Exhibit 10.33
SERVICE AGREEMENT
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This Service Agreement (the "Agreement") is made and entered into as of the
1st day of June, 1998 by and between RMH Teleservices, Inc., whose mailing
address is 00 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000 (hereinafter referred
to as "Telemarketer") and Consumer Membership Services, Inc., whose mailing
address is 0000 Xxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxx 00000 (hereinafter referred to
as "Client").
W I T N E S S E T H:
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WHEREAS, Client markets to the general public various membership services
products; and
WHEREAS, Client markets and can market its products through various
distribution methods, including through direct response and through
telemarketing; and
WHEREAS, in some instances Client may market products which are provided by
an independent third party and administered by Client in which case the products
shall be marketed in the name of the independent party; and
WHEREAS, Telemarketer has the facilities and staffing to support Client's
direct marketing of membership services products through outbound telemarketing
and has on its staff individuals who shall be authorized to solicit and accept
enrollments for products marketed by Client; and
WHEREAS, Client and Telemarketer desire to enter into this Agreement for
the purpose of setting forth the services which Telemarketer shall provide to
Client and the terms, conditions and limitations under which such services shall
be provided;
NOW, THEREFORE, IN CONSIDERATION of the premises, and of the mutual
promises and covenants contained herein, and other consideration (the receipt
and sufficiency of which is hereby acknowledged by both parties) Telemarketer
and Client hereby agree as follows:
1. SERVICES PROVIDED BY TELEMARKETER. The services to be provided by
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Telemarketer under this Agreement shall consist of contacting by telephone those
individuals who have been identified by Client to receive a call and making
presentations (such contacts being hereinafter referred to as "telephone
presentations") pertaining to one or more of the products of Client. The persons
who make the telephone calls to such individuals shall be compensated directly
by Telemarketer and shall receive no payment or compensation whatsoever from
Client. The relationship between Telemarketer and Client shall be strictly that
of independent contractors.
2. TELEMARKETER RESPONSIBILITIES. (a) The persons who shall make the
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telephone presentations contemplated by this Agreement (such persons being
referred to hereinafter collectively as the "Representatives" and individually
as a "Representative") shall strictly adhere to the telephone scripts and
written materials furnished to the Telemarketer by Client from time to time for
use by such Representatives. The Representatives and Telemarketer shall strictly
observe any and all Standards of Conduct and Performance for each market which
shall be provided in writing to such Representatives and Telemarketer and which
may be amended from time to time. In the event any state or other governmental
authority requires that any Representative(s) be licensed or registered to sell
Client's product, Client shall inform Telemarketer in writing and thereafter
each Representative soliciting sales of Client's product in the affected
jurisdiction shall be licensed or registered in accordance with instructions
provided by Client. Any person who shall be licensed or registered as described
above shall for the purposes of this Agreement be referred to as a "Licensed
Representative."
(b) Telemarketer shall use its best efforts to assure that the
services provided under this Agreement are of the highest quality. In that
connection, Telemarketer shall implement and maintain an ongoing program of
observation and monitoring of telephone presentations and an ongoing
verification program for all enrollments in and purchases of products offered by
or through Client. In addition, Telemarketer shall provide Client with the names
and telephone numbers of persons who request that they not receive future
telephone calls made by or on behalf of Client. Client shall have the right to
have access from time to time to the offices of Telemarketer for the purpose of
performing on-site audits and inspections to ensure that Telemarketer and its
Representatives are discharging their respective obligations and duties under
this Agreement strictly in accordance with the terms, conditions and provisions
contained herein.
(c) Client shall have the right so often as it desires to monitor the
services performed by Telemarketer. Telemarketer, at its expense, shall install
in its offices appropriate equipment and provide reasonable facilities in its
offices so that Client or its designees may monitor the telephone presentations
from the offices of Telemarketer and from other locations.
(d) Telemarketer shall report on its activities and results to Client
or Client's designee, including daily operating results, by product, by
campaign, and by campaign month, on a schedule required by Client, and to make
such other reports available as may be requested by Client.
3. CONFIDENTIALITY. (a) It is understood that, in working on any of
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the Client's projects, Telemarketer will come into possession of certain
proprietary information that belongs to Client or to a third party to which
Client is responsible for confidentiality. Such proprietary information
includes, but is not limited to, marketing practices, product features, scripts,
marketing records and reports, customer records, telephone call lists and
mailing lists. Telemarketer agrees that it will not willfully or negligently
divulge any such information and may not under any circumstances divulge any
such information to third party without the prior written consent of Client.
Telemarketer further acknowledges that as between Client and
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Telemarketer, all such information and records are the sole property of Client,
and Telemarketer shall acquire no rights whatsoever in or to them. Telemarketer
will institute such procedures and will cause the Representatives to execute
such written agreements as shall be necessary or appropriate to ensure that the
confidentiality of Client's proprietary information is strictly maintained. At
any time requested by Client, Telemarketer shall promptly transfer and deliver
to Client all such information and records in the manner and timeframe
designated by Client.
(b) The Telemarketer shall not, without first receiving written
permission from Client, in any manner, advertise, publish or use as reference
the fact that the Telemarketer has contracted to furnish to Client the services
specified herein. This contract is confidential, and the Telemarketer shall not
disclose the details hereof to any third party except to the extent required in
the performance hereof.
(c) It is further understood that neither party shall, during the
term of this Agreement and for two years thereafter, hire or recruit for hire
any person who is or has been within the preceding year an employee of the other
party, unless such party obtains the express written permission of the other
party.
(d) During the duration of this Agreement, Telemarketer agrees not to
solicit nor telemarket Bonus Products for any provider of membership or club
services besides Client within any of Telemarketer's calling centers and
locations or those of any telemarketer affiliated with Telemarketer where
Telemarketer conducts telemarketing for Client. Bonus Products are any club or
membership products where the customer receives full benefits of membership for
an initial period of time without being charged a fee or where the fee for the
initial period is paid by the sponsoring organization. Telemarketer further
agrees that Client may audit any books and records of Telemarketer to verify
compliance with this provision.
(e) The obligations in sub-paragraphs 3(a) through 3(c) shall survive
any termination of this Agreement.
4. FEES AND PAYMENT TERMS. (a) Client shall pay Telemarketer an hourly
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rate as described in the attached Exhibit A, for each Representative Hour
worked. "Representative Hour" is defined as an hour of actual talk time, call
wrap up time, and normal wait time between calls each Representative spends
working on a campaign, and does not include non-productive time such as break
time, lunch time, system down time or training time, whether or not the
Representative is logged on the system during such time periods. A
Representative Hour also does not include time spent in verifying, confirming or
otherwise completing a sale by persons other than the Representative making the
telephone presentation. It is expressly understood and agreed that the only
compensation payable hereunder or for the services of Telemarketer shall be as
set forth in Exhibit A attached hereto and Client shall not in any manner
compensate Telemarketer on the basis of whether or to what extent the telephone
presentations result in the sale of any product of Client. Telemarketer
expressly warrants and agrees that Telemarketer will not pay any Representative
any compensation or commission on the basis of whether or to what extent the
telephone presentations made by a Representative result in the sale of any
product.
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(b) Telemarketer shall submit to Client or its designee invoices not
more often than bi-weekly, itemized by product, by campaign, and by campaign
starting date. Such invoices shall be paid by Client no later than the 30th day
after receipt of the invoice by Client. Telemarketer understands and agrees that
once it submits an invoice to Client, it may not for any reason thereafter
increase the fees payable by Client for the period covered by the invoice.
(c) Telemarketer, recognizing the sensitivity and confidentiality of
information agrees that Client, at any reasonable time and place, and upon
reasonable notice, may audit the books and records of the Telemarketer, and
examine its employees, to verify compliance with the terms of this Agreement.
Furthermore, Client reserves the right to audit Telemarketer's telephone
records, licensing records, and other supporting information and records with
respect to the invoices. The relevant records will be maintained by Telemarketer
for two (2) years after invoicing pursuant to this Agreement.
5. COMPLIANCE WITH LAWS. Telemarketer shall conduct its telemarketing
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services on behalf of Client in accordance with all applicable federal, state
and local laws, as well as the Ethical Guidelines for Telemarketers published by
the Direct Marketing Association. Telemarketer will obtain and maintain any and
all licenses or permits required for the performance of the services
contemplated by this Agreement. Telemarketer shall comply in all respects with
the record keeping requirements of the Telemarketing and Consumer Fraud and
Abuse Prevention Act and the rules promulgated thereunder. Specifically,
Telemarketer shall retain the legal name, any fictitious name used, last known
home address and telephone number and job title(s) for each Representative
engaged in telephone sales on behalf of Client. If Telemarketer permits its
Representatives to use fictitious names, each such fictitious name shall be
traceable to only one employee. Records concerning any employee shall be
retained for a period of 24 months from the last date such employee is engaged
in telephone sales activity on behalf of Client and such records shall be stored
by Telemarketer in a form, manner, format and place as Telemarketer usually
keeps records in the ordinary course of its business.
6. INDEMNITY AND LIABILITY. Telemarketer agrees to defend, indemnify and
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hold harmless Client, its officers, directors, employees and affiliates from and
against any and all costs, liabilities, damages, judgments, penalties or fines,
including but not limited to reasonable attorney's fees, directly or indirectly
sustained or paid by Client or its affiliates, by suit, claim, settlement, or
otherwise in an individual or class action, by a private party or any agency of
any government, caused as a result of the breach of this Agreement, negligence
or willful misconduct of or by Telemarketer, its officers, directors, employees
or contractors. The obligations of this paragraph shall survive any termination
of this Agreement.
7. INSURANCE. Telemarketer shall maintain, during the term of this
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agreement, insurance coverage, including but not limited to, comprehensive
general liability insurance and worker's compensation insurance with aggregate
and per occurrence limits no lower than $1,000,000. Such insurance shall cover
all claims arising during the term of this Agreement whether or not brought
during such term and shall name Client as an additionally insured party.
Telemarketer shall furnish to Company upon request, certificates of such
insurance.
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8. WARRANTIES. Telemarketer warrants and represents that i) it has full
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right and authority to enter into and perform its responsibilities pursuant to
this agreement; ii) in performing its obligations under this agreement
Telemarketer will be and remain in compliance with all applicable laws and
regulations and will not infringe or violate any rights of any third parties.
The foregoing warranties shall survive any termination of this Agreement.
9. TERMINATION. Upon the breach by Telemarketer of any warranty or
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covenant contained herein, Client shall have the right to terminate this
Agreement immediately by giving written notice of termination to Telemarketer at
the address shown above. Either party may terminate this Agreement at any time
without cause by giving thirty (30) days written notice of termination to the
other party at the address shown above.
10. NOTICES. Telemarketer shall notify Client within 24 hours of any event
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which potentially may significantly impact Telemarketer's performance of this
Agreement, including but not limited to equipment failures, adverse weather
conditions, personnel/staffing problems, licensing problems, or any law, order,
regulation, or request of any federal, state or local governmental body. All
notices required or which may be provided hereunder shall be in writing and
addressed to the other party at the address set forth above and shall be deemed
given the day after sending, if sent by a nationally recognized overnight
courier service, or three days after sending, if sent by registered or certified
U. S. Mail.
11. ASSIGNMENT. This Agreement may not be assigned by either party
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without the written consent of the other. Also, Telemarketer may not subcontract
any part of the work being performed under this Agreement without the written
consent of Client.
12. MISCELLANEOUS. This Agreement shall be construed in all respects
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under the laws of the State of Texas without regard to the principles of
conflicts of laws thereof. If any part or parts shall be held to be void or
unenforceable, such part or parts will be treated as severable, leaving valid
the remainder of the Agreement. The parties agree that this Agreement contains
the entire agreement between the parties with respect to the subject matter
hereof, and that this Agreement may not be modified, changed or amended except
by written agreement executed by both parties and attached hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first set forth above.
TELEMARKETER CLIENT
RMH Teleservices, Inc. Consumer Membership Services, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ G. Xxxxxx Xxxxxx
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Name: Xxxxxx X. Xxxxxxxxx Name: G. Xxxxxx Xxxxxx
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Title: Senior Vice President Title: Executive Vice President, Marketing
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EXHIBIT A TO
SERVICE AGREEMENT BETWEEN
CONSUMER MEMBERSHIP SERVICES, INC.
AND
RMH TELESERVICES, INC.
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Client shall compensate Telemarketer for each Representative Hour worked,
in accordance with the following:
A. NO LICENSE OR REGISTRATION REQUIRED:
Hours Business Partner
Dates Per Month JCPenney Market Market
February 1, 1997 through All [REDACTED DUE TO REQUEST [REDACTED DUE TO
October 31, 1998 FOR CONFIDENTIAL TREATMENT] REQUEST FOR
CONFIDENTIAL
TREATMENT]
B. MOTORCLUB OR SIMILAR REGISTRATION REQUIRED:
Hours Business Partner
Dates Per Month JCPenney Market Market
February 1, 1997 through All [REDACTED DUE TO REQUEST [REDACTED DUE TO
October 31, 1998 FOR CONFIDENTIAL TREATMENT] REQUEST FOR
CONFIDENTIAL
TREATMENT]
The rates provided herein for categories A and B will not change until
November 1, 1998 without mutual agreement of the parties; provided however, that
such agreement as to the change in rates does not affect the termination
provision provided in the Agreement.
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