1
EXHIBIT 10.5
DEVELOPMENT AND MARKETING AGREEMENT
THIS DEVELOPMENT AND MARKETING AGREEMENT (this "Agreement") is
effective as of this 30th day of October, 1998, between iMall, Inc., a Nevada
corporation ("Company"), and First Data Merchant Services Corporation, a Florida
corporation ("FDMS").
RECITALS
WHEREAS, the Company and FDMS are parties to a certain
Investment Agreement dated as of the 30th day of October, 1998 (the "Investment
Agreement") pursuant to which FDMS acquired Common Stock (as defined therein)
and has the right to acquire additional Common Stock and a Warrant (as defined
therein); and
WHEREAS, in connection with the Investment Agreement, the
parties agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the definitions indicated below, and shall be equally applicable to the
singular and plural forms. Any agreement referred to herein shall mean such
agreement as amended, supplemented and modified from time to time to the extent
permitted by the applicable provisions thereof. When a reference is made in this
Agreement to an article, section or exhibit, such reference shall be to an
article, section or exhibit of this Agreement unless otherwise indicated. The
table of contents, if any, and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes," or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
1.1 "Affiliate" shall mean any Person which, directly or indirectly,
owns or controls, is owned or is controlled by or is under common ownership or
control with another Person, and in the case of FDMS, shall also include
Alliances. As used herein, "control" means the power to direct the management
affairs of a Person, and "ownership" means the beneficial ownership of the
voting equity securities or other equivalent voting interests of the Person.
Notwithstanding the foregoing, each of the Company and FDMS shall not be deemed
to be Affiliates.
1.2 "Alliance" means any venture (in any form, including in corporate,
partnership or limited liability company form) or contractual alliance now or
hereafter entered into between FDMS (or any of its Affiliates) and one or more
third parties for the provision of any Merchant Acquiring Business services
pursuant to an arrangement whereby Investor (or any of its Affiliates) shares
the
2
economic benefits of ownership of merchant contracts through profit sharing,
revenue sharing, a royalty interest or otherwise.
1.3 "Animalhouse Site" means the World Wide Web site accessed by using
web browser software directed to the following underlined URL:
xxxx://xxxx.xxxxxxxxxxx.xxx or any other URL used by the Company to replace or
add to the foregoing.
1.4 "Arbitration Panel" shall have the meaning set forth in Section 2.1
of Exhibit 13.10.
1.5 "Brochure Site" means a non-commerce enabled single or multi-page
website.
1.6 "Card Association" means MasterCard International, Inc., VISA
U.S.A., Inc., VISA International, Inc., American Express, Discover, and other
Transaction Card associations and their respective successors and assigns.
1.7 "Cash Register Service" means the ability of a merchant to receive
payment services only (i.e., no shopping cart or catalog features).
1.8 "Change Order" shall have the meaning set forth in Section 2.10
1.9 "Company" shall have the meaning set forth in the first paragraph
hereof.
1.10 "Company Marks" means iStore, Bolt-on e-commerce, stuff related
marks, and iMall.
1.11 "Company Software" means all proprietary software, technical and
user documentation, tools, utilities and related materials used by the Company
in connection with its performance of Development and Operational Services and
Marketing Services, together with all updates, modification and enhancements
thereto.
1.12 "Confidential Information" shall have the meaning set forth in
Section 11.1.
1.13 "Development and Operational Services" shall have the meaning set
forth in Section 2.1.
1.14 "Dispute" means any and all disputes, controversies and claims
between the parties arising from or in connection with this Agreement or the
relationship of the parties under this Agreement, whether based on contract,
tort, common law, equity, statute, regulation, order or otherwise.
1.15 "Effective Date" means the date first written above.
1.16 "Electronic Commerce Tools" means the Company-owned proprietary
software, technical and user documentation, tools, utilities and related
materials commonly known as
-2-
3
"electronic commerce tools," which includes x.Xxxxx,
bolt-on e-commerce and bolt-on e-commerce with on-line payment processing,
together with all updates, modification and enhancements thereto.
1.17 "Escrow Agreement" means that certain Source Code Escrow Agreement
dated as of October 31, 1998, between the Company, FDMS, and Data Securities
International, Inc.
1.18 "Event of Default" shall have the meaning set forth in Section
12.3.
1.19 "FDMS" shall have the meaning set forth in the first paragraph
hereof.
1.20 "FDMS Marks" means First Data Merchant Services, First Data
Merchant Services (stylized) and Moneta.
1.21 "FDMS Merchants" means: (i) those Persons with which FDMS or any
of its Affiliates presently or may in the future have a relationship relating to
the Merchant Acquiring Business; or (ii) those Persons that are solicited by
FDMS or its Alliances or other Affiliates to participate in the Mall Site or to
buy e-commerce services; or (iii) those Persons which FDMS or any of its
Affiliates solicits to purchase a Merchant Site, Brochure Site, or Electronic
Commerce Tools.
1.22 "FDMS Merchant Sites" means those Merchant Sites of FDMS Merchants
contained in the Mall Site.
1.23 "FDMS Software" means the proprietary software commonly known as
"merchant online application software" or "Online Emerald," and "Moneta,"
together with all updates, modifications and enhancements thereto, and all
technical and user documentation and related materials (if any).
1.24 "Gateway" means all hardware, software and telecommunications
tools necessary to perform protocol conversion between different networks or
applications.
1.25 "Imall Site" means the World Wide Web site accessed using web
browser software directed to the following underlined URL: xxxx://xxx.xxxxx.xxx
or any other URL used by the Company to replace or add to the foregoing.
1.26 "Indemnified Persons" shall have the meaning set forth in Section
9.1, 9.2.
1.27 "Initial Term" shall have the meaning set forth in Section 12.1.
1.28 "Investment Agreement" shall have the meaning set forth in the
first paragraph of the recitals of this Agreement.
-3-
4
1.29 "Linking Image" means the words and/or graphical symbols resident
on the Stuff Site that, when selected by a user, will cause the user to access
the Mall Site or any Brochure Site or Merchant Site.
1.30 "Losses" shall have the meaning set forth in Section 9.1.
1.31 "Mall" means an Internet-based virtual shopping mall that is
comprised of entities operating Brochure Sites or Merchant Sites.
1.32 "Mall Site" means the stand-alone website on the World Wide Web
portion of the Internet to be owned by FDMS through which Brochure Sites and
Merchant Sites are accessible. The Mall Site shall be accessible to Internet
users by using web browser software directed to one of the following underlined
URLs: xxxx://xxx.xxxxxxxxx.xxx, xxxx://xxx.xxxxxxxxxxx.xxx,
xxxx://xxx.xxxxxxxxxxx.xxx, or such other URL as FDMS may designate, or any
other URL used by the Company to replace or add to the foregoing that becomes
the Primary Shopping Website.
1.33 "Mall Tenant" means any Person (including, FDMS Merchants), that
has a Merchant Site or a Brochure Site in the Mall Site.
1.34 "Marketing Services" shall have the meaning set forth in Section
2.2.
1.35 "Merchant Acquiring Business" means a business providing any of
the following services or products to merchants with respect to Transaction
Cards: (i) the authorization and/or capture of transactions; (ii) the submission
of such transactions for interchange settlement or other settlement; (iii) the
preparation of statements or reports based on such transactions; chargebacks and
other exception items (including by electronic access); (iv) the provision of
customer service or other office services in respect of any of such
transactions; (v) clearing and settlement services; (vi) enhancements or
modifications to any of the foregoing services; and (vii) other services or
products developed in support of merchants to allow such merchants to remain
competitive in the Transaction Card industry.
1.36 "Merchant Site" means an e-commerce enabled website.
1.37 "Notice of Default" shall have the meaning set forth in Section
12.4.
1.38 "Person" means an individual, partnership, corporation, limited
liability company, trust, joint stock company, association, joint venture, or
any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
1.39 "Primary Shopping Website" means the Internet shopping portal or
website mall in which the Company and its Affiliates, taken as a whole, invest
the greatest percentage of promotional, marketing, advertising, research and
development time and expenditures, as compared to any other website owned,
operated or controlled by the Company or any of its Affiliates.
-4-
5
1.40 "Renewal Term" shall have the meaning set forth in Section 12.2.
1.41 "SPV" shall have the meaning set forth in Section 5.
1.42 "SPV Rights" shall have the meaning set forth in Section 5.
1.43 "Stuff Card" shall have the meaning set forth in Section 3.6.
1.44 "Stuff Search Engine" means the product search engine resident on
the Stuff Site, as described in Exhibit 2.1.
1.45 "Stuff Site" means the site on the World Wide Web portion of the
Internet, accessed by using web browser software directed to the following
underlined URL: xxxx://xxx.xxxxx.xxx or any other URL used by the Company to
replace or add to the foregoing.
1.46 "Term" shall mean the Initial Term and each and every Renewal Term
(if any).
1.47 "Transaction Card" means: (i) a card or other device or service
used for credit or debit transactions; (ii) a private label or retail debit or
credit card or other device or service used for similar services; (iii) a stored
value or other prepayment service card or other similar device or service used
for stored value or prepayment services; or (iv) an electronic coupon,
electronic benefit card, signature/security card, or similar device or service
used in connection with electronic financial transactions or other similar
services.
1.48 "URL" means Uniform Resource Locator.
1.49 "Wallet" means the ability to uniquely identify shoppers at a Mall
Site, and register a preferred Transaction Card number with such Mall Site.
2. RIGHTS AND OBLIGATIONS OF THE COMPANY.
2.1 Development and Operational Services. During the Term, the Company
shall perform the website development and operational services substantially as
set forth in Exhibit 2.1 (the "Development and Operational Services") in
accordance with the performance and design specifications, time frames, and
other obligations set forth in Exhibit 2.1 and elsewhere in this Agreement in
order to design, develop, implement, operate, maintain and update the Gateway,
Electronic Commerce Tools, Stuff Site, Mall Site, Brochure Sites, Merchant
Sites, and Linking Images resident thereon and such other deliverables and
services set forth on Exhibit 2.1.
2.2 Marketing Services. The Company shall perform the advertising and
promotion services substantially as set forth in Exhibit 2.2 (the "Marketing
Services") in accordance with the performance and design specifications and
other obligations set forth in Exhibit 2.2 and elsewhere in this Agreement.
-5-
6
2.3 Customer Service. The Company shall provide the customer support
services substantially as set forth in Exhibit 2.3.
2.4 Internet Gateway. The Company shall provide a Gateway at its cost
and expense from it to FDMS' authorization center exclusively for the use of
FDMS, its Affiliates and the Company. Notwithstanding the foregoing, FDMS or its
Affiliates, at their sole discretion, may use a different Gateway between the
Company and FDMS or its Affiliates, as applicable. The Company acknowledges and
agrees that FDMS and its Affiliates may, in their sole discretion, use the
Gateway for purposes other than the Stuff Site and Mall Site, provided that FDMS
pays to the Company the related Cash Register Service fees. The Company shall
not permit the removal of or otherwise remove a FDMS Merchant from the Gateway
without FDMS' approval, which approval FDMS may withhold in its sole discretion,
provided that such FDMS Merchant is paying applicable fees relating thereto.
2.5 Preferred Merchant Processor.
2.5.1 New Merchants. Within thirty (30) days after FDMS
provides the Company with operable FDMS Software, the Company shall
modify its electronic commerce system so that FDMS and such Affiliates
as FDMS elects shall be the merchant provider of Internet merchant
accounts unless a merchant specifically rejects FDMS, in which event
the system may default to a different provider.
2.5.2 Existing Electronic Commerce Merchants. Within sixty
(60) days after the Effective Date, and thereafter at FDMS' request
from time to time, to the extent not contractually prohibited from
doing so, the Company shall deliver an electronic mail message, at its
cost and expense, to each then-existing electronic commerce merchant
residing on the Imall Site, and such other Company or Affiliate owned
or operated websites as FDMS shall designate, that does not use FDMS or
an Affiliate of FDMS for services comprising the Merchant Acquiring
Business, inviting such merchant to have FDMS or an Affiliate of FDMS
provide services comprising the Merchant Acquiring Business. FDMS shall
provide the Company with suggested content for each such electronic
mail message. The Company shall approve each such electronic mail
message, which approval shall not be unreasonably withheld or delayed.
At FDMS' request from time to time, to the extent not contractually
prohibited from doing so, the Company shall deliver to FDMS a list,
which shall include the name, address, e-mail address, telephone number
and such other information as FDMS reasonably requests, of all
then-existing electronic commerce merchants residing on the Imall Site,
and such other Company or Affiliate owned or operated websites as FDMS
shall designate, that do not use FDMS or an Affiliate of FDMS for
services comprising the Merchant Acquiring Business.
-6-
7
2.5.3 Leads. Within three (3) business days after obtaining a
merchant account lead, the Company and its Affiliates shall provide
such lead exclusively to FDMS, regardless of the origin of such lead.
2.6 Merchant Transfer. Within thirty (30) days after receipt of a
request from FDMS, the Company shall (to the extent that the Company is not
prohibited contractually from doing so) cause those merchant sites accessible
from the Imall Site that are identified by FDMS to become Mall Tenants
concurrently accessible from the Mall Site, subject to merchant approval.
2.7 Product Search Preference. The Company shall design the Stuff
Search Engine to ensure that, regardless of the type or level of product search
query conducted, all FDMS Merchant Sites containing products that match the
search query shall be given the sole segregated preferential listing treatment
as set forth in Exhibit 2.7 or such other form and format as the parties may
agree.
2.8 Re-Branding of Electronic Commerce Tools. The Company shall, at its
sole cost and expense, promptly re-brand the Electronic Commerce Tools as
reasonably requested by FDMS. FDMS shall be permitted to use the same in
accordance with the license granted in Section 4.1.
2.9 Transfer of Internet Domain Names. Promptly after the Effective
Date or as soon as reasonably practicable, the Company shall cause all right,
title and interest in and to the Internet domain names set forth in Section 1.32
to be assigned to FDMS to the extent that the Company owns the same.
2.10 Change in Scope.
2.10.1 If during the Term, either party requests the other to
provide any additional services or deliverables, or modify existing
Development and Operational Services or Marketing Services or
deliverables, either party may make a request for such addition or
modification pursuant to a written change order ("Change Order"). Each
Change Order shall identify with reasonable specificity the addition or
modification, associated tasks, timetables, deliverables, fees and
charges. Within five (5) days after the receipt of a Change Order, the
parties shall discuss the same and the availability of personnel,
resources and fees and charges (if any), to implement the Change Order,
which implementation shall not be unreasonably denied by either party.
Each Change Order executed by the parties shall be incorporated into
and constitute an amendment to this Agreement. The terms of any Change
Order shall control over any inconsistent provisions set forth in this
Agreement with regard to the additional services or deliverables or
modification of existing Development and Operational Services or
Marketing Services.
2.10.2 If the Company is unable or unwilling to provide the
additional services or deliverables, FDMS may elect to do so at its
sole cost and expense, provided that doing so does not have a material
adverse effect on the infrastructure or operations of the Company. In
such case, the Company shall permit FDMS (or its consultants) access to
the Company's
-7-
8
facilities and materials (including, software and hardware) to complete
the additional services or deliverables contemplated by the Change
Order.
2.10.3 Notwithstanding the foregoing, if a Card Association,
governmental agency or other regulatory body requires changes to the
Development and Operational Services, the Company shall provide the
same pursuant to a Change Order at its sole cost and expense, provided
that the Company may pass through costs on a pro rata basis if such
changes materially increase the cost of providing services and such
pass through does not make the increased costs of services more than
similar services in the market place.
3. FDMS'S RIGHTS AND OBLIGATIONS.
3.1 FDMS Merchant Offers. Subject to Section 3.3, FDMS shall use
commercially reasonable efforts to offer Electronic Commerce Tools, Merchant
Sites and Brochure Sites to all domestic Alliances. FDMS shall name the Company
as a preferred e-commerce provider in such offers.
3.2 Customer Service. FDMS shall provide the customer support services
listed in Exhibit 2.3.
3.3 Tenancy Approval Right. As between the Company and FDMS, FDMS shall
have the exclusive right to include or exclude Mall Tenants and to determine all
terms and conditions of Mall tenancy. FDMS shall have the exclusive right to
approve or disapprove, in its sole discretion, all Mall Tenant applications
regardless of the origin of such application.
3.4 Development Approval Right. FDMS shall have the right to
participate in and provide input to direct the Development and Operational
Services and shall retain the final right of approval over all design,
development, content, features and revisions relating thereto, which approval
shall not be unreasonably withheld or delayed.
3.5 FDMS Solicitation of Existing Electronic Commerce Merchants. The
Company shall permit FDMS or an Affiliate of FDMS to contact (by telephone or
mail) the merchants set forth in the lists periodically created by the Company
pursuant to Section 2.5.2 for the purpose of inviting such merchants to have
FDMS or an Affiliate of FDMS provide services comprising the Merchant Acquiring
Business. FDMS shall provide the Company with copies of promotional materials to
be used in such solicitation for its review and approval, which approval shall
not be unreasonably withheld or delayed.
3.6 Stuff Card Development Right. FDMS shall have the exclusive right
to develop, broker, and process private label or co-branded Stuff Site-related,
Mall Site-related (or other Primary Shopping Website-related) Transaction Cards
(each a "Stuff Card"). FDMS shall use commercially reasonable efforts to
develop, market and broker Stuff Cards to potential issuers. Nothing herein
-8-
9
shall be deemed to limit or restrict the right of FDMS or any of its Affiliates
to develop, broker or process any other private label or co-branded Transaction
Card.
3.7 Duplicate System Right.
3.7.1 No later than May 1, 1999, the Company shall specify,
configure and deploy a back up and redundant system at a facility
chosen by FDMS. FDMS shall pay the associated hardware and third-party
software expenses. Thereafter, the Company shall promptly provide and
install all future upgrades and updates to such up system. FDMS may
install the equipment as a non-operational back up system (until such
time of breach or termination of this Agreement as set forth herein),
or operate the same as a third data center relating to the Company's
obligations set forth herein.
3.7.2 If the Company fails to specify, configure and deploy
such system (other than due to the failure of FDMS) by May 1, 1999, the
Company shall pay to FDMS, as liquidated damages and not as a penalty,
$5,000 per day for each day after May 1, 1999 that such system is not
specified, configured and deployed. If the Company still fails to
specify, configure and deploy such system (other than due to the
failure of FDMS) by July 1, 1999, in addition to the liquidated damages
set forth in the previous sentence, the Company shall pay to FDMS in
cash as liquidated damages and not as a penalty, $10,000 per day for
each day commencing July 1, 1999 that such system is not specified,
configured and deployed. The Company shall pay to FDMS such cash
liquidated damages monthly.
4. LICENSE AND OWNERSHIP.
4.1 License to Electronic Commerce Tools. The Company hereby grants to
FDMS, its Affiliates, and their respective successors and assigns, a
non-exclusive, worldwide, limited, non-transferable (subject to Section 13.13),
royalty-free (subject to payment obligations set forth in Exhibit 7) license
during the Term to use, execute, license and market (in object code only and in
accordance with the Company's standard terms and conditions) the Electronic
Commerce Tools internally or externally: (a) through any and all means now known
or hereafter invented; and (b) on any and all platforms now known or hereafter
invented; and (c) on any and all media now known or hereafter invented.
4.2 License to Company Software. The Company hereby grants to FDMS, its
Affiliates, and their respective successors and assigns, a non-exclusive,
worldwide, limited, non-transferable (subject to Section 13.13), royalty-free
license during the Term to: (a) use and execute the Company Software solely in
connection with the duplicate system contemplated in Section 3.7 and Exhibit
2.1; and (b) copy the same for back-up, disaster recovery and archival purposes
only.
4.3 License to Link to FDMS Software. FDMS hereby grants to the Company
a non-exclusive, nontransferable, limited right, exercisable during the Term, to
link to the FDMS Software solely to perform its obligations set forth herein.
-9-
10
4.4 License to Company Marks.
4.4.1 License Grant. The Company hereby grants to FDMS and its
Affiliates a revocable, royalty-free, nontransferable, nonexclusive
right and license to use the Company Marks for the Term in connection
with the performance by FDMS of its obligations set forth in this
Agreement. FDMS' use of the Company Marks shall be limited to display
of the same on or in connection with advertising and marketing
materials promoting the Company's services and Electronic Commerce
Tools. FDMS accepts such grant, acknowledges and admits that it has no
right, title or interest in the Company Marks other than the right to
use the Company Marks as set forth in this Agreement, and agrees to
knowingly do nothing inconsistent with the Company's ownership rights
which would in any material way cause dilution of any of the Company
Marks.
4.4.2 Quality Control. FDMS shall use the Company Marks only
in connection with the performance of its obligations set forth herein.
Without limitation, the Company Marks may be used only in ways that
comply in all material respects with applicable law and that meet
standards generally accepted in the Internet and Transaction Card
industries. FDMS shall provide to the Company copies of all advertising
and marketing brochures and other materials bearing the Company Marks,
upon the request of the Company. In addition, FDMS shall provide to the
Company such information as the Company may reasonably request for the
purpose of determining whether FDMS has complied with the foregoing
standards. If, in the reasonable opinion of the Company, FDMS fails to
conform to the foregoing standards at any time, the Company shall so
notify FDMS. Upon such notification, FDMS shall promptly take steps
reasonably satisfactory to the Company to cause its use of the Company
Marks to conform to the foregoing standards. All advertising and
marketing brochures and other materials bearing Company Marks shall be
subject to the prior review and approval of the Company, which approval
shall not be unreasonably withheld or delayed.
4.4.3 Display of Company Marks. FDMS agrees to take reasonable
steps to guard against the dilution or misuse of Company Marks by using
and displaying the same, it being understood that such display shall be
in accordance with the depiction of the Company Marks provided to FDMS
from time to time.
4.4.4 Infringement or Unfair Competition. FDMS shall notify
the Company of any conflicting uses of or any acts of infringement or
unfair competition involving the Company Marks by unauthorized persons
to which FDMS becomes aware. The Company shall have the right, at its
option, to engage or not engage in infringement or unfair competition
proceedings involving Company Marks, or to authorize FDMS to engage in
such proceedings.
4.5 License to FDMS Marks.
-10-
11
4.5.1 License Grant. FDMS hereby grants to the Company a
revocable, royalty-free, nontransferable, nonexclusive right and
license to use the FDMS Marks for the Term in connection with the
performance by the Company of its obligations set forth in this
Agreement. The Company's use of the FDMS Marks shall be limited to
display of the same on the Stuff Site and Mall Site or in connection
with advertising and marketing materials promoting the Stuff Site and
Mall Site and FDMS' Merchant Acquiring Business. The Company accepts
such grant, acknowledges and admits that it has no right, title or
interest in the FDMS Marks other than the right to use the FDMS Marks
as set forth in this Agreement, and agrees to knowingly do nothing
inconsistent with FDMS' ownership rights which would in any material
way cause dilution of any of the FDMS Marks.
4.5.2 Quality Control. The Company shall use the FDMS Marks
only in connection with the performance of its obligations set forth
herein. Without limitation, the FDMS Marks may be used only in ways
that comply in all material respects with applicable law and that meet
standards generally accepted in the Internet and Transaction Card
industries. The Company shall provide to FDMS copies of all advertising
and marketing brochures and other materials (including screen shots)
bearing the FDMS Marks, upon the request of FDMS. In addition, the
Company shall provide to FDMS such information as FDMS may reasonably
request for the purpose of determining whether the Company has complied
with the foregoing standards. If, in the reasonable opinion of FDMS,
the Company fails to conform to the foregoing standards at any time,
FDMS shall so notify the Company. Upon such notification, the Company
shall promptly take steps reasonably satisfactory to FDMS to cause the
Company's use of the FDMS Marks to conform to the foregoing standards.
All advertising and marketing brochures and other materials (including
screen shots) bearing FDMS Marks shall be subject to the prior review
and approval of FDMS, which approval shall not be unreasonably withheld
or delayed.
4.5.3 Display of FDMS Marks. The Company agrees to take
reasonable steps to guard against the dilution or misuse of FDMS Marks
by using and displaying the same, it being understood that such display
shall be in accordance with the depiction of the FDMS Marks provided to
the Company from time to time.
4.5.4 Infringement or Unfair Competition. The Company shall
notify FDMS of any conflicting uses of or any acts of infringement or
unfair competition involving the FDMS Marks by unauthorized persons to
which the Company becomes aware. FDMS shall have the right, at its
option, to engage or not engage in infringement or unfair competition
proceedings involving FDMS Marks, or to authorize the Company to engage
in such proceedings.
4.6 Gateway Use Right. FDMS hereby grants the Company the right to
access and use the Gateway during the Term solely in connection with its
performance of the Development and Operational Services, the Marketing Services,
and its other obligations under this Agreement or such other uses as the parties
may agree.
-11-
12
4.7 Delivery. Promptly after the execution of this Agreement, the
parties shall determine the timing, format and frequency of the delivery of the
Electronic Commerce Tools, Company Software and FDMS Software.
4.8 Ownership.
4.8.1 By the Company. As between FDMS and the Company, the
Company shall own the Electronic Commerce Tools, Company Software,
Stuff Site, and, subject to FDMS' ownership rights under Section 4.8.2
and subject to FDMS' ownership of all works (including software and
other deliverables) developed by FDMS employees or consultants pursuant
to Section 2.10, all other deliverables under this Agreement.
4.8.2 By FDMS. As between FDMS and the Company, FDMS shall own
the FDMS Software, the Mall Site, the FDMS Security Xxxx Software, the
hardware and related materials identified in Section 3.7.1, "Stuff"
websites of Affiliates and the Gateway.
4.8.3 Enabling Provision. The Company acknowledges that the
Gateway and FDMS Security Xxxx Software is a work specially ordered and
commissioned for use as a contribution to a collective work and is a
work made for hire pursuant to U.S. Copyright Law. If the Gateway or
the FDMS Security Xxxx Software or any portion of either is not
considered a work made for hire, or if the Company may be entitled to
claim any other ownership interest in the same, the Company hereby
transfers, grants, conveys, assigns, and relinquishes exclusively to
FDMS all of the Company's right, title, and interest in and to the
same, under patent, copyright, trade secret and trademark law, in
perpetuity or for the longest period otherwise permitted by law.
4.9 Third Party Materials. Except for the materials listed in Exhibit
4.9 to this Agreement, as such exhibit may be amended by the parties from time
to time, the Company shall not incorporate into the Development and Operational
Services or Marketing Services or deliverables any content, software or other
materials owned by third parties except such other additional third party
materials identified to FDMS and approved by FDMS, which approval shall not be
unreasonably withheld or delayed. With respect to third party materials that are
so identified in Exhibit 4.9 or other such additional third party materials
identified to FDMS and approved by FDMS, the Company shall provide to FDMS
copies of any agreements or other agreements between the Company and such third
party governing use of such third party materials.
5. CERTAIN ADDITIONAL ACTIONS. Within sixty (60) days after the
Effective Date of this Agreement, the Company shall establish a special purpose
corporation, trust, limited liability company or other vehicle (the "SPV") and
shall transfer to the SPV all of its right, title and interest in and to the URL
for the Stuff Site and all associated trademark and service xxxx rights
(collectively, the "SPV Rights"). The transfer of the SPV Rights shall be
structured to be irrevocable and absolute so that the SPV Rights would not, in
the event of a bankruptcy proceeding involving the Company, constitute property
of the Company's bankruptcy estate. The SPV shall be
-12-
13
further structured, both in respects to its capitalization and ongoing
operations, to be "bankruptcy-remote" by limitations on its business and by
causing it to follow procedures which will maintain its corporate separateness
from the Company and the Company's Affiliates and shall minimize the possibility
of the SPV being consolidated with the Company or any such Affiliate in the
event of a bankruptcy proceeding involving the Company or such Affiliates. Such
protections are likely to include, appointment of at least one outside director
which is independent from the Company, special charter provisions restricting
the SPV's ability to file for bankruptcy without 100% director consent, separate
bank accounts, separate books and records, and general maintenance of
arms'-length relations between the SPV and its Affiliates. In order to further
minimize the possibility of consolidation in bankruptcy, FDMS shall have the
option, but not the obligation, to subscribe for an equity interest in the SPV.
In connection with the formation of the SPV, the SPV shall enter into: (i) a
license agreement with the Company providing for the Company's exclusive use of
all of the SPV Rights, which right shall only be terminable in the case of an
Event of Default as set forth in Section 12.3.7 and (ii) a license agreement
with FDMS providing (at a minimum) for the transfer of use of the SPV Rights
exclusively to FDMS if the Company undergoes an Event of Default set forth in
Section 12.3.7, which license agreement shall be irrevocable and terminable only
upon FDMS' consent or in accordance with Section 12.7.
6. PROCESSOR FOR SHOPPING MALL LOCATED ON ANIMALHOUSE SITE. The Company
agrees that FDMS shall, for a period ending six (6) months after the Effective
Date, have the option to be the exclusive merchant processor, at a then
reasonable rate for similar merchant processing services, for the shopping mall
located on the Animalhouse Site.
7. PAYMENT TERMS.
7.1 Payment By FDMS to the Company. FDMS shall pay the Company for the
Development and Operational Services and Marketing Services performed under this
Agreement at the rates and according to the payment schedule set forth in
Exhibit 7.
7.2 Payment By the Company to FDMS. The Company shall pay FDMS for the
performance of its obligations under this Agreement at the rates and according
to the payment schedule set forth in Exhibit 7.
7.3 Most Favored Pricing. Notwithstanding anything to the contrary set
forth herein, the Company represents and warrants that the prices and benefits
granted by the Company hereunder are at least as favorable as the benefits and
terms granted by the Company to any other Person. If the Company or any
Affiliate of the Company enters into any subsequent or renewal agreement with
any other Person during the Term that provides for pricing or benefits more
favorable than those contained in this Agreement, this Agreement shall be deemed
to be modified to provide FDMS with those more favorable benefits and terms. The
Company shall notify FDMS promptly of the existence of such more favorable
pricing or benefits and FDMS shall have the right to receive the same
immediately. If requested in writing by FDMS, the Company shall amend this
Agreement to contain the more favorable terms and conditions. FDMS may, at its
own expense, audit the
-13-
14
Company's records to verify that FDMS is receiving the most favorable pricing
and benefits granted by the Company to any other Person; provided that such
audit is conducted during normal business hours and in a manner that will not
unreasonably interfere with the Company's business operations.
7.4 Costs. Except as set forth herein, each party shall be responsible
for all costs and expenses incurred by it in connection with the performance of
its respective obligations under this Agreement.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Company represents,
warrants and covenants to FDMS as follows:
8.1 Leading Technology.
8.1.1 The Company shall perform the Development and
Operational Services and the Marketing Services: (i) in a professional
and workmanlike manner in accordance with the highest applicable
industry standards; (ii) in compliance with all Development and
Operational Services and Marketing Services obligations and
specifications set forth in this Agreement and its exhibits; and (iii)
so that the technology used in connection with the Stuff Site and Mall
Site is considered leading technology relative to other shopping
portals and Internet mall hosting providers. In furtherance of the
foregoing, FDMS may elect, at its sole cost and expense, no more
frequently than twice in any twelve (12) month period, to cause a third
Person to review and benchmark the technologies used in the Stuff Site
and Mall Site to ensure that the same is equal to or better than the
top ten percent (10%) of all providers of similar services. FDMS and
the Company shall promptly agree on the identity of a third Person to
perform such review and benchmark services.
8.1.2 If any review and benchmark reveals that the technology
does not meet the foregoing standards, and such failure substantially
impairs the ability of FDMS to: (i) service its current customers using
the Development and Operational Services provided by the Company
hereunder; or (ii) add additional customers to use the Development and
Operational Services, FDMS shall notify the Company of the same, and
the fees payable by FDMS hereunder shall be reduced by fifty percent
(50%) commencing upon the Company's receipt of the notice of the
failure provided by FDMS and ending on the date on which either: (a)
the parties agree that such failure has been cured; or (b) an
Arbitration Panel determines that such failure has been cured. If the
Company fails to remedy such failure within six (6) months after FDMS'
notification to the Company of the same, the Company shall pay FDMS for
all reasonable conversion costs and expenses incurred by FDMS and its
Affiliates associated with the deconversion of FDMS Merchants.
8.2 Primary Shopping Site. The Stuff Site shall be the Primary Shopping
Website of the Company and its Affiliates.
-14-
15
8.3 Exclusive Mall Site. The Mall Site shall be the exclusive shopping
mall displayed on the Stuff Site.
8.4 Exclusive On-Line Internet Accessible Merchant Application Process.
Excluding CardServices International and Sage Networks, FDMS and its Affiliates
shall be the only Persons that the Company or its Affiliates permit to offer to
third Persons on-line Internet accessible application processes relating to the
Merchant Acquiring Business, including, the Mall Site and the Stuff Site, that
are owned, operated or controlled by the Company or any of its Affiliates.
8.5 Year 2000. The Development and Operational Services, Marketing
Services, Electronic Commerce Tools, and Company Software are and shall remain
year 2000 compliant in that:
8.5.1 date data from at least 1900 through 2101 will process
without error or interruption due solely to the change in century, in
any level of computer hardware, software or services, including,
microcode, firmware, system and application programs, files, databases
and computer services;
8.5.2 there will be no loss of functionality of any of the
foregoing due solely to the change in century, with respect to the
introduction, processing or output of records containing dates falling
on or after January 1, 2000; and
8.5.3 on and after January 1, 2000, all of the foregoing will
continue to be interoperable, in the same manner as they are prior to
January 1, 2000, with software and hardware that may deliver records
to, receive records from or interact with the foregoing in the course
of processing data, provided that such other software and hardware uses
a century windowing or interpretive approach (with a pivot year of 50).
8.6 Non-Competition. The Company shall not solicit FDMS Merchants for
the purpose of promoting, advertising or selling goods or services unrelated to
the Mall Site without first obtaining FDMS' written approval.
9. INDEMNIFICATION.
9.1 Obligation. The Company shall indemnify, defend and hold FDMS and
its directors, officers, employees, affiliates and agents (collectively, the
"Indemnified Persons") harmless from and against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies, including interest, penalties, court costs and
attorneys' fees (collectively, "Losses"), that any Indemnified Person shall
incur or suffer, which arise, result from, or relate to any breach or alleged
breach of, or failure or alleged failure by the Company to perform, any of its
representations, warranties or covenants set forth in Section 8.5.
9.2 Third Party. If any indemnifiable claim by a third Person is made
against any Indemnified Person, such Indemnified Person shall promptly provide
written notice to the Company
-15-
16
of such claim; provided that the failure to give such notice shall not affect
any rights of such Indemnified Person hereunder except to the extent the Company
is materially prejudiced by such failure to give notice. By delivering written
notice to such Indemnified Person within 15 days after receipt of such
Indemnified Person's notice, the Company may, or upon written request of such
Indemnified Person shall, assume the defense of such claim at its sole expense
through counsel reasonably satisfactory to such Indemnified Person, provided
that: (i) the Company shall not permit any lien, encumbrance or other adverse
charge upon any asset of such Indemnified Person; (ii) the Company shall permit
such Indemnified Person to participate in such settlement or defense through
counsel selected by such Indemnified Person at such Indemnified Person's
expense; and (iii) the Company shall agree to promptly reimburse such
Indemnified Person for the full amount of its liability to the claimant provided
such liability is indemnifiable under Section 9.1. If the Company shall not have
employed counsel to defend such claim or if such Indemnified Person shall have
reasonably concluded (with the written advice of counsel) that the position of
such Indemnified Person and the Company may be in conflict, the Company shall
not have the right to direct the defense of any such claim on behalf of such
Indemnified Person and the reasonable legal and other expenses incurred by such
Indemnified Person shall be borne by the Company. Notwithstanding the foregoing,
each Indemnified Person shall have the right to pay or settle any such claim
provided in such event it shall waive its right to indemnity therefor by the
Company.
10. LIMITATION OF LIABILITY. EXCEPT IN THE EVENT OF A BREACH OF SECTION
11 OR PURSUANT TO THE COMPANY'S INDEMNITY OBLIGATIONS SET FORTH IN SECTION 9,
NEITHER PARTY SHALL BE LIABLE FOR (I) ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OF
ANY KIND (INCLUDING, LOST INCOME OR LOST REVENUE), OR (II) ANY PUNITIVE, SPECIAL
OR EXEMPLARY DAMAGES, REGARDLESS OF THE CAUSE OF ACTION, EVEN IF THE OTHER PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11. CONFIDENTIALITY.
11.1 Definition of Confidential Information. "Confidential Information"
shall mean any information or materials which could reasonably be considered
confidential and disclosed by either party in any form or medium and whether or
not designated either orally, visually or in writing as confidential (or like
designation) at the time of disclosure, including any data or information that
is competitively sensitive material, and not generally known to the public,
including products, planning information, marketing strategies, plans, finance,
operations, customer relationships, customer profiles, sales estimates, business
plans, and internal performance results relating to the past, present or future
business activities of a party, their respective Affiliates and the customers,
clients and suppliers of any of the foregoing, and the nature and terms of this
Agreement.
11.2 Exclusions. Notwithstanding the foregoing Section 11.1, the
parties' obligations respecting confidentiality shall not apply to any
particular information of a party that the other party can demonstrate: (i) was,
at the time of disclosure to it, in the public domain; (ii) after disclosure to
it, is published or otherwise becomes part of the public domain through no fault
of the receiving
-16-
17
party; (iii) was in the possession of the receiving party at the time of
disclosure to it without being subject to another confidentiality agreement;
(iv) was received after disclosure to it from a third party who had a lawful
right to disclose such information to it; (v) was independently developed by the
receiving party without reference to Confidential Information of the furnishing
party; (vi) was required to be disclosed to any regulatory body having
jurisdiction over FDMS or the Company or any of their respective clients; or
(vii) that disclosure is necessary by reason of legal, accounting or regulatory
requirements beyond the reasonable control of the receiving party. In the case
of any disclosure pursuant to Section 11.2(vi) or 11.2(vii), to the extent
practical, the disclosing party shall give prior notice to the other party of
the required disclosure and shall use commercially reasonable efforts to obtain
a protective order covering such disclosure. If such a protective order is
obtained, such information shall continue to be deemed to be Confidential
Information.
11.3 Non-Disclosure Obligation. Each party to this Agreement shall: (i)
safeguard the confidentiality of the disclosing party's Confidential
Information, exercising at least the same degree of care as it would with its
own Confidential Information of a similar nature, but never less than reasonable
care; (ii) hold in confidence, and not disclose or reveal to any Person, any
Confidential Information disclosed under this Agreement without the clear and
express prior written consent of a duly authorized representative of the
disclosing party; and (iii) not use or disclose any of the Confidential
Information for any purpose at any time, other than for the limited purpose of
performance under this Agreement. Subject to Section 4, upon termination of this
Agreement for any reason, each party shall promptly return to the disclosing
party all Confidential Information (and any copies thereof) in its possession.
11.4 Irreparable Harm. Each party acknowledges that if it breaches (or
attempts to breach) its obligations under this Section 11, the other party will
suffer immediate and irreparable harm, it being acknowledged that legal remedies
are inadequate. Accordingly, if a court of competent jurisdiction should find
that a party has breached (or attempted to breach) any such obligations, such
party will not oppose the entry of an appropriate order compelling performance
by such party and restraining it from any further breaches (or attempted
breaches).
12. TERM, TERMINATION AND EXCLUSIVITY TERMINATION.
12.1 Initial Term. This Agreement shall be effective on the Effective
Date and shall continue for a period of ten (10) years (the "Initial Term"),
unless earlier terminated as set forth herein.
12.2 Renewal Term. This Agreement shall automatically renew for an
additional two (2) year term (each, a "Renewal Term") unless either party
provides notice of termination at least ninety (90) days prior to the expiration
of the Initial Term or the then-current Renewal Term. Terminations pursuant to
this Section 12.2 shall be subject to the termination consequences set forth in
Section 12.6.1.
12.3 Events of Default. The occurrence of any of the following events
(individually, an "Event of Default") shall constitute an Event of Default under
this Agreement:
-17-
18
12.3.1 Certain Payment of Obligations under this Agreement.
The failure by either party to make any payment totaling less than
$500,000 to the other within ninety (90) days of when such payment is
due and owing pursuant to the terms and conditions of this Agreement.
12.3.2 Payment of Obligations under this Agreement. The
failure by either party to make any payment totaling $500,000 or more
to the other within ninety (90) days of when such payment is due and
owing pursuant to the terms and conditions of this Agreement.
12.3.3 Material Failure to Perform Under this Agreement. The
failure of any party to perform any material term or obligation
contained in this Agreement that substantially impairs the ability of
FDMS to: (i) service its current customers using the Development and
Operational Services provided by the Company hereunder; or (ii) add
additional customers to use the Development and Operational Services.
12.3.4 Other Failure to Perform Under this Agreement. The
failure of any party to perform any other material term or obligation
contained in this Agreement other than those set forth in Section
12.3.3.
12.3.5 Certain Failures Relating to the Warrant. The failure
of the Company to issue the Warrant (as defined in the Investment
Agreement) or the underlying shares if required by the terms of the
Investment Agreement.
12.3.6 Breach of Representation, Warranty or Covenant. A
material breach by the Company of its covenants or any representation
or warranty set forth in Section 8 shall prove to have been false in
any material respect upon the date when made or thereafter.
12.3.7 Insolvency, Bankruptcy, Etc.
(i) If any party shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay or
shall generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of such
party or of any substantial part of the assets of such party
or shall commence any case or other proceeding relating to
such party under any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation or similar
law of any jurisdiction, now or hereafter in effect, or shall
take any action to authorize or in furtherance of any of the
foregoing, or any such petition or application shall be filed
or any such case or other proceeding shall be commenced
against such party and such party shall indicate its approval
thereof, consent thereto, or acquiescence therein.
(ii) If a decree or order shall be entered appointing any such
trustee, custodian, liquidator, or receiver, or adjudicating
any party bankrupt or insolvent, or approving
-18-
19
a petition in any such case or other proceeding, or a decree
or order for relief shall be entered in respect of such party
in an involuntary case under Federal bankruptcy laws as now or
hereafter in effect.
(iii) If the available cash equivalent is less than the sum of
the prior three (3) months gross revenues of the Company, less
core expenses. As used in this Section 12.3.7, the term
"available cash equivalent" means the month end cash and cash
equivalents of the Company, plus current (i.e., less than
thirty (30) days) receivables of the Company, plus any amounts
owed from FDMS other than amounts disputed in good faith, and
the term "core expenses" means those non-discretionary
expenses of the Company necessary to maintain the current
levels of business. In furtherance of the foregoing, the
Company shall provide information relating to the foregoing as
reasonably requested by FDMS.
12.3.8 Change in Control. In the event of a change in Control
of the Company where: (i) such Control is acquired, directly or
indirectly, in a single transaction or series of related transactions
by a competitor of FDMS or any Affiliate of FDMS; (ii) all or
substantially all of the assets of the Company are acquired by a
competitor of FDMS or any Affiliate of FDMS; or (iii) the Company is
merged with or into another entity to form a new entity, and such
entity is a competitor of FDMS or any Affiliate of FDMS.
12.3.9 Material Change to Xxxxx.xxx Product or Brand. A
material change to the Xxxxx.xxx product or brand to which FDMS
reasonably objects.
12.4 Notice of Breach; Right to Terminate. If any Event of Default
shall have occurred, the non-defaulting party shall notify the defaulting party
in writing (the "Notice of Default") of such Event of Default. If such Event of
Default has not been cured or waived in writing within thirty (30) days after
the date of the Notice of Default, the non-defaulting party may, in its
discretion, immediately terminate this Agreement. The foregoing termination
right is not intended to be exclusive of any other remedy given hereunder.
12.5 Limitation on Termination Right. The parties acknowledge and agree
that if the Company commits an Event of Default with respect to Section 8.2, the
Company shall be deemed to have cured such Event of Default if the Company,
within five (5) business days, moves the Mall Site to its or its Affiliate's new
Primary Shopping Website under similar terms and conditions to the operation of
the Mall Site.
-19-
20
12.6 Effect of Expiration or Termination.
12.6.1 Generally. Upon expiration or termination of this
Agreement for any reason: (i) the Company and FDMS shall promptly
comply with the provisions of Section 11.3 regarding the return of
Confidential Information to the extent that a party is not permitted to
use the same as contemplated by this Agreement; (ii) the Company and
FDMS shall promptly remit to the other party any and all fees due and
owing to the other party; and (iii) the rights granted in Sections 4.1,
4.2, 4.3, 4.5 and 4.6 shall terminate. Upon any such termination, FDMS
may: (a) continue to have existing sublicenses of Electronic Commerce
Tools previously granted hereunder to sublicensees continue, provided
that FDMS continues to pay the Company for such rights in accordance
with this Agreement; or (b) terminate such sublicenses granted to
sublicensees hereunder, in which case the Company may elect to license
Electronic Commerce Tools to such former sublicensees directly.
12.6.2 Specific Termination Consequences. Upon termination of
this Agreement for an Event of Default by the Company set forth in
Sections 12.3.2, 12.3.3, 12.3.5, 12.3.6, 12.3.7, 12.3.8, or 12.3.9, it
being understood that this Section 12.6.2 shall not apply to an Event
of Default relating to Section 8.1 or 8.5, in addition to the
consequences set forth in Section 12.6.1, FDMS may exercise its rights
set forth in the Escrow Agreement. In addition, following the specified
cure period, the on-going payment obligations set forth in Exhibit 7
shall cease.
12.6.3 Dispute Resolution. If the Company disputes whether an
Event of Default set forth in Section 12.6.2 has occurred, the Company
may initiate the procedures set forth in Section 2 of Exhibit 13.10 to
determine whether any such Event of Default had occurred. If the
Arbitration Panel rules that an Event of Default shall have occurred,
this Agreement shall immediately terminate as set forth herein. If the
Arbitration Panel rules that no Event of Default shall have occurred:
(i) FDMS shall promptly return to the escrow agent set forth in the
Escrow Agreement the Deposit Materials and all copies thereof made by
FDMS; (ii) the license granted pursuant to the Escrow Agreement shall
terminate; (iii) the parties shall promptly comply with their payment
obligations (if any) set forth in Exhibit 7 for the period of time
during which the parties ceased such obligations; and (iv) the
Agreement shall remain in full force and effect.
12.6.4 Limitation. Notwithstanding anything to the contrary
set forth in Section 12.6.2, if the Company disputes whether an Event
of Default shall have occurred pursuant to Section 12.3.3, FDMS and the
Company shall continue to make all payments under the Agreement during
the pendency of any procedures set forth in Section 2 of Exhibit 13.10.
If the Arbitration Panel determines that an Event of Default pursuant
to Section 12.3.3 shall have occurred, this Agreement shall immediately
terminate as set forth herein, provided that the parties shall promptly
repay to the other all fees paid (if any) during the pendency of the
procedures set forth in Section 2 of Exhibit 13.10.
-20-
21
12.6.5 Survival. The parties' respective rights and
obligations in Sections 4.8, 7, 8.5, 9, 10, 11, 12.6.1 and 13 shall
survive the expiration or termination of this Agreement.
12.7 Exclusivity. If FDMS and its Affiliates have failed to obtain in
the aggregate at least 10,000 FDMS Merchant Sites, Brochure Sites and licenses
of Electronic Commerce Tools (whether or not re-branded) by the thirty-six (36)
month anniversary of the Effective Date, the Company shall no longer be
obligated to comply with Sections 3.6, 6 or 8.3 of this Agreement, Section 1 of
Exhibit 2.2, and the license granted to FDMS in accordance with Section 5 shall
terminate.
13. MISCELLANEOUS TERMS.
13.1 Escrow Agreement. Within fifteen (15) days after the execution of
this Agreement, the Company and FDMS shall enter into the Escrow Agreement
substantially in the form set forth in Exhibit 13.1. The parties acknowledge and
agree the Escrow Agreement is an agreement supplementary to this Agreement.
13.2 Further Assurances. Each party hereto agrees to cooperate with the
other party, at such other party's request and at such other party's expense, to
execute any and all documents or instruments, or to obtain any consents, in
order to assign, transfer, perfect, record, maintain, enforce or otherwise carry
out the intent of the terms of this Agreement.
13.3 Delays and Omissions. No delay or omission to exercise any right,
power or remedy accruing to upon any breach or default of a party under this
Agreement shall impair any such right, power or remedy of any such holder nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any such holder of
any provisions or conditions of this Agreement must be made in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, under this Agreement shall be cumulative and not alternative.
13.4 Amendments. Except as otherwise expressly provided herein, the
provisions of this Agreement may be amended only by a writing signed by the
parties hereto.
13.5 Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto, whether so
expressed or not.
13.6 Final Agreement. This Agreement, together with those documents
which are exhibits hereto, constitute the final agreement of the parties
concerning the matters referred to herein and therein, and supersedes all prior
and contemporaneous agreements and understandings.
-21-
22
13.7 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
13.8 Descriptive Heading. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
this Agreement.
13.9 Notices. Any notices required, desired or permitted to be given
hereunder, shall be delivered personally, sent by overnight courier or mailed,
registered or certified mail, return receipt requested, to the following
addresses (or to such other address as each party may specify in a notice given
hereunder) or transmitted by facsimile transmission (with such transmission
promptly confirmed by writing delivered personally, by overnight courier or
mailed as provided in this Section 13.9) and shall be deemed to have been
received on the day of personal delivery, one business day after delivery to the
overnight courier service, three business days after such mailing or, in the
case of facsimile transmission, when received:
If to FDMS:
First Data Merchant Services Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
-and-
First Data Merchant Services Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy in the case of a notice to FDMS to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
-22-
23
If to the Company:
iMall, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
with a copy in the case of a notice to the Company to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
13.10 Dispute Resolution.
13.10.1 In the event of a Dispute, the parties shall resolve
the same in accordance with the terms set forth in Exhibit 13.10.
13.10.2 Notwithstanding anything to the contrary set forth
herein, neither party shall be required to submit any dispute or
disagreement regarding the interpretation of any provision of this
Agreement, the performance by either party of such party's obligations
under this Agreement or a default hereunder to the mechanisms set forth
in Section 13.10.1, if such submission would solely be seeking
equitable relief from irreparable harm.
13.11 Governing Law. THE VALIDITY, MEANING AND EFFECT OF THIS AGREEMENT
SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
13.12 Execution in Counterparts. Execution in Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, and such counterparts
together shall constitute one instrument.
13.13 Assignment. This Agreement may not be assigned or transferred by
operation of law or otherwise by either party without the prior written consent
of the other party, which consent shall not be unreasonably withheld or delayed,
provided, however, FDMS may assign or transfer, by operation of law or
otherwise, its rights, or delegate its duties under this Agreement to any
Affiliate if such Affiliate agrees to abide by the terms and conditions of this
Agreement and FDMS provides the Company with thirty (30) days prior notice of
such assignment or transfer, and provided further that FDMS may assign or
transfer this Agreement by operation of law or otherwise pursuant to: (i)
-23-
24
a sale of substantially all of the assets of FDMS; or (ii) a merger or other
combination of FDMS. Subject to the foregoing, the rights and obligations of
each party under this Agreement shall inure to the benefit of and shall be
binding upon the permitted successors and assigns of each party.
13.14 Independent Contractor. The relationship of the parties shall be
solely that of independent contractor and not that of a joint venture,
partnership, or any other joint relationship.
13.15 Draft Exhibits. As of the Effective Date, Exhibits 2.1 and 4.9
are set forth in draft form that are substantially complete. Such Exhibits are
subject to further good faith discussions by the parties hereto for fifteen (15)
days after the Effective Date. Neither party shall be required to negotiate in
good faith changes to such Exhibits after such fifteen (15) day period. If any
changes to such Exhibits have been approved by the parties hereto by the end of
such fifteen (15) day period, then such Exhibits shall be modified to reflect
such change and such modified Exhibits (signed and delivered by the parties
hereto) shall replace the form of the corresponding Exhibit attached hereto. If
the parties fail to agree to any changes to an Exhibit, the parties agree that
any such Exhibit shall be deemed to be complete in the form originally attached
hereto.
13.16 Press Release; Public Announcements. Neither party or their
respective Affiliates shall make any reference to the other party or its
Affiliates directly or indirectly in any press release or public announcement
without such other party's prior written consent, which consent shall not be
unreasonably withheld or delayed.
[REMAINDER LEFT INTENTIONALLY BLANK]
-24-
25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
IMALL, INC.
By:_____________________________________
Name: Xxxxxxx Xxxxxxxxxx
Title: Chairman and Chief Executive Officer
FIRST DATA MERCHANT SERVICES CORPORATION
By:_____________________________________
Name: Xxxx Xxxxxx
Title: Executive Vice President, Business
Development
-25-
26
EXHIBIT LIST TO MARKETING AGREEMENT
Exhibit 2.1 - Development and Operational Services. [To be completed by the
parties]
Exhibit 2.2 - Marketing Services. [Details of marketing obligations of the
Company and FDMS under the Marketing Agreement]
Exhibit 2.3 - Customer Service Obligations. [Details of customer support
obligations of the Company and FDMS under the Marketing Agreement]
Exhibit 2.7 - Product Search Preference. [To be completed by the parties]
Exhibit 4.9 - Third Party Materials. [To be completed by the parties]
Exhibit 7 - Payment Terms. [Details of fees with respect to the Company and FDMS
under the Marketing Agreement]
Exhibit 13.1 - Source Code Escrow Agreement. [Agreement regarding source code
escrow arrangements]
Exhibit 13.10 - Dispute Resolution Procedures. [Details of dispute resolution
procedures]
