EXHIBIT 14.13
STORED VALUE CARD
DISTRIBUTION AGREEMENT
THIS AGREEMENT is entered into this 22 day of October, 2004, by and
between Xxxxxx Beaumont, Inc. ("MBI"), 0000 Xxxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxx 00000, and Urban Networks Inc. ("Distributor"), 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
ARTICLE 1
DISTRIBUTORS
1.1 "Consumer" means the end use purchaser of a Product Unit.
1.2 "Product": MBI Branded Visa/Master Card Hologram Stored Value Card
1.3 "Product Application" shall mean a paper application form to be
filled out and mailed by the Consumer to MBI.
1.4 "Product Unit": 1 signature based Product.
1.5 "Stored Value Card System": A tool allowing retail locations to
sell, activate and perform Patriot Act compliance for issuers of the Product and
to Load value on the Product.
1.6 "Manufacturer's Suggested Retail Price" ("MSRP"): The price of the
Product Units in United States Dollars, as set forth herein.
1.7 "Distributor's Network": Distributor's publications and other media
outlets by which Distributor will promote the Product and through which
Distributor will distribute Product Applications to Consumers.
1.8 "MBI Distribution Network": MBI has developed a network of
distributors of MBI products, each of whom is bound by a Distribution Agreement
to provide MBI products to networks of retailers controlled by the distributors.
ARTICLE 2
GRANT OF DISTRIBUTORSHIP
2.1 MBI hereby grants Distributor and Distributor accepts for a term of
one year from the date hereof ("Term"), right to distribute Products in the
United States of America, subject to the terms and conditions of this Agreement.
2.2 Distributor shall use its best efforts to achieve maximum sales of
products and to establish an adequate Distribution Network, consistent with good
business ethics and in a manner that will reflect favorably on MBI and on the
goodwill and reputation of MBI.
ARTICLE 3
DISTRIBUTOR REQUIREMENTS
3.1 Distributor shall place sufficient advertisement of the Product in
its Distribution Network, to the extent approved by MBI, and shall make
available Product Application to Consumers learning of
the Product through Distributor's Network. Distributor shall use various
marketing methods to drive Consumers to submit Product Applications.
3.2 Provide reasonable assistance to NMI in the implementation of the
necessary products and services to support the Product.
3.3 Provide advertising materials to the Distributor's Network
promoting the Product.
3.4 Establish specifications for a launch plan for distribution of the
Product Application and inform MBI of the identity of Distributor's team leader
responsible for the launch of the distribution plan.
3.5 Distributor agrees that neither Distributor nor Distributor's
Network will telemarket the product
3.6 Urban Networks will provide a strip ad in the Urban Network
Magazine promoting the MBI stored value Visa/Master card that will run for a
minimum of 4 months beginning with the November 2004 issue.
3.7 Promotion of the MBI stored value Visa/Master card on the Urban
Networks web site xxx.xxxxxxxxxxxxxx.xxx
3.8 Inclusion in the Urban Networks bi monthly newsletter for a total
of 5 million emails over the course of the promotion.
3.9 Urban Networks will do a announcement of our promotional venture in
the Urban Networks magazine (October issue)
ARTICLE 4
MBI REQUIREMENTS
4.1 Deliver Product Units to Consumers upon receipt of a completed
Product Application which has been approved by the issuing bank and upon payment
as provided herein.
4.2 Upon receipt of payment from a Consumer, remit to Distributor a sum
equal to the amount received from the Consumer.
4.3 Provide basic telephone support and customer service to end-users
of the Product. Distributor may request that MBI provide additional technical
support to its Distribution Network, with pricing of such additional support to
be determined by MBI based upon the specific nature and time intensity of the
support requested.
4.4 Create a network of retailers utilizing the Stored Value Card
System so that Consumers can load cash onto the Product.
4.5 MBI will pay Urban Networks an advance payment of 52000.00 draw
against the $12.00 Urban Networks commission.
ARTICLE 5
ORDERS AND PRICING:
5.1 The Manufacturer's Suggested Retail Price (MSRP) shall be $29.95.
5.2 The Price per Product Unit is:
2
(a) 1 Card Product Unit: $xx.xx, including delivery to the
Consumer.
(b) MBI will collect the $xx.xx from the end user and process
the application. Upon completion MBI will deduct $xx.xx and forward the balance
($xx.xx) to Urban as outlined in Article 6,
(c) MBI will withhold commission from the sale of the first
167 cards to recover the cost of the advance payment an amount not to exceed
$2000.00,
5.3 MBI will use its best efforts to fill Product orders as quickly as
possible following receipt by MBI of the written order (fax or e-mail shall
constitute a written order).
5.4 Each amount payable to MBI hereunder shall be paid in full, with no
deductions or offsets, and remitted in United States Dollars by check, money
order or deposit in such account at such financial institution as MBI shall from
time to time designate. Delinquent payments shall bear interest at the rate of
1.5% per month of the delinquent amount until paid, or the maximum interest rate
permitted by law, whichever is less.
5.5 In the event that any Product is superseded by a new version of the
Product, MBI shall give Distributor notice of such new version. Distributor may
obtain the new version of said Product on a Product Unit per Product Unit basis
by returning unsold Product Units of the superseded Product within thirty (30)
days of such notice from M13I. Upon return of unsold units, together with an
order for the new version of said superseded Product, MBI shall ship the
requested number of Product Units, subject to the provisions of this Article,
and provided that Distributor shall bear the costs of shipping and handling,
together with any difference between the Price for the superseded Product Unit
and the Product Unit Price for the new version of the Product.
ARTICLE 6
COMMISSIONS:
6.1 MBI shall pay the following commissions to Distributor:
(a) $xx.xx from the sales of each MBI branded Visa/Master
hologram card
6.2 All Commissions shall be paid within 45 days following the end of
the month in which such commissions were earned. MBI shall provide Distributor
with a monthly reconciliation of commissions earned and paid, or more
frequently, if reasonably requested by Distributor.
6.3 Distributor shall be responsible for any commissions or other
payments to Distributor's Network and MBI shall have no responsibility for such
payments. Distributor shall indemnify and hold harmless MBI against any claim,
cause of action, liability or judgment, including attorney's fees, arising from
any number of Distributor's Network for non-payment of any commission or fee due
to the retailer from sales or service of the Product.
ARTICLE 7
INTELLECTUAL PROPERTY RIGHTS
7.1 MBI represents to Distributor that it owns or has a license to all
of the material contained in the Products and that, to the best of MBI's
knowledge, said Products do not infringe upon any copyright, patent, xxxx work,
trademark or other proprietary right of any third party and that MBI has full
authority to enter into this Agreement. Distributor represents that Distributor
has the unencumbered right
3
to utilize the images, trademarks and artwork printed on the Product (the
"Image") and to affix the Image to the Product, and to sublicense the Image for
the purposes set forth herein.
7.2 Distributor hereby grants MBI a limited sublicense to apply the
Image to the Product solely for sale by Distributor through Distributor's
Network as set forth herein.
7.3 Distributor shall have no rights to duplicate, translate,
decompile, reverse engineer, or adapt Products without MBI's prior written
consent.
7.4 Distributor shall promptly notify MBI of any unauthorized third
party duplication, distribution, or use of Products which comes to the attention
of Distributor and shall provide MBI with whatever reasonable assistance is
necessary to stop such activities.
7.5 Distributor shall not attempt to register any of MBI's trademarks,
company names, or trade names without MBI's written permission, nor shall
Distributor attempt to develop any products which contain the "look and feel" of
any Products, or of the Stored Value Card System.
7.6 Distributor shall indemnify and hold harmless MBI against any and
all claim, judgment, lien, penalty, loss, damage or other cost, including MBI's
reasonable attorney's fees in defending such action, related to or arising from
any claim or controversy regarding Distributor or MBI's right to utilize the
Image on the Product.
4
ARTICLE 8
CONFIDENTIALITY
8.1 Distributor, on behalf of itself and its employees, shall take all
reasonable steps to safeguard the Products distributed by it from any
unauthorized use, duplication, sublicensing, or distribution.
8.2 Distributor shall further, on behalf of itself and its employees,
retain all Confidential Information furnished by MBI in strictest confidence and
shall not publish or disclose such Confidential Information at any time during
the term of this Agreement or after its termination.
ARTICLE 9
LIMITED WARRANTIES
9.1 MBI does not warrant that the functions contained in Products will
meet the requirements of any Consumer or that Products are error-free. However,
NMI does warrant that Products will operate substantially in accordance with the
user documentation. NMI shall further make reasonable efforts to correct any
significant reproducible error in Products or in the Stored Value Card System
for which NMI receives written notice promptly after such error comes to the
attention of Distributor, provided such error relates to the proper functioning
of Products and has not been caused by negligence on the part of Distributor or
any third party, hardware malfunction, or other causes external to the Products
or the Stored Value Card System.
9.2 MBI warrants that Products are free from defects in materials and
workmanship under normal use for a period of ninety (90) days from the date of
delivery by Distributor to the retailer. MBI's entire liability and
Distributor's sole and exclusive remedy, as well as that of any retailer and
Consumer, shall be replacement without charge of any Product Unit which proves
defective within the ninety (90) day period.
9.3 The warranties set forth in paragraphs 9.1 and 9.2 of this Article
9 shall also apply to any new versions of Products which Distributor distributes
in accordance with the terms and conditions of this Agreement.
9.4 THE WARRANTIES CONTAINED IN PARAGRAPHS 9.1, 9.2 AND 9.3 OF THIS
ARTICLE 9 ARE IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THOSE OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. IN NO EVENT SHALL NMI BE LIABLE FOR DAMAGES, DIRECT OR
INDIRECT, INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY DISTRIBUTOR,
ANY RETAILER, CONSUMER OR OTHER THIRD PARTY ARISING FROM BREACH OF WARRANTY OR
BREACH OF CONTRACT, NEGLIGENCE OR ANY OTHER LEGAL GROUND OF ACTION.
9.5 Distributor shall indemnify and hold MBI harmless from and against
any claims, expenses, losses or damages arising out of or in connection with
Distributor's distribution of Products.
ARTICLE 10
MBI DISTRIBUTOR NETWORK EXCLUSIVITY
10.1 MBI may introduce Distributor to members of the MBI Distributor
Network to enable Distributor to sell Product directly to other MBI
distributors.
5
10.2 In the event NMI introduces Distributor to members of the NMI
Distributor Network, Distributor agrees it will not sell, attempt to sell,
distribute or otherwise market any stored value card, including, but not limited
to, debit cards, credit cards, ATM cards or telephone cards, to or through any
member of the MBI Distributor Network or directly to or through any retailer for
whom any MBI Distributor Network member serves as a distributor of stored value
cards, except as provided herein or with the express written consent of MBI.
10.3 In addition to monetary damages or any other damages available at
law, MBI shall be entitled to seek equitable relief, including injunction, to
enforce the provisions of this article. In the event of such equitable
enforcement, Distributor hereby waives any requirement that MBI post any bond or
other collateral which would otherwise be required by any court in equity to
permit entrance of equitable relief.
10.4 In any attempt to enforce the terms of this Article, the
prevailing party shall be entitled to, and the losing party shall pay, the
prevailing party's reasonable attorney's fees and costs.
10.5 The provisions of this article shall survive the termination of
this Agreement for a period of 5 years.
ARTICLE 11
COMPLIANCE WITH LAWS
11.1 Distributor shall assure compliance with all applicable federal
and state laws and regulations governing its operations.
ARTICLE 12
RENEWAL OF AGREEMENT AND TERMINATION
12.1 This Agreement shall be automatically renewed for one (1) year
periods after the end of each one year term, unless either party gives written
notice of non-renewal to the other at least 30 days prior to the end of their
current term.
12.2 This Agreement shall be subject to termination at any time upon
thirty (30) days written notice by either party hereto.
12.3 This Agreement shall be subject to immediate termination for good
cause, at the election of MBI, by written notice to Distributor at any time in
the event of any one or more of the following:
(a) Any illegal, unfair or deceptive business practices or
unethical conduct whatsoever by Distributor, whether or not related to Products;
(b) A receiver, liquidator, trustee or like official is
appointed for Distributor or any substantial portion of its property or if
Distributor shall have filed or consented to any petition in bankruptcy or other
insolvency proceedings or shall have made any assignment for the benefit of
creditors;
(c) The nonpayment, within fifteen (15) days past the due
date, of any financial obligation due from Distributor pursuant to Article 5
hereof; or
(d) Any default by Distributor in the due observance or
performance of any term or condition of this Agreement, other than that as
specified in subparagraph (b), and such default shall have
6
continued for a period of thirty (30) days after written notice specifying the
same shall have been given by MBI to Distributor.
12.4 Termination shall not extinguish any of Distributor's obligations
under this Agreement which by their terms continue after the date of
termination, including, but not limited to, the confidentiality obligations
under Article 8 above.
12.5 Termination shall not entitle Distributor to any compensation by
NMI on any grounds whatsoever, including, but not limited to, lost profits, loss
of goodwill, and consequential, direct, indirect, punitive or exemplary damages.
12.6 For a period of six (6) months after termination, Distributor
shall have the right to sell off existing stock of Product for which full
payment has been made.
ARTICLE 13
MISCELLANEOUS
13.1 SEVERABILITY. If any provision or portion of this Agreement shall
become invalid or unenforceable for any reason, there shall be deemed to be made
such minor changes in such provision or portion as are necessary to make it
valid or enforceable. The invalidity or unenforceability of any provision or
portion hereof shall not affect the validity or enforceability of the other
provisions or portions hereof.
13.2 ENTIRE AGREEMENT. This Agreement, together with the attached
schedules, contains the entire agreement between the parties with respect to the
subject matter contained herein and supersedes any and all prior understandings
or agreements between the parties, whether oral or in writing. Any warranty,
representation, promise, or condition not incorporated herein shall not be
binding upon either party. No modification, renewal, extension, or waiver of
this Agreement or any of its provisions shall be binding unless made in writing
and signed by the parties hereto.
13.3 INDEPENDENCE OF PARTIES. Nothing in this Agreement shall be
construed as creating a partnership or joint venture between the parties or
making Distributor an agent or employee of MBI. In all of its operations
hereunder, Distributor shall be an independent contractor, shall conduct its
business at its own cost and expense, and shall have no authority to make any
representation or warranty on behalf of MBI.
13.4 GOVERNING LAW. This Agreement has been negotiated and prepared
and will be performed in the United States, and the validity, construction and
enforcement of, and the remedies under, this Agreement shall be governed in
accordance with the laws of the United States and the state of Florida (except
any choice of law provisions of United States and Florida law shall not apply if
the law of a state or jurisdiction other than Florida would apply thereby),
except as to copyright and trademark matters which shall be governed by the laws
of the United States and any applicable international conventions.
13.5 VENUE. Venue of any action brought to interpret or enforce this
agreement shall lie exclusively in the County of Sarasota, Florida, if the
action is brought in the courts of the State of Florida; and if brought in the
courts of the United States of America, in the Middle District of Florida, Tampa
Division.
13.6 WAIVER. Failure or delay on the part of MBI or Distributor to
exercise any right, power or privilege hereunder shall not operate as a waiver
thereof, now shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof.
7
13.7 NOTICES. All notices, requests, demands, or other communications
which are required or may be given under this Agreement shall be in writing in
the English language and shall be deemed to have been duly delivered if sent by
first class registered or certified airmail, or by telex, facsimile or other
electronic transmission (confirmed by first class registered or certified mail)
and properly addressed to the appropriate party at the address set forth above,
until changed by notice in writing by either party hereto to the other party. If
sent by airmail, notice shall be effective fourteen (14) days from the date of
deposit with the post office. If sent by electronic transmission, notice shall
be effective one day after transmission.
13.8 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assigned by any
party hereto without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder.
13.9 ATTORNEY'S FEES. In any arbitration or litigation brought under
this Agreement or relating to any alleged breach of this Agreement, the
prevailing party shall be entitled to recover, in addition to all damages
suffered, its reasonable attorney's fees and costs.
(The remainder of this page intentionally left blank.)
8
IN WITNESS WHEREOF, MBI and Distributor each has caused this Agreement
to be executed on its behalf by its duly authorized officer.
XXXXXX BEAUMONT, INC.
BY: /S/
--------------------------------
AS ITS: VICE PRESIDENT
----------------------------
DATE: 10-22-04
------------------------------
URBAN NETWORKS, INC.
BY: /S/ XXXXXX XXXXXXX
--------------------------------
AS ITS: DIR. OF BUSINESS DEV.
----------------------------
DATE: 10-22-04
------------------------------
9
IN WITNESS WHEREOF, MBI and Distributor each has caused this Agreement
to be executed on its behalf by its duly authorized officer.
XXXXXX BEAUMONT, INC.
BY: /S/
--------------------------------
AS ITS: VICE PRESIDENT
----------------------------
DATE: 10-22-04
------------------------------
URBAN NETWORKS, INC.
BY: /S/
--------------------------------
AS ITS: PUBLISHER/CEO
----------------------------
DATE: 10-22-04
------------------------------
10
