EXHIBIT 10.01
DEVELOPMENT & MARKETING AGREEMENT
This Agreement, effective as of June 1, 1998 (Effective Date), is by and
between SC Corporation, a Delaware corporation carrying on business as SC
Direct with a principal place of business at 00 Xxxxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxxxxx 00000 (SC), and CyberImaging Systems, Inc., a North Carolina
corporation with offices at 6040A - 000 Xxx Xxxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxxxx
00000 (CI).
PREAMBLE
WHEREAS, CI has developed imaging software that can be used to process,
modify and display scanned photos or digital images (the CI Software);
WHEREAS, SC is engaged in the manufacture, distribution and sale of certain
hair products, including without limitation, women's and men's wigs, hairpieces,
hair care peripheral products and hats (as further defined herein, the SC
Products);
WHEREAS, CI and SC want to enter into an agreement pursuant to which CI
will create a derivative work from the CI Software (the Joint Product) that will
incorporate photographic images of the SC Products and other related information
into the CI Software database for distribution (a) as part of a computer
hardware and software system that can be used by hair salons to take digital
photographs of customers for display and printing of images of hair styles and
SC Products and facilitate try-on sessions (the Salon System); (b) to SC to
facilitate direct catalog sales of SC Products by scanning non-digital
photographs mailed in to SC for display and printing of images of individuals
wearing SC Products (the Basic System); (c) on the Internet to facilitate home
imaging SC Product try-on sessions (the Internet System); (d) as part of a
computer hardware and software kiosk system to facilitate self-administered
imaging and SC Product try-on sessions (the Kiosk System); and (e) as part of a
portable computer hardware and software system to facilitate SC Product try-on
sessions at various facilities and locations, including without limitation,
hospitals, assisted care facilities and party-based marketing programs and other
such venues as SC may deem appropriate (the Portable System);
WHEREAS, CI will develop, maintain and sell or license the Joint Product
and each of the Salon System, the Basic System, the Internet System, the Kiosk
System and the Portable System (collectively, with the Joint Product, the
Systems); the Systems will be co-branded under certain of the SC and CI Marks;
SC and CI will both actively promote the Systems; and SC may act as a sales
agent for CI in the distribution of the Systems;
WHEREAS, CI will not develop, maintain, sell or license any software or
system that directly or indirectly promotes any products that compete with the
SC Products;
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and sufficiency of which are acknowledged by each of the parties hereto, the
parties covenant and agree as follows:
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1. Definitions. When capitalized in this Agreement, the following terms shall
have the respective meanings set forth below:
Agreement means this Development & Marketing Agreement, as it may be amended
from time to time.
CI Software has the meaning assigned thereto in the Preamble.
CI Customer List means a complete and accurate list of all of CI's customers
including current phone numbers and addresses, as that list is updated from time
to time pursuant to Section 6.2.
CI Xxxx(s) means any of the following marks: CYBERIMAGING and CYBERSTYLES VR and
such other trademarks, trade names, symbols or identifying marks as CI may adopt
from time to time for use in connection with the Systems.
CI's Standard License means the license pursuant to which purchasers of the
Systems will be permitted to use the Joint Product, as set forth in Exhibit A
attached hereto.
CI's Standard Sales Terms means the terms pursuant to which CI sells the
Systems, as set forth in Exhibit B attached hereto.
Client Photograph means a non-digital photograph of a consumer's face.
Commission Schedule means the schedule attached hereto as Exhibit C.
Competing Business means the manufacture, sale, marketing or distribution of
wigs, hairpieces, wig hair care peripheral products or hats or any other SC
Product.
Genesis Agreement has the meaning assigned thereto in Section 3.1.
Implementation Schedule means Exhibit D attached hereto, which sets forth the
implementation schedule for the Systems.
Joint Product has the meaning assigned thereto in the Preamble.
SC Product means any product manufactured, distributed or sold by SC and
identified in Exhibit E attached hereto, as that Exhibit may be amended from
time to time pursuant to Section 4.1 hereof.
Style Photograph means a photograph of a SC Product for use in any System
database.
SC Xxxx(s) means any of the following marks: XXXXX XXXXX; PAULA'S HAT BOX;
XXXXXXXXX XXXXXX; ESPECIALLY YOURS; CELEBRITY SECRETS; TOUCH OF CLASS;
XXXXXXXXXX COLLECTION; NATURAL IMAGE; and such other trademarks, trade names,
symbols or identifying marks as SC may adopt from time to time for use in
connection with the SC Products.
Term means the period from the Effective Date until this Agreement is terminated
in accordance with its terms.
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2. License Grants.
2.1 By SC. Subject to the terms and conditions of this Agreement, SC grants to
CI a royalty-free, non-exclusive, worldwide right and license (a) to copy, use
and display the Style Photographs; and (b) to use and display the SC Marks, in
each case solely in connection with CI's licensing, distribution, marketing,
advertising and promotion of the Joint Product as part of the Systems.
2.2 By CI. Subject to the terms and conditions of this Agreement, CI grants to
SC (a) a royalty-free, non-exclusive, worldwide right and license to copy, use
and display the Internet System for the marketing, advertising and promotion of
SC Products and to permit users of the SC web site to use the Internet System
(including without limitation, the right to download images) as it may be
implemented on any SC web site; and (b) a royalty-free, non-exclusive, worldwide
right and license to use and display the CI Marks solely in connection with SC's
licensing, distribution, marketing, advertising and promotion of the Joint
Product as part of the Systems.
3. Exclusivity.
3.1 CI Obligations. During the term of this Agreement and for a period of one
(1) year after the termination or expiration of this Agreement for any reason,
CI and its affiliates shall not:
(a) distribute or license to any third party any computer software that, in
the good faith judgment of SC, competes with the Joint Product, including
without limitation any CI Software that does not incorporate photographic images
of the SC Product; or
(b) incorporate into any CI Software any products of a third party who is
engaged, directly or indirectly, in any Competing Business. CI further agrees
not to enter into any agreement, directly or indirectly, including without
limitation, a joint venture, marketing, development, branding, distribution,
internet use or publication agreement, with any other third party engaged in any
Competing Business. If, in connection with the Joint Product or any System, CI
enters into any marketing or similar relationship or agreement with a third
party which is not engaged in a Competing Business, SC and the SC Marks shall be
accorded at least equal presence as CI and such third party in all signage,
marketing and promotional materials displayed in or on or related to the Joint
Product or System.
Notwithstanding the exclusivity of this paragraph 3.1, it is understood and
agreed that:
(i) CI may continue to offer the men's wig and hairpiece products of Genesis
Industrial Corporation under the terms of the agreement dated April 1, 1998
between CI and Genesis Industrial Corporation (Genesis) (the Genesis Agreement);
provided that, if the Genesis Agreement is eligible for renewal or terminates or
expires for any reason, or Genesis defaults under the Genesis Agreement, then CI
shall obtain SC's written approval before CI renews the Genesis Agreement or
waives any default or enters into a contract with a third party concerning such
products. or competing or similar products to those offered under the Genesis
Agreement; AND
(ii) CI may offer the CI Software to hair salons that promote the products of a
Competing Business except that in any such event, (A) under no circumstances
shall CI incorporate or assist a third party in incorporating the products of a
Competing Business into the CI Software; and (B) the SC Products shall not be
removed from the CI Software, but the CI Software licensed to such hair salons
will contain a mechanism to block out the SC Products. CI shall provide SC with
quarterly reports listing all hair salons which have been
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licensed such CI Software embodying the "block-out" feature.
3.2 SC Obligations. During the term of this Agreement, SC shall not promote
the imaging software of any third party, other than the CI Software; provided
however, that SC may incorporate the SC Products into other imaging software
systems.
4. Development Obligations.
4.1 Photography. SC shall, in accordance with the Implementation Schedule,
provide the initial Style Photographs to CI. SC shall bear all costs associated
with photographing the SC Products. From time to time but no more frequently
than four (4) times per year, as SC makes changes (including modifications,
additions or deletions) in the SC Product line, SC may provide updated Style
Photographs to CI.
4.2 Development. CI shall, in accordance with the Implementation Schedule,
incorporate the initial Style Photographs into the CI Software database to
create the Joint Product. Within sixty (60) days after each receipt from SC of
updated Style Photographs, CI will revise the Joint Product and make available a
new release including the updated Style Photographs. CI shall bear all costs
(other than as provided in Section 4.1) associated with, or related to, the
development, update, maintenance and distribution of the Joint Product and the
Systems.
4.3 Basic System & Salon System. In accordance with the Implementation
Schedule, CI will develop the Basic System and the Salon System.
4.4 Additional Development. In accordance with the Implementation Schedule, SC
and CI will jointly create specifications and mutually agree on milestones for
the development by CI and joint promotion of (a) the Internet System for
implementation on SC's web site; (b) the Kiosk System; and (c) the Portable
System. Such development shall be undertaken by CI at its own expense and the
resulting Systems will be jointly marketed and distributed by CI and SC pursuant
to the terms and conditions of this Agreement.
4.5 Marks. The Joint Product will display the SC Marks prominently in at least
equal size, frequency and proportion as other CI product sponsors, including
affixing such marks on the System components, on display screens in the Joint
Product and on hard copy output from the System; provided that the SC Marks
shall be the dominant brand names on the Kiosk System and the Portable System.
All SC Product depictions shall be appropriately identified as SC Products and
will bear SC trademark notices indicating ownership of the SC Marks by SC's
affiliate, SC Licensing Corp., and SC copyright legends, as applicable.
4.6 Acceptance. Release of each version of the Joint Product and the Systems
shall be subject to acceptance testing and inspection by SC to ensure that
depictions of SC Products and SC Marks meet SC's quality standards, as further
described in Section 6.8 and Section 8, and to ensure that the Joint Product and
Systems perform as contemplated herein. CI shall not release or distribute any
Joint Product or System without SC's written approval.
5. System Purchase. After successful completion of acceptance testing of the
Basic System pursuant to Section 4.6, SC shall purchase from CI two (2) Systems,
one System for use in the United States and one System for use in the United
Kingdom, in accordance with the CI Standard Sales Terms attached to this
Agreement as Exhibit B. The purchase price for the two (2) Systems shall be the
net amount of the list price for the Systems minus commission payments of SC in
accordance with Section 6.1 of this Agreement. SC's use of the Joint Product as
part of each of the Systems shall be subject to CI's Standard License except:
(a) that such license shall be a license for an unlimited number of users (i) in
the United States, as administered
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from SC's head office at the address first written above; (ii) in the United
Kingdom at any one site, each without payment of any additional fees by SC; and
(b) to the extent that any term set forth therein inhibits SC's ability to use
the System to serve its customers, as contemplated hereby.
6. Promotion & Sales.
6.1 Appointment of SC as Sales Agent; Commissions. Subject to the terms and
conditions of this Agreement, CI hereby appoints SC and SC accepts appointment
as CI's non-exclusive sales agent for licensing and sales of the Joint Product
and the Systems, respectively throughout the world. Except as the parties may
otherwise agree, all (a) Joint Product licensing will be in accordance with CI's
Standard License and will result in a direct license between the licensee and
CI; and (b) System sales will be made upon CI's Standard Sales Terms and will
result in a direct sale between CI and SC's customer. SC may elect either (1)
to pass sales leads to CI, in respect of which SC shall receive no compensation;
or (2) to consummate the license and sale as CI's sales agent, in which case, CI
shall pay to SC, no later than 30 days after the date of such license and sale a
commission in accordance with the Commission Schedule. Prices at which SC may
consummate the license and sale on CI's behalf shall be CI's then published
retail prices; provided that SC may elect to discount up to the amount of its
commission and in such event, CI shall be entitled to deduct the discount from
the commission owed to SC.
6.2 Customer Lists. Within thirty (30) days of the Effective Date, CI shall
provide to SC the CI Customer List. CI shall provide SC with quarterly updates
to the CI Customer List, throughout the Term. SC shall treat the CI Customer
List as Confidential Information, but is specifically permitted to use the list
to sell SC Products.
6.3 Publicity. The parties will agree upon and issue a joint press release
about the parties' relationship under this agreement and the Joint Product in
accordance with the Implementation Schedule. After implementation of the Basic
System by SC, SC will serve as a customer reference for CI.
6.4 Meetings. The parties will hold quarterly meetings on dates and locations
to be mutually agreed upon by the parties to review the status of the matters
contemplated by this Agreement.
6.5 Promotional Efforts. SC and CI shall each use commercially reasonable
efforts to promote the Joint Product and the Systems after each is accepted by
SC.
6.7 SC Product Sales. The parties agree that CI is not a sales agent for SC
and that to the extent that distribution and use of the Systems results in any
sales of SC Products, CI shall not be entitled to compensation of any kind in
respect of such sales.
6.8 Promotion, Merchandising and Advertising. All packaging, merchandising,
advertising and promotional materials relating to the Joint Product (the
Promotional Materials) prepared by or on behalf of either party will be subject
to the express prior written approval of the other party. In the event that the
reviewing party fails to provide written approval of any Promotional Materials
to the originating party within ten (10) business days after receipt of the
Promotional Materials by the reviewing party, such Promotional Materials will be
deemed approved by the reviewing party.
6.9 System Support; Customer Complaints. CI will be solely responsible for
supporting the Joint Product and the Systems and responding to all consumer
complaints and inquiries concerning the Joint Product and the Systems in a
timely and appropriate manner; provided that to the extent that any such
complaint or inquiry relates to any SC Xxxx or SC Product, CI's response will be
coordinated with, and subject to the prior
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approval of, SC. CI will provide SC with reasonably detailed written periodic
reports with respect to all such complaints and inquiries (including, but not
limited to, number, timing, nature and status) in a manner and on a schedule to
be mutually agreed upon by CI and SC.
7. Confidentiality.
7.1 Definition. Confidential Information means all information that (i) is or
has been disclosed to either party (the Receiving Party) or its representatives
by the other party (the Disclosing Party); and (ii) relates to the Disclosing
Party's past, present or future business activities.
7.2 Disclosure, Use & Rights. Each of CI and SC has disclosed and may continue
to disclose certain Confidential Information to the other solely for use in
connection with the transactions contemplated hereby. Each of the parties
represents and warrants that it is authorized to disclose any and all
Confidential Information made available to the other party pursuant to this
Agreement. Confidential Information of each party will be used by the other
party solely for the purposes permitted by this Agreement, including (in the
case of SC) the use of the System in accordance with the provisions of the
Agreement and (in the case of CI) the performance of its obligations under this
Agreement. Each party acknowledges that it will not obtain any rights of any
sort in or to the Confidential Information of the other party as a result of
such disclosure and that any such rights must be the subject of separate written
agreement(s).
7.3 Nondisclosure. All Confidential Information of a Disclosing Party will be
received and held in strict confidence by the Receiving Party. Each party will
restrict disclosure of the other party's Confidential Information to those of
its employees to whom it is necessary to disclose such Confidential Information
to perform its obligations under this Agreement. Each of the parties shall bear
the responsibility for any breach of confidentiality by its respective employees
and third party contractors. Each party shall use efforts fully commensurate
with those employed by it for the protection of its own Confidential Information
(and in any event, no less than commercially reasonable efforts), to protect the
Confidential Information of the other party.
7.4 Exclusions. Confidential Information shall not include the following: (i)
any information that the Receiving Party can show was in its possession prior to
the disclosure to it by the Disclosing Party; or (ii) any information that comes
into the possession of the Receiving Party, its agents or employees from a third
party who is under no obligation to the Disclosing Party to maintain the
confidentiality of such information; (iii) any information that becomes
generally known other than through any act of the Receiving Party, or its
employees or agents; and (iv) any information that was developed by employees or
agents of the Receiving Party independently of and without reference to any
Confidential Information of the Disclosing Party. The Receiving Party bears the
burden of proving these exceptions. If a portion or aspect or Confidential
information meets any of the foregoing exceptions, only that portion or aspect
shall not be governed by the confidentiality obligations herein and all other
portions and aspects of such Confidential Information shall remain subject to
these confidentiality provisions.
7.5 Required Disclosures. In the event the Receiving Party receives a
subpoena, or other validly-issued administrative or judicial process, requesting
that Confidential Information of the Disclosing Party be disclosed, it will
promptly notify the Disclosing Party of such receipt. The Receiving Party
receiving such request will thereafter be entitled to comply with such subpoena
or other process, only to the extent required by law.
7.6 Return of Confidential Information. Either Disclosing Party may at any
time notify the Receiving Party that the Receiving Party must return the
Disclosing Party's Confidential Information. Each party hereby
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agrees to, within ten (10) days of such notification: (i) return all documents
and tangible items it or its employees or agents have received or created
pursuant to the Agreement pertaining, referring or relating to the other party's
Confidential Information; and (ii) return or certify (in a writing attested to
by a duly authorized officer of such party) destruction of all copies,
summaries, modifications or adaptations that such party or its employees or
agents have made from the materials provided by the Disclosing Party.
7.7 Breach. If either party learns of any breach of this Section 7, it shall
promptly notify the other party. Breach or threatened breach of this Section 7
could cause irreparable harm to the affected party and such party shall be
entitled, without first exhausting other remedies or procedures, to equitable
relief, including injunctive relief, in addition to all of its other rights and
remedies at law or in equity that may be available to it.
8. Marks. Use by either party hereunder (Licensee) of the other party's
(Licensor's) marks (the SC Marks or the CI Marks, as applicable, the Licensor
Marks), is subject to the following requirements:
8.1 Use. Licensee shall not use Licensor Marks without Licensor's express
prior written consent to each such use. Licensee will not use any of the
Licensor Marks in any way which would cause any person reasonably to infer, or
would otherwise convey the impression, that Licensee is in any way affiliated
with or otherwise acting on behalf of Licensor, except as expressly permitted
herein. If Licensor determines that Licensee is using or displaying the Licensor
Marks in a manner that is or may be detrimental to Licensor's interest, Licensor
may issue reasonable instructions to Licensee concerning the manner, if any, in
which Licensee may continue to use Licensor Marks. Licensee will promptly
comply with such instructions or cease the use or display in question, including
modifying the Joint Product or Systems, as required. Each Licensee acknowledges
that the provisions of this Section 8 do not convey to Licensee any right
(except as expressly provided herein), title or ownership interest in the
Licensor Marks. The license granted herein does not include the right to grant
sublicenses, except to the limited extent required to perform its obligations
hereunder.
8.2 Quality; Inspection. Licensee shall ensure that the quality of products
manufactured, licensed, sold or distributed under the Licensor Marks is no less
than the level of quality maintained for products currently offered by Licensor
under the Licensor Marks. In order to determine Licensee's compliance with this
Section 8.2, Licensor or its authorized representative may inspect and test, at
reasonable times and under reasonable circumstances, all use of the Licensor
Marks by Licensee and all underlying goods, including without limitation,
computer software and hardware. Each product produced or distributed hereunder
shall comply with all applicable laws and regulations and shall conform in all
respects to the sample approved by Licensor. In the event of any deterioration
or nonconformity in the quality of a product licensed or sold under any Licensor
Xxxx, (as determined by Licensor in good faith), Licensor may, in addition to
other available remedies, by notice to Licensee, require that such product be
immediately withdrawn from the market and Licensee shall promptly cause such
withdrawal.
8.3 Notification & Defense. Licensee will promptly notify Licensor upon
becoming aware of any improper use or infringement of the Licensor Marks and
will reasonably cooperate with Licensor (at Licensor's request and expense) in
the defense and protection of the Licensor Marks.
9. Representations & Warranties. Each party represents and warrants to the
other that: (a) it has the right, power and authority to enter into and perform
its obligations under this Agreement; (b) the individual executing this
Agreement is authorized to do so; (c) neither the execution nor the performance
of this Agreement will result in any breach of any of such party's other
contracts or obligations; (d) it owns or has sufficient rights and interests to
grant the rights granted by it herein; (e) neither the grant by such party nor
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the use by the other party of such rights infringe or misappropriate the
intellectual or proprietary rights of any third party; and (f) it is
sufficiently staffed and equipped to fulfill its obligations under this
Agreement.
10. Indemnification
10.1 Infringement Indemnification By CI. At its sole expense, CI shall defend,
indemnify and hold SC, its directors, officers, shareholders, employees,
affiliates, partners, agents, successors, assigns and customers harmless from
and against any claims (and any liabilities, judgments, penalties, losses,
costs, damages and expenses, including reasonable attorneys' fees, resulting
therefrom) that use by SC of the CI Marks and Confidential Information in
accordance with this Agreement or that anyone's use of the Joint Product or
Systems (other than the SC Marks or the Style Photographs) infringes or
misappropriates any copyright, trademark, industrial design, U.S. patent or
other intellectual property right, provided that CI is given prompt notice and
control of detailed information with regard to any such claim, suit or
proceeding.
10.2 Infringement Indemnification By SC. At its sole expense, SC shall defend,
indemnify and hold CI, its directors, officers, shareholders, employees,
affiliates, partners, agents, successors, assigns and customers harmless from
and against any claims (and any liabilities, judgments, penalties, losses,
costs, damages and expenses, including reasonable attorneys' fees, resulting
therefrom) that use by CI of the SC Marks and Confidential Information in
accordance with this Agreement or that anyone's use of the SC Marks or Style
Photographs within the scope of the license granted herein infringes or
misappropriates any copyright, trademark, industrial design, U.S. patent or
other intellectual property right, provided that SC is given prompt notice and
control of detailed information with regard to any such claim, suit or
proceeding.
10.3 Other Claims. Each party (the Indemnitor) will defend, indemnify and
hold harmless the other party, its directors, officers, shareholders, employees,
affiliates, partners, agents, successors, assigns and customers (the
Indemnitees) from and against any claim, suit, demand, loss, damage, expense
(including reasonable attorney's fees) or liability that may result from, arise
out of or relate to: (a) bodily injury or property damage in connection with
Indemnitor's performance under this Agreement or in the case of CI as
Indemnitor, the CI Software, the Joint Product or any System or, in the case of
SC as Indemnitor, the SC Products, in each case only to the extent finally
determined to not to have resulted from Indemnitee's negligence or willful
misconduct; (b) in the case of SC as Indemnitor, warranty or similar claims as
to SC Products; and (c) in the case of CI as Indemnitor, warranty or similar
claims as to CI Software, the Joint Product or the Systems.
10.4 Procedure. To receive the benefit of the foregoing indemnities, the party
seeking indemnification must promptly notify the other party in writing of a
claim or suit and provide reasonable cooperation (at the indemnifying party's
expense) and tender to the indemnifying party full authority to defend or settle
the claim or suit. Neither party has any obligation to indemnify the other
party in connection with any settlement made without the indemnifying party's
written consent. The indemnifying party may not settle such claim or suit
without the consent of the indemnified party, which consent shall not be
unreasonably withheld. The indemnified party has the right to participate at
its own expense in the claim or suit and in selecting counsel therefor.
11. Insurance. During the term of this Agreement, each party will obtain and
maintain, at its own expense with reputable carriers and in form reasonably
acceptable to the other party, product liability insurance (with vendors broad
form endorsement) with coverage at least as extensive as are customary under the
circumstances and limits of at least two million dollars ($2,000,000). Each
party will furnish to the other party, upon request, a certificate or other
evidence satisfactory to such other party of compliance with the provisions of
this Paragraph 11.
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12. Termination. This Agreement may be terminated by either party at any time
upon written notice thereof to the other party (a) if the other party commits a
material breach of this Agreement, which breach has continued uncured for at
least thirty (30) days after written notice of such breach from the terminating
party; or (b) if the other party makes any assignment for the benefit of
creditors or files a petition in bankruptcy, or is adjudged bankrupt, or becomes
insolvent, or is placed in the hands of a receiver, or if the equivalent of any
such proceedings or acts occurs, though known by another name or term; or (c) in
the event of a change of control of the other party or a sale of all, or
substantially all, of its stock or assets or in the event the other party
acquires a controlling interest in, or substantially all the assets of, any
third party (or division thereof), in each case only if the new controlling
party manufactures, markets or distributes one or more products which the
terminating party reasonable deems to compete with any product of the
terminating party or its affiliates. Termination of this Agreement will not
affect the duty of either party to perform obligations incurred hereunder prior
to such termination. The provisions of Sections 7, 8, 9, 10 and 14 shall
survive the termination or expiration of this Agreement.
13. Preemptive Rights. If CI offers to issue securities (CI Securities) of any
kind (including without limitation, debt or equity but excluding an increase in
a CI employee stock option plan) to any person or entity (an Offeree) at any
time from the Effective Date through the second anniversary of the Effective
Date, then on each such occasion, CI shall give SC ninety (90) days written
notice in advance of such issuance and copies of any offering memorandum or
prospectuses and SC may, at its sole option, purchase up to twenty-five percent
(25%) of the offered CI Securities upon the same terms and conditions offered to
such Offeree.
14. General
14.1 Relationship of Parties. This Agreement is not intended to, and should
not be deemed to, create any partnership, agency, joint venture or similar
relationship between SC and CI. Each party will act hereunder solely as an
independent contractor and neither party will have any power or authority to
directly or indirectly bind or act on behalf of the other party.
14.2 Assignment. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
This Agreement may not be assigned by either party except with the express prior
written consent of the other party.
14.3 Governing Law. This Agreement and all related business transactions will
be governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts without reference to principles of conflicts of
law.
14.4 Waivers. No consent to or waiver of any breach or default in the
performance of any obligations hereunder will be deemed or construed to be a
consent to or waiver of any other breach or default in the performance of any of
the same or other obligations hereunder. Failure on the part of either party to
complain of any act or failure to act of the other party or to declare the other
party in default, irrespective of the duration of such failure, will not
constitute a waiver of rights hereunder. No waiver hereunder will be effective
unless it is in writing and executed by the party waiving the breach or default
hereunder.
14.5 Severability. In the event any provision of this Agreement, in whole or
in part, is invalid, unenforceable or in conflict with the applicable laws or
regulations of any jurisdiction, such provision will be replaced, to the extent
possible, with a provision which accomplishes the original business purposes of
the provision in a valid and enforceable manner, and the remainder of this
Agreement will remain unaffected and in force provided, however, that if without
such invalid or unenforceable provision the fundamental
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mutual objectives of the parties cannot be achieved, either party may terminate
this Agreement without penalty by written notice to the other.
14.6 Force Majeure. In the event that acts of God, or contingencies beyond the
reasonable control of either party interfere with or prevent the fulfillment by
such party of its obligations hereunder, such obligations will be suspended
until such time as such contingency or contingencies have terminated. Each
party will promptly notify the other upon becoming aware that any such
contingency has occurred or is likely to occur and will use its reasonable best
efforts to minimize any resulting delay in or interference with the performance
of its obligations hereunder. If such delay or interference continues for more
than thirty (30) days, the other party may terminate this Agreement by written
notice thereof to the non performing party.
14.7 Entire Agreement; Amendment. This Agreement represents the full
understanding of the parties hereto and supersedes any prior or contemporaneous
oral or written agreements between the parties concerning the matters
contemplated herein. This Agreement may not be changed or modified except by
written agreement signed by a duly authorized representative of each party. In
the case of any conflict between the provisions of this Agreement and CI's
Standard License, the provisions of this Agreement shall govern.
14.8 Notices. All notices, requests and other communications under this
Agreement will be in writing and will be delivered by personal service or sent
by nationally recognized overnight courier service, written telecommunication or
registered or certified U.S. mail, postage prepaid, to the address of the
addressee given in the first paragraph hereto or such other address as the
addressee may request in writing from time to time in accordance with this
paragraph. All such communications will be deemed effective on the earlier of
(a) actual receipt or (b) if sent by courier service, on the date following the
date presented to the courier service or (c) if sent by written
telecommunication on the sending date (subject to the confirmation of receipt in
complete, legible form) or (c) if sent by U.S. mail, five (5) business days
after delivery to the U.S. Postal Service.
14.9 Remedies. All remedies available to either party in connection with this
Agreement are cumulative and may be exercised concurrently or separately. The
exercise of one remedy will not be deemed an election of such remedy to the
exclusion of other remedies.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by a duly authorized representative thereof as of the date first
written above.
SC CORPORATION CYBERIMAGING SYSTEMS, INC.
By: /s/ Xxxxxxx X. X'Xxxx By: /s/ Xxx X. Xxxxxx
--------------------- -----------------
Name: Xxxxxxx X. X'Xxxx Name: Xxx X. Xxxxxx
--------------------- -----------------
Title: President Title: President
--------------------- -----------------
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EXHIBIT A
CI's Standard License
1. LICENSE. In consideration of your payment of the license fee, Cyber Imaging
Systems, Inc. grants END USER (CITY, STATE) a nontransferable and nonexclusive
license to use the enclosed proprietary software program and any documentation
relating thereto (collectively referred to as the "Program") on a single
computer at a single location. If you wish to use the Program on more than one
computer at a time, you must obtain a new and separate Software License
Agreement from Cyber Imaging Systems, Inc. for each additional computer. You
assume all responsibility for the selection of the Program to achieve your
intended results and for the installation use, and results obtained from the
program.
2. PROGRAM OWNERSHIP. You own the physical media on which the Program is
originally or subsequently recorded or fixed. This Agreement does not transfer
title and ownership of the Program or any underlying rights, patents,
copyrights, trademarks and trade secrets.
3. RESTRICTIONS. The Program, including the accompanying documentation, is
copyrighted. Unauthorized copying of the Program, including a Program that has
been modified, merged, or included with other software program(s) is expressly
forbidden. You may not copy the documentation accompanying the Program. You
may make one copy of the program (excluding accompanying documentation) into any
machine readable or printed form solely for backup purposes in support of your
use of the Program on a single computer (certain portions of the Program,
however, may include mechanisms to limit or inhibit copying). You must
reproduce and include the Proprietary Notices (as defined below) on the backup
copy. You must maintain accurate record of the location of the backup copy at
all times. You may not electronically transfer the Program from one computer to
another over a network. You may not distribute copies of the Program to others.
You may modify the Program and/or merge it into another program for your use on
a single computer. Any portion of this Program merged into another program will
continue to be subject to the terms and condition of this Agreement. You may
not modify, adapt, translate, reverse engineer, decompile, or disassemble, or in
any manner decode the Program in order to derive source code. You may not use
or distribute any portion of the Program over the Internet. You agree to never
remove any patent, copyright, trademark, or other proprietary notices
(collectively referred to as the "Proprietary Notices") or product
identification affixed to the Program.
Any attempted sublicense assignment, rental, sale, or other transfer of the
Program or any right thereto shall be null and void. You may not use, copy, or
modify the Program, or any copy, modification, or merged portion, in whole or in
part, except as expressly provided in this agreement.
4. TERM. The license granted under this Agreement is effective until
terminated. You may terminate it at any other time by destroying the Program
together with all copies, modifications, and merged portions in any form. It
will also terminate if you fail to comply with any term or condition of this
Agreement; you agree upon such termination to destroy the Program together with
all copies, modifications, and merged portions in any form, and to certify to
Cyber Imaging Systems, Inc. that they have been destroyed. Upon termination
there will be no refund of any monies or other consideration paid by you.
5. LIMITED WARRANTY. The Program is provided "as is" without warranty of any
kind, either expressed or implied, including, but not limited to the implied
warranties of merchantability and fitness for a particular purpose. The entire
risk as to the usability and performance of the Program is with you. Should the
Program prove defective, you (and not Cyber Imaging Systems, Inc. or an
authorized representative) assume the entire
27
cost of necessary servicing, repair or correction.
Cyber Imaging Systems, Inc. does not warrant that the functions contained in the
Program will meet your requirements or that the operation of the Program will be
uninterrupted or error free. However, Cyber Imaging Systems, Inc. warrants the
media on which the Program is furnished to be free from defects in materials and
workmanship under normal use for a period of one (1) year from the date of
delivery.
6. LIMITATIONS OF REMEDIES. Cyber Imaging Systems, Inc.'s entire liability and
your exclusive remedy shall be (i) the replacement of any media not meeting
Cyber Imaging Systems, Inc.'s "Limited Warranty" and which is returned postage
prepaid to Cyber Imaging Systems, Inc. or an authorized representative with
proof of payment, or (ii) if Cyber Imaging Systems, Inc. is unable to deliver
replacement media which is free from defects in materials or workmanship, you
may terminate this Agreement by returning the Program and your money will be
refunded.
In no event will Cyber Imaging Systems, Inc. be liable to you for any damages,
including any lost profits, lost savings, or other incidental or consequential
damage arising out of the use or inability to use such Program (whether based on
any action or claim in contract, tort, or otherwise) even if Cyber Imaging
Systems, Inc. has been advised of the possibility of such damages, or for any
claim by any other party.
7. GENERAL. Cyber Imaging Systems, Inc. provides this Program and licenses its
use in the United States, Canada, United Kingdom, Italy, Israel, Russia.
This agreement will be governed by the laws of the State of North Carolina.
Should you have any questions concerning this agreement, please contact Cyber
Imaging Systems, Inc. 6040A-165, Xxxxxxx, XX 00000.
You acknowledge that you have read this agreement, understand it, and agree to
be bound by its terms and conditions. You further agree that it is the complete
and exclusive statement of the agreement between us which supersedes any
proposal or prior agreement, oral or written, and any other communications
between us relating to the subject matter of this agreement.
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EXHIBIT B
CI's Standard Sales Terms
Component Price Summary
CyberImaging Software $3,495
Hi-Resolution Camera 1,249
Quartz Lighting 175
Digital Video Card 699
Blue Matte Backdrop 191
Pentium Computer 1,467
15" Color Monitor w/Speakers 478
Cabinet w/Light & Camera Mounts 355
Sony Digital Color Printer 575
On-Site Installation 265
Power Protection Manager 46
Total Turn-Key Investment $8,995
Pentium Computer:
000 XXx 00 XX Ram 2.1 GB Hard Drive
Diamond Stealth 3D Video Card
20X CD-Rom Drive, 1.44 floppy drive
US Robotics 33.6 internal modem
Keyboard mouse, Windows 95
1-yr on site warranty, next business day service
Add-ons and Upgrades:
Custom Cabinets and Laminates, on request
VCR (4-head RCA), add $339
Upgrade to Pentium 166 w/MMX, add $195
Upgrade to Pentium 200 w/MMX, add $298
Upgrade to Pentium 233 w/MMX, add $398
Upgrade to 57.6 internal modem, add $149
Upgrade to 3.1 GB hard drive, add $1455
Upgrade to 4.1 GB hard drive, add $2255
Viewsonic 17" Monitor w/Speakers, add $295
Touchscreen 15" Monitor, add $300
Other:
1-day 'Fast Start' Marketing Program $500
'Try Our Styles On for Size' Posters $2.50
'Preview the New You' Mirror Decals $1.50
Visa and MasterCard accepted, cash welcomed
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EXHIBIT C
Commission Schedule
ANNUAL
SOFTWARE % COMMISSION ON
LICENSES HARDWARE/SOFTWARE APPROX. $ PER SALE
-------- ----------------- ------------------
1-10 6% $ 540
11-50 10% $ 899
51-100 15% $1,349
100-150 20% $1,799
151+ 25% $2,249
The per annum count for the first year shall begin on the date of the first
System Sale by SC as sales agent for CI and shall begin anew on each
anniversary thereof.
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EXHIBIT D
Implementation Schedule
SYSTEM DELIVERABLE IMPLEMENTATION DATE
------ ----------- -------------------
Salon/Basic First photoshoot of SC Products June 15, 1998
Installation of first Basic System at SC June 15, 1998
Subsequent photoshoot of SC Products On or before July 15,
First release of Salon System including 40
SC styles July 15, 1998
Upgrade of Salon System with balance of
SC styles September 15, 1998
Portable Portable System September 30, 1998
Kiosk Cabinet design and payment September 30, 1998
Kiosk System 1st quarter of 1999
Internet Internet System 2nd quarter of 1999
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EXHIBIT E
SC Product
Wigs
Hairpieces
Wig accessories including but not limited to shampoos, conditioners, wig liners
and brushes
Wig hair care peripheral products
Hats
Turbans
Women's fashion accessories including but not limited to shoes, handbags,
jewelry, scarves and women's apparel.
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