CONTRACT OF JUNE 12, 1996 WITH
ACTIVE ASSET RECOVERY, INC.
CONFORMED COPY
AGREEMENT
THIS AGREEMENT ("Agreement") dated June 12, 1996 is by and
between Active Asset Recovery, Inc., a New York corporation ("Active") with an
office at One Xxxx Xxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxx Xxxx 00000, and
United States Properties, Inc., a Pennsylvania corporation ("U.S. Properties")
with an office at 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx Xxx,
Xxxxxxxx, Xxxxxxxxxxxx 00000-0000.
Background
Whereas, Active is engaged in the business of entering into
corporate trading transactions with clients pursuant to which in exchange for
merchandise or other assets Active issues trade credits redeemable by such
clients (with or without additional cash) to purchase from Active media, goods
and/or services;
Whereas, subject to the terms and conditions set forth in this
Agreement, U.S. Properties desires to assist Active in locating potential
clients to enter into corporate trading transaction.
Terms
IN CONSIDERATION of the foregoing premises, mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Engagement as a Finder. Subject to the terms and conditions
set forth herein, Active hereby engages U.S. Properties, and U.S. Properties
hereby accepts such engagement, as an independent contractor to act as a finder
in connection with possible corporate trading transactions for media, goods
and/or services (collectively, "Services") involving ACTIVE and third parties
who are preapproved by ACTIVE in writing as prospective clients (hereinafter
"Preapproved Client(s)").
2. Preapproval of Clients; Duties of Finder.
2.1 Active shall have the right (exercisable in its sole
discretion) to (i) preapprove or to decline preapproval of any third party
identified by U.S. Properties hereunder, and/or
(ii) decline to pursue any corporate trading transaction. All preapprovals of
Active must be in writing. In declining to preapprove any third party or to
pursue a proposed corporate trading transaction, Active will not incur any
liability for fees or compensation to U.S. Properties.
2.2 With respect to any Preapproved Client, U.S.
Properties covenants to (i) cause meetings to occur between Active and the
Preapproved Client (and will attend such meetings if requested), (ii) provide
Active with information concerning the Preapproved Client in the manner that
Active from time to time may request, and (iii) perform such other reasonable
services as Active may reasonably request in connection with closing any
corporate trading transaction with a Preapproved Client (e.g. follow-up phone
calls, letters, introductions, etc.).
2.3 U.S. Properties covenants that it shall not utilize
the services of any other persons or entities in introducing any third party as
a potential client to ACTIVE without first receiving ACTIVE's prior written
consent to such utilization.
3. Relationship of Parties. U.S. Properties on the one hand, and
Active on the other, acknowledge and agree that (i) this Agreement does not
create a principal/agent relationship, and neither U.S. Properties nor Active
shall have the right, power or authority, whether express or implied, to bind
the other; (ii) each party is independent of the other, will utilize its own
employees and work during the hours it determines, at its own place of business,
or such other place of its choice; and (iii) neither party will be covered under
the other party's benefit plans nor will either party be subject to any
withholding for any taxes, insurance or benefit plans of the other entity.
4. Compensation.
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4.1 Subject to the terms and conditions of this Agreement,
in the event that Active closes a corporate trading transaction, with a
Preapproved Client as a direct result of meetings caused by U.S. Properties,
U.S. Properties shall receive a finders fee ("Finders Fee") equal to five
percent (5%) of "Divisible Profits", as defined and calculated in accordance
with Section 4.2 below. The Finders Fee shall be the sole compensation payable
to U.S. Properties for services rendered hereunder.
4.2 For purposes of this Agreement, "Divisible Profits"
shall be calculated on a transaction by transaction basis based on whether a
corporate trading transaction is a (i) trade for trade transaction (a
transaction in which a Preapproved Client remits merchandise or other assets
(collectively referred
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to herein as "Merchandise")) to Active for remarketing in return for trade
credits usable to pay for Services without the Preapproved Client being
obligated to spend additional cash for such Services), or (ii) a cash blend
transaction (a transaction in which a Preapproved Client remits Merchandise in
return for trade credits usable to partially pay for Services in addition to a
partial cash expenditure).
In the case of a trade for trade transaction, Active shall
calculate Divisible Profits by subtracting from the proceeds actually received
by Active from remarketing a Preapproved Client's Merchandise: (i) the
out-of-pocket costs incurred by Active relating to such remarketing and the
transaction; (ii) any cash payments required to be made by Active to the
Preapprove Client or otherwise; and (iii) an estimate of the cost of the
Services which Active will be required to provide the Preapproved Client as a
result of the transaction. To the extent Active's estimate of the cost of
Services is in excess of the actual cost of Services incurred in connection with
a trade for trade transaction, Active will make an additional payment to U.S.
Properties to adjust the amount of the Finders Fee previously paid to U.S
Properties so that such payment plus the additional payment results in U.S.
Properties receiving total Finders Fee payments equal to what U.S. Properties
would have initially received had the original estimate of the cost of Services
been accurate. In a trade for trade transaction, U.S. Properties shall be paid
it's Finders Fee payment within thirty (30) days of Active actually receiving
the cash proceeds from the remarketing of the Preapproved Client's Merchandise.
In the case of a cash blend transaction, Active shall initially
calculate Divisible Profits by subtracting from the cash proceeds actually
received from the remarketing of the Preapproved Client's Merchandise: (i) the
out of pocket costs and expenses incurred by Active relating to remarketing and
the transaction; (ii) any cash payments required to be made by Active to the
Preapproved Client or otherwise; and (iii) if applicable in Active's sole
judgment, an estimate of the amount by which the cost of Services is expected to
exceed cash payments by the Preapproved Client for Services. Active will make an
adjustment payment to U.S. Properties after the Preapproved Client has utilized
all or its total trade credits if Active's estimate of the cost of Services
turns out to be in excess of the actual cost of Services incurred by Active in
connection with a cash blend transaction. In a cash blend transaction, U.S.
Properties shall be paid its initial Finders Fee payment within thirty (30)
days of Active actually receiving the cash proceeds from remarketing of the
Preapproved Client's Merchandise.
Further Divisible Profits in a cash blend transaction shall be
calculated by Active in each month that the Preapproved Client utilizes the
trade credits issued by Active to purchase Services
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and Active is paid (and actually receives) the required cash amount by the
Preapproved Client for the Services rendered. This portion of Divisible Profits
shall be equal to the difference between the cash revenue actually received by
Active from the Preapproved Client in connection with the purchase of Services
minus the cost of such Services and any out of pocket costs and expenses
incurred by Active. If Active's costs and expenses exceed the related revenue
actually received by Active, Active will have suffered a "Divisible Loss". This
Divisible Loss will be offset against future Divisible Profits and will result
in eliminating or reducing futures until such Divisible Loss is fully offset
against future Divisible Profits. Any Finders Fee payments based on further
Divisible Profits in a cash blend transaction shall be paid within thirty (30)
days of Active actually receiving payment for the Services purchased by the
Preapproved Client if there is no unapplied Divisible Loss.
5. Confidentiality
5.1 Active an the one hand, and U.S.
Properties on the other hand, acknowledge, covenant and agree that any and all
information shared in connection with the others' business as a result of this
Agreement and the performance of the obligations hereunder including, without
limitation, client lists, supplier lists, financing techniques and sources and
financial statements is confidential and proprietary information of the
disclosing party. Notwithstanding anything to the contrary contained herein, the
ongoing communications of Active or any of its affiliates with a Preapproved
Client covered by the terms of this Agreement shall not be deemed a breach of
this confidentiality provision.
Each party agrees that it will not permit the
duplication, use or disclosure of any such confidential and proprietary
information to any person (other than an employee, officer, director, agent or
representative of the receiving party or an affiliate of the receiving party who
must have such information for the performance of its obligations hereunder),
unless such duplication, use or disclosure is specifically authorized by the
other party. Each party shall take all reasonable precautions to prevent such
disclosures.
For the purposes of the Agreement, the term
"confidential and proprietary information" is not meant to include (i) any
information which, at the time of disclosure is, or thereafter through no fault
of the other party becomes, generally known by the public; (ii) any information
disclosed to the other party by any third party and the disclosure of which does
not violate any legal obligation of any such third party to either Active (or
any affiliate of Active) or U.S. Properties; and (iii) any information which is
known to the other party prior to the disclosure.
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5.2 U.S. Properties acknowledges that all originals
and copies of materials, records and documents provided to it by Active (or any
of its affiliates, including, without limitation, Active Media Services, Inc.
("AMS")) or coming into its possession or under its control during the Term of
this Agreement which pertain to Active's (or any of its affiliates, including,
without limitation, AMS') business whether or not confidential information, are,
and shall at all time remain, the sole property of Active (or its respective
affiliate), respectively. Upon the termination of this Agreement, or upon
request by Active at any time, U.S. Properties shall promptly deliver all copies
of such materials to Active or destroy copies of such material in accordance
with Active's written instructions.
5.3 Active acknowledge that all originals and copies
of materials, records and documents provided to it by U.S. Properties or coming
into its possession or under its control during the term of this Agreement which
pertain to U.S. Properties' business whether or not confidential information,
are, and shall at all time remain, the sole property of U.S. Properties. Upon
the termination of this Agreement, or upon request by U.S. Properties at any
time, Active shall promptly deliver all copies of such materials to U.S.
Properties or destroy the copies of such material in accordance with U.S.
Properties written instructions.
6. Indemnification.
6.1 U.S. Properties hereby releases Active and its
affiliates (including, without limitation, AMS), and their officers, directors,
and employees from any and all claims, costs, damages, expenses and/or other
liabilities of any kind or nature, including, without limitation any
environmental liabilities, arising in connection with any real property or
interests in real, property purchased by U.S. Property or by any affiliate or
related entity of U.S. Property in connection with any corporate trading
transaction. U.S. Properties hereby indemnifies and agrees to hold harmless
Active, its affiliates (including, without limitation, AMS), their officers,
directors, and employees and/or each of them (collectively the "Active
Indemnified Party") from any and all costs, claims, expenses, judgments or
otherwise including, without limitation, reasonable attorney's fees and
disbursements, incurred by any Active Indemnified Party in any action or
proceeding between an Active Indemnified Party and U.S. Properties or between
any Active Indemified Party and any third party or otherwise, arising from,
related to, or incident to: (i) any breach or alleged breach of any warranty,
representation, agreement or inducement herein made by U.S. Properties; (ii) any
and all acts, omissions or representations of U.S. Properties, any of its
affiliates, or any of their respective officers, directors, employees,
shareholders or other agents made or taken under this Agreement, including,
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without limitation, any agreement to purchase or the purchase of real property
or interests in real property by U.S. Properties or any affiliate or related
entity of U.S. Properties in connection with a corporate trading transaction; or
(iii) any environmental or other liability relating to any real property or
interests in real property purchased by U.S. Properties in connection with a
corporate trading transaction.
6.2 Active hereby indemnifies and agrees to hold harmless
U.S. Properties, its affiliates, their officers, directors, and employees and/or
each of them (collectively, the "U.S. Properties Indemnified Party") from any
and all costs, claims, expenses, judgments or otherwise including, without
limitation, reasonable attorney's fees and disbursements, incurred by any U.S.
Properties Indemnified Party in any action or proceeding between a U.S.
Properties Indemnified Party and Active or between any U.S. Properties
Indemnified Party and any third party or otherwise, arising from, related to, or
incident to (i) any breach or alleged breach of any warranty, representation,
agreement or inducement herein made by Active, or (ii) any and all acts,
omissions or representations of Active, any of its affiliates, or any of their
respective officers, directors, employees, or shareholders made or taken under
this Agreement.
7. Term. The term ("Term") of this Agreement shall commence on
the date first written above and shall terminate three (3) years thereafter,
provided, however, that after May 1, 1997, either party hereto may terminate
this Agreement by providing the other party with sixty (60) days' prior written
notice of termination.
8. Nonsolicitation; Noncompetition. During the Term of this
Agreement and for one (1) year thereafter, U.S. Properties shall not, directly
or indirectly:
(i) introduce any Preapproved Client, introduced to
Active hereunder, to any person or entity, except Active (or an affiliate of
Active or AMS), who or which engages in transactions and provides services
similar to that provided by Active or any affiliate of Active (including without
limitation AMS); or
(ii) solicit, induce or attempt to induce any
Preapproved Client, client or other business relation of Active or any affiliate
thereof (including without limitation AMS) to cease doing business with Active,
AMS and/or any affiliate thereof or in any way interfere with the relationship
between Active, AMS and/or any affiliate thereof and any such Preapproved
Client, client or other business relation thereof.
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9. Non-Circumvention. During the Term of this Agreement and for
a period of one (1) year after its termination, Active shall not engage in any
corporate trading transactions with any Preapproved Client introduced to Active
by U.S. Properties without paying the Finders Fee which would have been required
hereunder if the activity had occurred during the Term of this Agreement;
provided that U.S. Properties shall have caused the meetings to have occurred
which directly resulted in the corporate trading transaction, shall have
fulfilled its responsibilities under this Agreement, and shall not be in default
in the due observance of any covenant or term of this Agreement.
10. Miscellaneous.
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10.1 U.S. Properties represents and warrants that it is not a
party to any agreement with any other corporate trading company or any other
agreement with any other party that would prohibit U.S. Properties from entering
into this Agreement or from performing its duties or obligations hereunder.
10.2 In the event that any covenant contained herein shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its extending for too long a period of time or over too large a geographical
area or by reason of it being too extensive in any other respect, it shall be
deemed reformed to extend only over the longest period of time for which it may
be enforceable, and/or over the largest geographical area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it may
be enforceable, all as determined by such court in such action.
10.3 If any term or provision of this Agreement shall be
invalid or unenforceable to any extent or in any application, the remainder of
this Agreement shall not be affected thereby, and each and every term and
provision of this Agreement shall be valid and enforceable to the fullest extent
and in the broadest application permitted by law.
10.4 The terms and provisions of this Section 10 and Sections
5, 6, 8 and 9 together with all subsections contained therein, shall survive the
termination of this Agreement.
10.5 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to
principles of choice of laws. The parties further agree that the exclusive forum
for resolving any disputes relating to this Agreement shall be New York.
10.6 No modification or waiver of the terms of this Agreement
shall he enforceable unless in writing and executed by both parties. No delay or
omission by either party in exercising
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any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof. No waiver of any provision of this Agreement
shall be deemed or shall constitute a continuing waiver of such provision or a
waiver of any other provision, unless otherwise expressly provided for in a
writing signed by both parties. U.S. Properties shall not be permitted to assign
its rights or delegate its duties under this Agreement, without the prior
written consent of ACTIVE, and any assignment or delegation in violation of this
Agreement shall be void. This Agreement shall inure to the benefit of, and be
enforceable by each of the respective parties hereto and/or its successors and
permitted assigns.
10.7 All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or, if mailed, when mailed by United States
certified or registered mail, postage prepaid, or if telecopied (with delivery
confirmed), or sent by overnight mail (with delivery confirmed), to the parties
at their respective addresses first written above (or at such other address as
shall he given in writing by one party to the other).
10.8 If a party hereto prevails in a proceeding for
damages or injunctive relief, that party, in addition to other relief, shall be
entitled to reasonable attorneys' fees, costs and the expenses of litigation
incurred by such party in securing the relief granted by the court.
10.9 This Agreement contains the entire agreement between
the parties hereto and supersedes all prior oral or written agreements,
commitments or understandings between the parties hereto with respect to the
matters provided herein. No modification of this Agreement shall be binding on
the parties affected, unless set forth in writing and duly executed by the
parties affected.
10.10 This Agreement may be executed in any number of
counterparts by facsimile, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument. The section
headings of this Agreement are for
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convenience of reference and shall not affect the construction or interpretation
of any the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date set forth above.
ACTIVE ASSET RECOVERY, INC.
By: /C/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
UNITED STATES PROPERTIES, INC.
By: /C/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
Title: President
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