclose Confidential
Information to anyone without the Disclosing Party's prior written consent. The
Receiving Party will take all reasonable measures to avoid disclosure,
dissemination or unauthorized use of Confidential Information, including, at a
minimum, those measures it takes to protect its own confidential information of
a similar nature. The Receiving Party will not export any Confidential
Information in any manner contrary to the export regulations of the United
States.
4. Receiving Party Personnel
The Receiving Party will restrict the possession, knowledge and use of
Confidential Information to its employees, contractors and entities controlled
by it (collectively, "Personnel") who (i) have a need to know Confidential
Information in connection with the parties' business relationship, and (ii) have
executed written agreements obligating them to protect the Confidential
Information.
5. Disclosures to Governmental Entities
The Receiving Party may disclose Confidential Information as required to
comply with binding orders of governmental entities that have jurisdiction over
it, provided that the Receiving Party (i) gives the Disclosing Party reasonable
written notice to allow the Disclosing Party to seek a protective order or other
appropriate remedy, (ii) discloses only such information as is required by the
governmental entity, and (iii) and uses commercially reasonable efforts to
obtain confidential treatment for any Confidential Information so disclosed.
6. Ownership of Confidential Information
All Confidential Information will remain the exclusive property of the
Disclosing Party. The Disclosing Party's disclosure of Confidential Information
will not constitute an express or implied grant to the Receiving Party of any
rights to or under the Disclosing Party's patents, copyrights, trade secrets,
trademarks or other intellectual property rights.
7. Notice of Unauthorized Use
The Receiving Party will notify the Disclosing Party immediately upon
discovery of any unauthorized use or disclosure of Confidential Information or
any other breach of this Agreement by Receiving Party. The Receiving Party will
cooperate with the Disclosing Party in every reasonable way to help the
Disclosing Party regain possession of such Confidential Information and prevent
its further unauthorized use.
8. Return of Confidential Information
The Receiving Party will return or destroy all tangible materials embodying
Confidential Information (in any form and including, without limitation, all
summaries, copies and excerpts of Confidential Information) promptly following
the Disclosing Party's written request. At the Disclosing Party's option, the
Receiving Party will provide written certification of its compliance with this
Section.
9. Injunctive Relief
The Receiving Party acknowledges that disclosure or use of Confidential
Information in violation of this Agreement could cause irreparable harm to the
Disclosing Party for which monetary damages may be difficult to ascertain or an
inadequate remedy. The Receiving Party therefore agrees that the Disclosing
Party will have the right, in addition to its other rights and remedies, to seek
injunctive relief for any violation of this Agreement.
10. Scope; Termination
This Agreement is intended to cover Confidential Information disclosed by
each party both prior and subsequent to the date hereof. This Agreement
automatically will terminate upon the completion or termination of the parties'
business relationship; provided, however, that each party's obligations with
respect to the other party's Confidential Information will survive for five (5)
years following such completion or termination.
11. Independent Development
The Disclosing Party acknowledges that the Receiving Party may currently or
in the future be developing information internally, or receiving information
from other parties, that is similar to the Confidential Information.
Accordingly, nothing in this Agreement will be construed as a representation or
agreement that the Receiving Party will not develop or have developed for it
products, concepts, systems or techniques that are similar to or compete with
the products, concepts, systems or techniques contemplated by or embodied in the
Confidential Information, provided that the Receiving Party does not violate any
of its obligations under this Agreement in connection with such development.
12. Miscellaneous
12.1 This Agreement will not create a joint venture, partnership or other
formal business relationship or entity of any kind, or an obligation to form any
such relationship or entity. Each party will act as an independent contractor
and not as an agent of the other party for any purpose, and neither will have
the authority to bind the other.
12.2 This Agreement constitutes the entire agreement between the parties
relating to the matters discussed herein and may be amended or modified only
with the mutual written consent of the parties. Each party's obligations
hereunder are in addition to, and not exclusive of, any and all of its other
obligations and duties to the other party, whether express, implied, in fact or
in law. Subject to the limitations set forth in this Agreement, this Agreement
will inure to the benefit of and be binding upon the parties and their
respective successors and assigns.
12.3 Any failure by either party to enforce the other party's strict
performance of any provision of this Agreement will not constitute a waiver of
its right to subsequently enforce such provision or any other provision of this
Agreement.
12.4 If a provision of this Agreement is held invalid under any applicable
law, such invalidity will not affect any other provision of this Agreement that
can be given effect without the invalid provision. Further, all terms and
conditions of this Agreement will be deemed enforceable to the fullest extent
permissible under applicable law, and, when necessary, the court is requested to
reform any and all terms or conditions to give them such effect.
12.5 This Agreement will be governed by internal laws of the State of
Washington, without reference to its choice of law rules. Exclusive jurisdiction
over and venue of any suit arising out of or relating to this Agreement will be
in the state and federal courts of King County, Washington. This Agreement may
be executed by facsimile and in counterpart copies.
The parties have executed this Agreement as of the date first written
above.
Systemax, Inc. XXXXxxx.xxx, Inc.
By: By: /s/ xxxxxxxxxxxxxxxx
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Title: Title: Vice-Chairman
