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TRAFFIX INC - 10-K - 19990316 - EXHIBIT_10
EXHIBIT 10.25
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made as of
the 3rd day of October, 1998, by and between Quintel Communications, Inc., a New
York corporation, with an office address at One Blue Hill Plaza, 5th Floor, P.O.
Box 1665, Pearl River, New York 10965 (hereinafter "Quintel"), and U.S. Mobile
Services, Inc., a Delaware Corporation with an address at 10810 Guilford Road,
Suite 101, Annapolis Junction, Maryland 20701 (hereinafter "USM").
BACKGROUND
WHEREAS, USM is a national wireless and wireline resale
provider of prepaid wireless, prepaid wireline and prepaid local exchange
services;
WHEREAS, Quintel is in the business of providing inter alia,
telecommunications products and services as well as direct marketing services to
its clients;
WHEREAS, Quintel has developed and is currently running a
sales commercial on a national basis which advertises a "free cellular phone" to
any customer that switches his/her long distance wireline telephone service to a
company represented by Quintel (hereinafter the "Quintel Affiliate");
WHEREAS, USM is desirous of supplying the "free cellular
phone" as well as monthly cellular service (under certain terms and conditions)
to the Quintel customers mentioned above;
NOW, THEREFORE, in consideration of the mutual covenants,
promises and conditions herein set forth, Ten and 00/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. RECITALS. The foregoing recitals are hereby
incorporated herein by reference as if fully set
forth at this point in the text of the Agreement.
2. QUINTEL RESPONSIBILITIES AND PAYMENT OBLIGATIONS. On
the terms and subject to the conditions set forth in
this Agreement, Quintel agrees as follows:
a. Quintel will produce and fund all
productions of spots and/or infomercials;
b. Quintel will manage and fund all media
purchases;
c. Quintel will write all telemarketing scripts
and manage the inbound telemarketing process
with respect to its programs;
d. Quintel will provide USM with a list of
customers that have qualified for the "free
cellular phone" program;
e. Quintel will provide the aforementioned
customer information to USM via electronic
file with the pertinent information
regarding each customer;
f. Quintel will pay USM {Confidential portion
omitted and filed separately with the
Commission} for each cellular phone shipped
with respect to customers that receive
phones in conformance with the Quintel "free
cellular phone" program (i.e.: phone
shipment after the customer has been a long
distance customer of the Quintel affiliate
for {Confidential portion omitted and filed
separately with the Commission} which phones
shall be loaded with {Confidential portion
omitted and filed separately with the
Commission} for use by the customer. Quintel
will make the aforementioned payment to USM
within seven days subsequent to the phone
shipment mentioned above. The cellular
phones to be shipped with respect to the
"free cellular phone" program mentioned
above will be shipped to customers by USM
only after authorization from Quintel;
g. Quintel will receive a {Confidential
portion omitted and filed separately with
the Commission} percent commission on
prepaid cellular airtime sold to each
customer on a recurring monthly basis
(exclusive of any initial airtime loads)
during the entire period such customer
remains a customer of USM or any of its
subsidiaries or affiliates.
3. USM RESPONSIBILITIES AND PAYMENT OBLIGATIONS. On the
terms and subject to the conditions set forth in this
Agreement, USM agrees as follows:
a. USM will carry the inventory of prepaid
cellular phone hardware and will fulfill
customer orders. The aforementioned phones
will be loaded with {Confidential portion
omitted and filed separately with the
Commission} of airtime when they are shipped
from the USM fulfillment center. It is
understood and agreed by the parties hereto
that Quintel will not be paid a commission
with respect to the initial {Confidential
portion omitted and filed separately with
the Commission} airtime load mentioned
herein;
b. USM will bear the cost associated with the
shipping of the phones as well as the
{Confidential portion omitted and filed
separately with the Commission} initial
airtime load mentioned herein;
c. USM will ship the prepaid cellular phone
within forty-eight (48) hours from the time
that it has been notified to do so by
Quintel. Quintel will provide USM with an
anticipated delivery schedule weekly, which
schedule shall detail the anticipated
prepaid phone deliveries for the following
two (2) week period;
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d. USM will provide and manage the "back end"
customer service function as well as its
telemarketing programs. USM will provide the
same product and service warranties to the
"free cellular phone" customers as those
supplied to other customers of USM and
otherwise required by law. USM will
indemnify Quintel against any claim made
against Quintel by a USM customer and hold
Quintel harmless from any liability, cost or
expense arising out of such product and
service warranties or the use of the
cellular telephone by such customer. The
foregoing indemnification does not cover
misrepresentations by Quintel, nor will it
extend to negligence or fraud on the part of
Quintel;
e. USM agrees to ship a maximum of
{Confidential portion omitted and filed
separately with the Commission} cellular
phones {Confidential portion omitted and
filed separately with the Commission} under
the "free cellular phone" program mentioned
in Paragraph 2 above. If the program is more
successful than originally anticipated, the
parties hereto agree that USM shall have the
option to ship more than {Confidential
portion omitted and filed separately with
the Commission} phones per month in USM's
sole and absolute discretion;
f. Sixty-one (61) days subsequent to the date
that a customer switches its long distance
service to the Quintel Affiliate, USM will
contact the customer in an attempt to
encourage the customer to pay a sum of money
to purchase the cellular phone rather than
waiting an additional four (4) months to
receive the "free cellular phone" pursuant
to the original offer. Providing that USM is
successful in encouraging the customer to
pay for the cellular phone, Quintel will not
be required to pay USM pursuant to paragraph
2(g) above. Notwithstanding the foregoing,
Quintel will continue to be entitled to the
commission referred to in Paragraph 2(g)
above;
g. Quintel will maintain script approval with
respect to outbound telemarketing efforts
and approval of all other media, print or
otherwise, with regard to paragraph 3(f)
above.
4. PRIVATE LABEL. The Parties hereto agree that the
commercials that are being aired will continue to be aired
under the Quintel Private label.
5. TERM. The term of this agreement shall be for a period of
one (1) year. USM and Quintel shall have the right to elect
two (2) one year renewal options in their discretion on the
terms and conditions contained herein. During the term of this
agreement, Quintel agrees to deliver all sales including all
customer leads to USM in conformance with the terms of this
Agreement. In markets where USM can not activate mobile
identification numbers, USM and Quintel agree that Quintel can
utilize
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provider for purposes of fulfilling the "free cellular phone"
program mentioned above.
6. REPRESENTATIONS AND WARRANTIES BY QUINTEL. To induce
USM to enter into this agreement, Quintel makes the
following representations and warranties:
a) Quintel has the power and authority to enter
into this Agreement and to perform all of
its duties and obligations hereunder;
b) The execution of this Agreement as well as
the full and complete performance by Quintel
of the provisions hereof will not violate or
result in any breach of, or constitute a
default under any agreement or other
instrument to which Quintel is a party, or
by which Quintel is bound.
7. REPRESENTATIONS AND WARRANTIES BY USM. To induce
Quintel to enter into this Agreement, USM makes the
following representations:
a) USM has the power and authority to enter
into this Agreement and to perform all of
its duties and obligations hereunder;
b) The execution of this Agreement as well as
the full and complete performance by USM of
the provisions hereof will not violate or
result in any breach of or constitute a
default under any agreement or other
instrument to which USM is a party, or by
which USM is bound.
8. THIRD PARTY BROKERAGE. The parties hereto hereby
represent and warrant to each other that neither USM
or Quintel have dealt with any broker or finder in
connection with the transactions which are the
subject of this Agreement, and each party hereby
agrees to indemnify, save harmless and defend the
other from and against all claims, losses,
liabilities and expenses, including reasonable
attorney's fees, arising out of any claims made by
any broker, finder, or other intermediary who claims
to have dealt with such party in connection with the
transaction which is the subject of this Agreement.
The provisions of this Section shall survive the
termination of this Agreement.
9. HEADINGS. The headings used in this Agreement are for
purposes of convenience only and shall not be used in
construing the provisions hereof.
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10. SEVERABILITY. The provisions of this Agreement shall
be deemed severable, and the invalidity or
unenforceability of any one or more of the provisions
hereof shall not affect the validity or
enforceability of the other provisions hereof.
11. ENTIRE AGREEMENT. This document represents the entire
agreement between the parties with respect to the
subject matter hereof, and supersedes any and all
prior agreements, representations and covenants, oral
or written.
12. MODIFICATIONS. This Agreement may not be modified
except by the written agreement signed by both of the
parties hereto.
13. NOTICES. Notices given pursuant to this Agreement
shall be in writing, shall be given by actual
delivery or by mailing the same to the party entitled
thereto, at the addresses set forth below or at such
other address as any party may designate in writing
to any other party pursuant to the provisions of this
Section. Notices given by mail shall be sent by
United States mail, certified or registered, return
receipt requested. Except as otherwise provided
herein, notices shall be deemed to be received on the
date of actual receipt, in the case of personal
deliver, or on the date of mailing in the case of
mailing. Notices shall be served or mailed to the
following addresses, subject to the changes provided
above:
If to USM: U.S. Mobile Services, Inc.
10810 Guilford Road
Annapolis Junction, Maryland 20701
Attention: Brian A. McCormick
If to Quintel: Quintel Communications, Inc.
One Blue Hill Plaza, 5th Floor
P.O. Box 1665
Pearl River, NY 10965
Attention:
14. MISCELLANEOUS.
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a). This Agreement shall be governed by and
construed in accordance with the laws of the
State of Maryland;
b). Neither party shall be permitted to assign
its rights and/or delegate its duties under
this Agreement without the written consent
of the other, which consent shall not be
unreasonably withheld;
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c). This Agreement may be executed in several
counterparts and all counterparts so
executed shall constitute one Agreement
binding on all of the parties hereto,
notwithstanding that all of the parties are
not a signatory to the original or the same
counterpart.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
U.S. MOBILE SERVICES, INC. (USM)
By: /s/ Brian A. McCormick
---------------------------------
Brian A. McCormick
Chairman & CEO
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QUINTEL COMMUNICATIONS, INC. (Quintel)
By: /s/ Gary Salmirs
---------------------------------
Title: Vice President
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EXHIBIT 10.26.1
SETTLEMENT AND RELEASE RESPECTING
ALLEGED IMPROPER ADJUSTMENTS FOR CALLS PRIOR
TO DECEMBER 31, 1997
WHEREAS, New Lauderdale, a corporation organized under the laws of the State of
Delaware ("RELEASOR") and having offices at One Blue Hill Plaza, Pearl River, NY
10965 and West Interactive Corporation, a corporation organized under the laws
of the State of Delaware and having offices at 9223 Bedford Avenue, Omaha, NE
68134 ("RELEASEE"; collectively with the RELEASOR, the "PARTIES") are parties to
that certain Servicing Agreement (the "SA") under which RELEASEE contracts with
{Confidential portion omitted and filed separately with the Commission} to
perform certain billing services (the "Billing Services") for RELEASOR in
connection with calls made to RELEASOR's 900 pay-per-call programs ("RELEASOR's
900 Programs");
WHEREAS, in connection with the Billing Services, RELEASOR has made certain
inquiries respecting the duplication of certain adjustments made by
{Confidential portion omitted and filed separately with the Commission} for
uncollectible amounts;
WHEREAS, RELEASEE has investigated the items;
WHEREAS, the PARTIES wish to fully, finally and forever settle all disputes
respecting the investigation of duplicate adjustments for uncollectible amounts;
NOW THEREFORE, in consideration of the foregoing recitals and of the terms and
conditions set forth herein, the PARTIES hereby agree as follows:
1. RELEASOR, in consideration of the sum of $455,804.31 from RELEASEE, the
receipt of which is hereby acknowledged, releases and discharges
RELEASEE and each of its past, present and future investors,
subsidiaries, affiliates, officers, directors, employees, agents,
stockholders, partners, underwriters, successors and assigns
(collectively with RELEASEE, "RELEASEES"), from all manner of actions,
causes of action, suits, debts, dues, sums of money, accounts,
reckoning, bonds, bills, specialties, controversies, agreements,
promises, variances, trespasses, damages, judgment, extents,
executions, claims and demands whatsoever, in law, in admiralry, or in
equity which RELEASOR and RELEASOR's heirs, executors, administrators,
successors and assigns ever had, now have, or which they hereafter can,
shall or may have from the beginning of the world to the end of the
world, against RELEASEES, arising out of or relating to all alleged
duplicate adjustments for calls placed to RELEASOR's 900 Programs prior
to December 31, 1997.
2. The payment of $455,804.31 by RELEASEE is contingent upon the execution
of this Settlement and Release.
3. It is understood and agreed that this Settlement and Release is a
compromise of a claim, and that the consideration recited herein is not
an admission of liability on the part of any PARTY.
4. The PARTIES further agree to: (a) restrict disclosure, to the extent
permitted by law, of the existence and terms of this Settlement and
Release solely to those of its employees, attorneys and financial
advisors with a need to know and not disclose the existence or terms of
this Settlement and Release to others; and (b) advise employees,
attorneys and financial advisors who receive notice of the existence
and terms of this Settlement and Release of the obligation of
confidentiality
5. This Settlement and Release contains the entire agreement between the
PARTIES relating to the matters referenced herein. However, neither the
terms of this Settlement and Release nor any matters referenced in this
Settlement and Release shall be construed to affect or vary any
contract between RELEASOR and RELEASEE, including but not limited to
the SA, which shall remain in full force and effect.
6. This Settlement and Release may not be changed orally.
7. This agreement shall be construed in accordance with and governed by
the local laws of the State of Nebraska.
8. The undersigned hereby state that they are authorized to sign this
Settlement and Release on behalf of the designated PARTY.
IN WITNESS HEREOF, RELEASOR AND RELEASEE have executed this Settlement and
Release on the 3 day of November 1998.
New Lauderdale
By: /s/Andrew Stollman
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Andrew Stollman
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Typed or Printed Name
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Executive Vice President
Title
West Interactive Corporation
By: /s/Steven M. Stangl
------------------------
EVP 11/24/98
----------------------------
Steven M. Stangl
Executive Vice President
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EXHIBIT 10.26.2
SETTLEMENT AND RELEASE RESPECTING
ALLEGED IMPROPER ADJUSTMENTS FOR CALLS PRIOR
TO DECEMBER 31, 1997
WHEREAS, Calling Card Company, a corporation organized under the laws of the
State of Delaware ("RELEASOR") and having offices at One Blue Hill Plaza, Pearl
River, NY 10965 and West Interactive Corporation, a corporation organized under
the laws of the State of Delaware and having offices at 9223 Bedford Avenue,
Omaha, NE 68134 ("RELEASEE"; collectively with the RELEASOR, the "PARTIES") are
parties to that certain Servicing Agreement (the "SA") under which {Confidential
portion omitted and filed separately with the Commission} to perform certain
billing services (the "Billing Services") for RELEASOR in connection with calls
made to RELEASOR's 900 pay-per-call programs ("RELEASOR's 900 Programs");
WHEREAS, in connection with the Billing Services, RELEASOR has made certain
inquiries respecting the duplication of certain adjustments made by
{Confidential portion omitted and filed separately with the Commission} for
uncollectible amounts;
WHEREAS, RELEASEE has investigated the items;
WHEREAS, the PARTIES wish to fully, finally and forever settle all disputes
respecting the investigation of duplicate adjustments for uncollectible amounts;
NOW THEREFORE, in consideration of the foregoing recitals and of the terms and
conditions set forth herein, the PARTIES hereby agree as follows:
1. RELEASOR, in consideration of the sum of $239,543.53 from
RELEASEE, the receipt of which is hereby acknowledged,
releases and discharges RELEASEE and each of its past, present
and future investors, subsidiaries, affiliates, officers,
directors, employees, agents, stockholders, partners,
underwriters, successors and assigns (collectively with
RELEASEE, "RELEASEES"), from all manner of actions, causes of
action, suits, debts, dues, sums of money, accounts,
reckoning, bonds, bills, specialties, controversies,
agreements, promises, variances, trespasses, damages,
judgment, extents, executions, claims and demands whatsoever,
in law, in admiralry, or in equity which RELEASOR and
RELEASOR's heirs, executors, administrators, successors and
assigns ever had, now have, or which they hereafter can, shall
or may have from the beginning of the world to the end of the
world, against RELEASEES, arising out of or relating to all
alleged duplicate adjustments for calls placed to RELEASOR's
900 Programs prior to December 31, 1997.
2. The payment of $239,543.53 by RELEASEE is contingent upon the
execution of this Settlement and Release.
3. It is understood and agreed that this Settlement and Release
is a compromise of a claim, and that the consideration recited
herein is not an admission of liability on the part of any
PARTY.
4. The PARTIES further agree to: (a) restrict disclosure, to the
extent permitted by law, of the existence and terms of this
Settlement and Release solely to those of its employees,
attorneys and financial advisors with a need to know and not
disclose the existence or terms of this Settlement and Release
to others; and (b) advise employees, attorneys and financial
advisors who receive notice of the existence and terms of this
Settlement and Release of the obligation of confidentiality.
5. This Settlement and Release contains the entire agreement
between the PARTIES relating to the matters referenced herein.
However, neither the terms of this Settlement and Release nor
any matter referenced in this Settlement and Release shall be
construed to affect or vary any contract between RELEASOR and
RELEASEE, including but not limited to the SA, which shall
remain in full force and effect.
6. This Settlement and Release may not be changed orally.
7. This agreement shall be construed in accordance with and
governed by the local laws of the State of Nebraska.
8. The undersigned hereby state that they are authorized to sign
this Settlement and Release on behalf of the designated PARTY.
IN WITNESS HEREOF, RELEASOR AND RELEASEE have executed this Settlement and
Release on the 3 day of November 1998.
Calling Card Company
By: /s/ Andrew Stollman
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Andrew Stollman
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Typed or Printed Name
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Executive Vice President
Title
West Interactive Corporation
By: /s/ Steven M. Stangl
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EVP 11/24/98
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Steven M. Stangl
Executive Vice President
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EXHIBIT 10.27
AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of this 4th day of May,
1998 by and between Access Resource Services, Inc., a Delaware corporation
("ARS") and Quintel Entertainment, Inc., a Delaware corporation ("Quintel").
WITNESSETH:
WHEREAS, ARS has purchased commercial advertising time on three
syndicated daytime television talk shows entitled "The Sally Jesse Raphael
Show", "The Ricki Lake Show", and "The Montel Williams Show", (collectively, the
"Programs").
WHEREAS, ARS has the ability to include certain designated 800
telephone numbers in the advertising it has purchased on the Programs.
WHEREAS, Quintel periodically purchases commercial advertising time on
various other television programs and has the ability to designate 900 telephone
numbers in such advertising.
WHEREAS, ARS and Quintel wish to exchange the ability to designate
certain 800 and 900 telephone numbers in their respective media advertising.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, ARS and Quintel hereby
agree as follows:
1. ASSIGNMENT OF TELEPHONE NUMBERS BY ARS. ARS hereby agrees that, for
the period beginning on the date hereof and ending on July ___, 1998, ARS will
include 800 telephone numbers designated solely and exclusively by Quintel (the
"Quintel Numbers") in all ARS advertising on the Programs. (The aggregate cost
to ARS of all commercials including Quintel Numbers run on each Program is
hereinafter referred to as the "ARS Cost"). All costs related to the Quintel
Numbers shall be borne solely and exclusively by Quintel. Notwithstanding the
foregoing, ARS will not be obligated to included the Quintel Numbers in
advertising on the Programs which: (i) has previously been sold in connection
with a related sale of advertising time on "The Maury Povich Show"; or (ii) has
been allocated to the syndication of the Programs.
2. PURCHASE OF MEDIA TIME AND TRANSFER OF 900 MINUTES BY QUINTEL.
(a) In consideration for ARS, agreement to assign certain
Quintel Numbers to advertising on the Programs, Quintel hereby agrees to obtain
for ARS, at Quintel's sole cost and expense, 900 telephone number billable
minutes (the "900 Minutes"), from the following sources (the "900 Minutes
Sources"), in the following priorities: service bureaus handling 800 or 900
telephone number traffic; telemarketing companies; and live psychic operators.
Quintel shall instruct the 900 Minutes Sources to utilize 900 telephone numbers
designated by ARS in such sources' advertising during the term hereof.
(b) {Confidential portion omitted and filed separately with
the Commission}
(c) ARS will be responsible for all 900 costs, including, but
not limited to, transport, billing and collection, redirect, psychic fees and
chargebacks.
(d) The respective number of minutes allocated by ARS to
Quintel and by Quintel to ARS shall be monitored on a weekly basis during the
term hereof. To the extent that the number of minutes allocated to each party by
the other during any weekly period is unequal, an appropriate adjustment shall
be made during the following week to cause such minutes, to the greatest extent
possible, to be equal during the term hereof.
3. FURTHER ASSURANCES. ARS and Quintel hereby agree to execute,
acknowledge, obtain and deliver all such further acts, assignments, conveyances,
consents, and assurances as may reasonably be required for the consummation of
the transactions contemplated by this Agreement.
4. INTERPRETATION. This Agreement and each provision hereof shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision hereof shall be prohibited by or invalid under such law,
then such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
5. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any and all agreements, whether oral or
written, between the parties with respect to its subject matter. If an action is
brought by either party hereto for breach or default of any provision of this
Agreement, the prevailing party in such action shall be awarded reasonable
attorney's fees and costs in addition to any other relief to which the party may
be entitled.
6. MODIFICATION. This Agreement may not be altered or amended except by
written agreement duly executed by all parties hereto.
7. SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
8. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and such counterparts
shall together constitute but one and the same agreement, binding upon all the
parties hereto, notwithstanding that all the parties are not signatories to the
original of the same counterpart.
9. HEADINGS. The headings and labels of the paragraphs of this
Agreement are inserted solely for the convenience of reference, and in no way
define, limit, extend or aid in the construction of the scope, extent or intent
of this Agreement or of any term or provision hereof.
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10. WAIVER. The failure of any party to enforce at any time the
provisions of this Agreement shall not be construed as a waiver of any provision
or of the right of such party thereafter to enforce each and every provision of
this Agreement.
11. TIME IS OF THE ESSENCE. Time is of the essence in the performance
of this Agreement.
12. NO THIRD PARTY BENEFICIARIES. The parties acknowledge and agree
that this Agreement creates no rights for or in favor of any person or third
party not a party to this Agreement, and that no such person may place any
reliance hereon.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
WITNESS/ATTEST: ACCESS RESOURCE SERVICES, INC.
BY:
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ITS:
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WITNESS/ATTEST: ACCESS RESOURCE SERVICES, INC.
BY: /s/Jeffrey Schwartz
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ITS: Chairman
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EXHIBIT 10.28
US/INTELICOM INC.
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT, made and entered into as of the seventh day of April,
1998, by and between US/INTELICOM, Inc. (hereinafter referred to as
"US/INTELICOM") and Quintel Cellular, LLC (hereinafter referred to as the
"Licensee").
RECITALS:
A. US/INTELICOM is engaged in developing and licensing application
software for cellular telephones to produce prepaid cellular telephones
(hereinafter referred to as the "Phone" or "Phones"), as well as the development
of programs, systems and services intended to support such prepaid cellular
telephones (hereinafter referred to as the "Business").
B. US/INTELICOM has the exclusive right, title and interest in and to
said application software for prepaid cellular telephones (hereinafter referred
to as the "Software").
C. US/INTELICOM has agreed with Licensee to provide the Software to
Licensee for installation of the Software on the Phones and to sell, lease and
distribute the Phones to Licensee's customers, subject to the terms and
conditions of this Agreement.
D. The Licensee is engaged in the marketing, sale, lease and
distribution of prepaid cellular telephones.
E. The Licensee desires to sell and market Phones installed with the
Software, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt, sufficiency
and adequacy of which the parties conclusively acknowledge, the parties agree as
follows:
1. Grant of License.
US/INTELICOM hereby grants to Licensee, a limited, worldwide,
nontransferable, nonexclusive, conditional right and license to use the Software
solely with the Phones and to reproduce the Software in connection with such
use, and Licensee hereby accepts said right, license and privilege, in
accordance with the terms of this Agreement. US/INTELICOM agrees to provide the
Software in executable form and any specifications and instructions required to
install the Software on the Phones to enable Licensee to sell, lease and
distribute prepaid cellular telephones to Licensee's customers, which customers
shall have the perpetual right to use the software in connection with their use
of their Phones.
Page 1 of 15 Confidential
2. Term of License.
The term of this license shall be for an initial period of
forty-eight (48) months ("initial term"), commencing on the date of execution of
this Agreement. This license shall thereafter automatically renew on the
anniversary of this execution date for additional terms of twelve (12) months
("subsequent terms"), unless Licensee sends written notification to US/INTELICOM
of Licensee's intention not to renew. Such notification must be received by
US/INTELICOM not less than ninety (90) days preceding the automatic annual
renewal.
3. Fees.
As consideration for the rights granted and services provided
hereunder, Licensee shall remit fees to US/INTELICOM according to the fee
schedule and conditions described in the attached Addendum A, which is hereby
included within and made an integral part of this agreement. All fees,
reimbursements, and other financial figures referenced in this Agreement are
expressed in United States dollars.
(a) The fee amounts described in Schedule A shall remain
constant throughout the initial term of this
Agreement.
(b) These fees shall be subject to a modification during
each subsequent term. At each subsequent renewal of
this Agreement, the fee amounts shall be modified by
the change in the Consumer Price Index (CPI) over the
preceding calendar year (the "preceding year"). This
change shall not exceed five percent (5%) for any
year. Should Licensee have sold or leased a minimum
of two hundred thousand (200,000) Phones containing
the Software during a "preceding year", the fee
modification for the ensuing subsequent term will be
permanently waived.
4. Use of License.
During the term of this Agreement, Licensee covenants and
agrees to:
(a) use the Software only for the Phones covered under
the terms of this License;
(b) adhere precisely to any instructions and policies
furnished by US/INTELICOM regarding the use of the
Software, which instructions and policies may be
updated by US/INTELICOM from time to time consistent
with the terms of this License;
(c) comply with all applicable local and federal laws and
regulations governing Licensee's use, sale or rental
of the Software with respect
Page 2 of 15 Confidential
to the Phones;
(d) inform US/INTELICOM immediately if any third party
claims any infringement on any of US/INTELICOM's
proprietary rights or interest by the use of the
Software; and
(e) refrain from modifying, translating, reproducing,
reverse engineering, disseminating, distributing or
determining the source code of the Software or any
enhancements or modifications thereto except as
provided in this Agreement. However, Licensee shall
be permitted to disseminate and distribute the
Software to its agents, employees and independent
contractors solely in connection with the sale and/or
lease of the Phones by Licensee.
5. Assignment.
Licensee's rights and interest under this Agreement shall not
be subject to assignment or transfer in any manner whatsoever without the prior
express written consent of US/INTELICOM, which shall not be unreasonably
withheld, and which consent shall be granted if the within license is conveyed
in connection with Licensee's sale of substantially all of its assets. If
Licensee is a corporation, partnership or limited liability company, the
transfer (in one or more transactions) of equity interests in Licensee which
possess a majority of the voting power in Licensee shall not constitute an
assignment for the purposes of this Agreement.
6. Representations and Warranties.
(a) Licensee warrants, represents and agrees that:
(i) it has the authority to enter into and to
consummate the transactions contemplated
hereby, and the Licensee is not under any
restriction or obligation which will impair
its full performance under this Agreement;
(ii) neither the execution of this Agreement nor
the performance of the obligations of the
Licensee require the consent, waiver or
approval of any party, or create a breach
of, violate or conflict with any contract,
agreement or other instrument or any
judgement or order to which the Licensee is
a party or otherwise subject; and
(iii) this Agreement, when duly executed, will
constitute the legal, valid and binding
obligation of the Licensee in accordance
with the terms of this Agreement.
Page 3 of 15 Confidential
(b) US/INTELICOM warrants, represents and agrees that:
(i) the Software, all upgrades and versions now
existing or hereafter developed and all
rights thereto are owned by US/INTELICOM and
are free and clear of any and all security
interests and other liens and encumbrances;
(ii) it has the authority to enter into and to
consummate the transactions contemplated
hereby, and US/INTELICOM is not under any
restriction or obligation which will impair
its full performance under this Agreement;
(iii) the Software and its use by Licensee
pursuant to this Agreement do not violate
the copyright, patent, trade secret or other
proprietary rights of any third party;
(iv) neither the execution of this Agreement nor
the performance of the obligations of
US/INTELICOM require the consent, waiver or
approval of any party, or create a breach
of, violate or conflict with any contract,
agreement or other instrument or any
judgment or order to which US/INTELICOM is a
party or otherwise subject; and
(v) this Agreement, when duly executed, will
constitute the legal, valid and binding
obligation of US/INTELICOM in accordance
with the terms of this Agreement.
(c) In addition, US/INTELICOM warrants that the Software
is free of defects in material and workmanship and
the Software will operate correctly and for the
purpose intended on the Phones for a period of twelve
(12) months of normal use from the date of delivery
to Licensee's customers of the Software on any Phone.
EXCEPT FOR THE FOREGOING, THE SOFTWARE IS PROVIDED
"AS IS" WITHOUT WARRANTY BY US/INTELICOM, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7. Termination.
(a) US/INTELICOM shall have the right to terminate this
Agreement immediately upon written notice to Licensee
in the event of any one or more of the following:
(i) Licensee does not sell or lease a minimum of
five thousand
Page 4 of 15 Confidential
(5,000) Phones containing the Software in
any twelve (12) month period following the
sale or lease of the 100,000 Phones
containing the Software as described in
Addendum B, Prepayment of License Fees.
(ii) the breach by Licensee of any other term,
covenant or condition of this Agreement in
the event that Licensee fails to cure such
breach within (30) days after receipt of
written notice from US/INTELICOM specifying
such breach; or
(iii) If there is a final adjudication that
Licensee has materially failed to comply
with any statute, requirement, rule,
regulation, order or decree, of any federal,
state, municipal or other governmental
authority relating to the marketing, sale or
lease of prepaid cellular telephones.
(b) Upon any termination of this Agreement or the expiry
of the term of this Agreement, Licensee shall
immediately cease to use any and all versions,
components and aspects of the Software, and shall
immediately return to US/INTELICOM all tangible and
electronic representations or reproductions in
Licensee's possession or which Licensee has received
or acquired, provided, however, that Licensee shall
be permitted to (1) sell any Phones in its possession
or on order based on Purchase Orders issued at the
time of such termination, unless such sale would
violate any applicable law, regulation or court order
and (2) provide continued support of Phones
previously sold by Licensee under this Agreement.
(c) In the event of termination hereunder, any unused
portion of the Prepayment of License Fees described
in Addendum B shall be payable to Licensee. In such
event, the parties shall retain all such rights and
remedies as provided by law.
8. Relationship of Parties and Indemnification.
(a) Licensee is not, and shall not represent or hold
itself out as, an agent, legal representative, joint
venturer, partner, employee or servant of
US/INTELICOM for any purpose whatsoever. Licensee is
an independent contractor and is not authorized to
make any contract, agreement, commitment, warranty or
representation on behalf of US/INTELICOM, or to
create any obligation, express or implied, on behalf
of US/INTELICOM. Licensee hereby agrees to indemnify
and hold harmless US/INTELICOM from and
against any loss, claims, demands, actions, causes of
action, costs and expenses, including without
limitation all reasonable attorney's fees, expenses
of
Page 5 of 1 Confidential
litigation, court costs and damages, arising from
or incurred in connection with either a breach by
Licensee of any term, condition, warranty, or
covenant set forth in this Agreement or the
performance, or failure to perform, services to any
customer of Licensee or US/INTELICOM, or the
collection of fees for services rendered by Licensee.
(b) US/INTELICOM hereby agrees to indemnify and hold
harmless Licensee from and against any loss, costs,
claims or judgments, including without limitation
attorney's fees and costs, incurred by Licensee as a
result of any third party claiming infringement on
the Software, or US/INTELICOM's breach of the License
or express warranty.
(c) Additional Terms and Conditions
US/INTELICOM and Licensee agree to the terms and
conditions, if any, described in the attached
Addendum B, which is hereby included within and made
an integral part of this agreement.
9. Covenants Against Disclosure of Trade Secrets and Confidential
Information.
(a) Licensee and US/INTELICOM acknowledge that in the
course of this license, they will become acquainted
with each other's proprietary and confidential
information concerning the Software and the Business,
including "Trade Secrets" and "Confidential
Information", as defined below. Both parties further
acknowledge that they each expend substantial
resources in time and money in the development of
their software, marketing, sales strategies,
programs, and in developing relationships with
customers.
(b) As used herein, the term "Trade Secrets" shall mean
any and all information of either party, including
without limitation, the Software, and other technical
and non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans,
product plans, or lists of actual or potential
customers or suppliers, which (i) derive economic
value, actual or potential, from not being generally
known to, and not being readily ascertainable by
proper means by, other persons who can obtain
economic value from their disclosure or use; and (ii)
are the subject of efforts that are reasonable under
the circumstances to maintain their secrecy. "Trade
Secrets" excludes however, information in the public
domain or readily ascertainable from third parties.
Page 6 of 15 Confidential
(c) As used herein, the term "Confidential Information"
shall mean proprietary and confidential information
or data, other than Trade Secrets, which is valuable
to, and related to the Software and the Business and
the details of which are generally unknown to the
competitors of either party. Confidential Information
shall include the following information, without
limitation, to the extent such information is not
already included in the definition of Trade Secrets
either at the time of the execution of this Agreement
or any time thereafter: (i) confidential financial,
business, marketing programs, strategies, and
services of either party; and (ii) such other
materials and items as the parties may designate,
mark or otherwise identify as confidential from time
to time. Any such information shall cease to be
Confidential Information for the purposes of this
Agreement at such time as that specific information
becomes generally known to the public unless such
disclosure is in violation of this Agreement or
another agreement of a similar purpose between
US/INTELICOM or Licensee and any third party.
(d) Licensee and US/INTELICOM hereby covenant and agree
that they shall not at any time, directly or
indirectly, misappropriate, take, use, divulge or
disclose any of the Trade Secrets of the other party
to any person, company, firm or entity for so long as
an item which is a Trade Secret remains a trade
secret under applicable law.
(e) Licensee and US/INTELICOM hereby covenant and agree
that during the tem of this Agreement and for a
period of thirty-six (36) months after the
termination of this engagement for any reason, they
shall not misappropriate, take, use, divulge or
disclose any of the Confidential Information of the
other party.
(f) Licensee and US/INTELICOM further covenant and agree
that all the Trade Secrets and Confidential
Information owned by each party shall remain the
property of that party and that, upon any termination
of this Agreement for any reason, each party shall
immediately return to the other party any tangible or
electronic representations or reproductions of any
Trade Secret or Confidential Information in their
possession or which they have received or acquired.
(g) Licensee and US/INTELICOM acknowledge the
confidential status of the Trade Secrets and the
Confidential Information.
11. Enforcement.
(a) Licensee and US/INTELICOM acknowledge and agree that
(i) the foregoing covenants set forth in Section 10
above are an essential part
Page 7 of 15 Confidential
of this Agreement; (ii) the terms of the covenants
are reasonable; (iii) any breach of a covenant would
result in immediate and irreparable harm to the other
party; and (iv) such damages would be difficult to
ascertain and would not be entirely measurable in
money damages. Therefore, Licensee and US/INTELICOM
agree that, in the event of a breach or threatened
breach of a covenant, either party shall be entitled
to an injunction or other equitable relief to
restrain any breach or threatened breach of a
covenant, in addition to the right of either party to
an award of damages or other relief that the parties
may have under the law, including without limitation
reasonable attorney's fees and expenses incurred by
the other party in enforcing any claim hereunder,
regardless of any claim that either party may have or
assert against the other party.
(b) Licensee and US/INTELICOM agree that the covenants
and agreements contained in this Agreement are
separate, severable and independent of each other, as
each term and condition is based on viable and
independent consideration and is of great importance
to each party and should be enforceable as if each
were made the subject of a separate agreement between
US/INTELICOM and Licensee. Therefore, should any
court of competent jurisdiction declare any covenant
or provision of this Agreement invalid or
unenforceable for any reason, the remaining covenant
and other terms this Agreement shall continue in full
force and effect as if this Agreement had been
executed initially without the covenant or provision.
12. Force Majeure.
If the performance of all or any part of this Agreement by
US/INTELICOM or the Licensee is prevented or delayed by acts of civil or
military authority, flood, fire, epidemic, war or riot, which cannot be averted
or overcome by diligence (hereinafter referred to as a "Force Majeure Event"),
the party affected shall be excused from such performance, to the extent that
party is necessarily prevented or delayed thereby, only during the continuance
of any such Force Majeure Event; provided, however, that if such delay in
performance extends for more than thirty (30) days, the other party, at its
discretion, upon giving written notice, may terminate this Agreement.
13. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties and their respective
successors and assigns.
(b) This Agreement constitutes the entire agreement and
understanding of the parties with respect to the
subject matter of this Agreement. No revision,
modification or change in this Agreement whatsoever
Page 8 of 15 Confidential
shall be claimed or become valid unless the same is
in writing and executed by the parties.
(c) The failure of a party to insist, in one or more
instances, on the performance by the other in strict
compliance with the terms and conditions of this
Agreement, shall not be deemed to be a waiver or
relinquishment of any right granted hereunder or of
any term or condition of this Agreement unless such
waiver is in writing and executed by the parties.
(d) Any notice or other communication required or
permitted hereunder shall be in writing and delivered
personally or by registered mail, return receipt
requested, with sufficient postage, to the best
available address of the party to be notified, and
shall be deemed to be effective on the earlier of
actual receipt of four (4) days after postmarking by
the U.S. Postal Service.
(e) The obligations of the parties created by the
provisions of this Agreement shall survive any
termination of this Agreement.
(f) The headings or captions used in this Agreement are
inserted for convenience or reference purposes only
and shall neither constitute a part hereof nor effect
the interpretation of any provision of this
Agreement.
(g) This Agreement is for the benefit of only the parties
hereto and no person, firm or entity that is not a
party to this Agreement shall have any rights or
claims under or by virtue of this Agreement.
(h) As used herein, the singular shall include the plural
and the neuter gender shall include the masculine or
the feminine as the context requires.
(i) In the event of adjudication, this Agreement shall be
governed by the laws of the State of the Plaintiff.
Page 9 of 15 Confidential
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, on the date first set forth above.
US/INTELICOM Licensee
by: /s/ Michael A. Sauter by:
------------------------------- ------------------------------
Michael A. Sauter
------------------------------- ------------------------------
Print Name Print Name
President
------------------------------- ------------------------------
Title Title
4-7-98
----------------------------------- ----------------------------------
Date Date
|
Page 10 of 15 Confidential
ADDENDUM A
FEES
SOFTWARE LICENSE FEE
Licensee agrees to pay to US/INTELICOM a software license fee of twelve ($12.00)
per Phone on which the Software is loaded, and sold or leased by Licensee.
PIN UPDATE FEE
The "PIN update" method of adding additional prepaid cellular airtime to a Phone
involves entering a unique 10 or 12 digit number directly into the Phone via the
keypad. Such PINs can be divided into two separate types:
a) Mass Production PINs - Licensee creates collections of PINs as
part of a mass PIN production process. As a rule, such PINs are
then packaged, distributed and sold via a variety of retail
channels.
b) On-demand PINs - Licensee creates individual PINs on an ad hoc
basis that are then supplied to the customer over the telephone.
Licensee may create and supply as many on-demand PINs as
indicated.
Licensee agrees to also pay to US/INTELICOM a fee of two dollars ($2.00) per PIN
code generated for use in adding additional units of airtime to Licensee's
Phones. Mass Production PINs are restricted to a maximum of 120 units each.
REAL TIME PREPAID FEE
The "Real Time PrePaid (RTPP)" method of adding additional prepaid cellular
airtime to a Phone does NOT require the use of a PIN code. Under this method,
the Phone will automatically place a call to Licensee's computer system and
request Licensee's permission to add a specified amount of airtime to the Phone.
Licensee's computer system will either approve or deny this request.
Licencee agrees to pay to US/INTELICOM an ongoing fee of two dollars ($2.00) per
Real Time PrePaid (RTPP) addition of units of airtime to Licensee's Phones.
PROMOTIONAL DISCOUNTS
US/INTELICOM agrees to offer a promotional discount of its fees for certain of
Licensee's Phones.
Page 11 of 15 Confidential
- To be eligible for this promotional discount, a Phone must "qualify" by
being sold or leased by Licensee to a customer directly acquired by
Licensee in the normal course of Licensee's telemarketing, direct
marketing and telesales business.
- Any Phone sold or leased by Licensee that uses a Mass Production PIN in
adding additional units or airtime usage will not qualify for
promotional discount.
- Promotional discounts shall be used to offset all license fees due
hereunder.
US/INTELICOM agrees to the following promotional discounts:
1. Nine dollars ($9.00) to be applied against its Software License
fee for each qualified Uniden PCD2000 and each qualified Kodenshi
T-100 Phone containing the Software sold or leased by Licensee.
2. Seven dollars ($7.00) to be applied against its Software License
fee for any other qualified prepaid Phone sold or leased by
Licensee.
3. Two dollars ($2.00) to be applied against each Real Time PrePaid
(RTPP) fee incurred by Licensee in adding additional airtime to
qualified Phones of Licensee.
4. Two dollars ($2.00) to be applied against each PIN Update fee
incurred by Licensee in adding additional airtime to qualified
Phones of Licensee via On-demand PINs.
Page 12 of 15 Confidential
ADDENDUM B
OTHER TERMS AND CONDITIONS
CONFIDENTIALITY
Licensee understands and agrees that the unauthorized disclosure of certain
details contained within this License Agreement could cause irreparable harm to
US/INTELICOM. Licensee therefore agrees to treat this License Agreement as
confidential and will not disclose any details of this License Agreement to any
third party without the expressed written permission of US/INTELICOM, except
that Licensee shall be free to make such disclosures as is necessary to fulfill
legal obligations.
SOFTWARE SOURCE NON-DISCLOSURE
Licensee and US/INTELICOM agree to treat as confidential and not disclose the
fact that Licensee is acquiring its prepaid Software from US/INTELICOM, except
that Licensee shall be free to make such disclosures as is necessary to fulfill
legal obligations. US/INTELICOM may, however, request from Licensee a disclosure
of relevant facts and opinions to specified individuals and/or organizations in
order to assist US/INTELICOM's sales and marketing efforts. Such a request for
disclosure may be declined by Licensee if it feels there is a reasonable chance
that such disclosure would have a materially negative impact on its own sales
and marketing effort. Unless specifically authorized in writing, Licensee agrees
not to use the US/INTELICOM name, logo or other identification of US/INTELICOM
in any of its sales, marketing, promotional, product, or technical information,
whether printed, verbal, or provided via any other media.
COMPUTING FACILITIES
US/INTELICOM agrees to install certain computer programs relating to the support
of its prepaid cellular Software onto computer systems by Licensee. Licensee
acknowledges that it has requested such programs be installed on Licensee's
computer systems, and Licensee agrees to bear all costs associated with
providing and maintaining these systems subject to Licensee's prior written
approval and authorization for such systems. Licensee agrees to provide
US/INTELICOM with continuous and appropriate Internet access to such systems for
billing, monitoring, updating, and other purposes. Licensee agrees to compensate
US/INTELICOM for any out-of-pocket expenses incurred in supporting Licensee's
systems, including any related travel and accommodation expenses.
PAYMENT TERMS
Licensee agrees to remit payment to US/INTELICOM for all fees and other charges
described
Page 13 of 15 Confidential
herein within fifteen (15) days following initial receipt of invoices detailing
such fees and other charges, subject to offsets for promotional discounts that
Licensee is entitled to receive hereunder.
PREPAYMENT OF LICENSE FEES
Licensee agrees to remit to US/INTELICOM a nonrefundable prepayment of Software
License fees within three (3) business days following the date of execution of
this Agreement. The amount of this prepayment is agreed to be three hundred
thousand dollars ($300,000.00), which sum shall offset and be applied against
any License fees, less any applicable promotional discounts, otherwise due from
Licensee hereunder.
PURCHASE OF CELLULAR TELEPHONES
In the event that Licensee enters into a business arrangement in which it
acquires the right to purchase cellular telephones and other cellular
accessories, US/INTELICOM shall have the right to acquire such equipment, either
directly or for another business entity not engaged in direct response
marketing, under the same pricing and terms as Licensee, subject to availability
and vendor approval. It is explicitly understood and agreed that the price for
such equipment will be the lowest price available under Licensee's arrangement
and will be net of any and all discounts, rebates and other incentives.
CONVERSIONS OF PREPAID SOFTWARE
In the event that Licensee shall request that US/INTELICOM convert its prepaid
cellular software so that the application can be made available on a specified
cellular phone, US/INTELICOM agrees to use its best reasonable efforts to effect
such a conversion in a mutually acceptable timeframe. Licensee understands and
agrees that US/INTELICOM shall have the right to reject a software conversion
request from Licensee in the event that US/INTELICOM determines that the
specified cellular phone does not adequately meet the minimum technical and
operational standards determined by US/INTELICOM. Licensee agrees to reimburse
US/INTELICOM for the actual cost of any such conversion request received from
Licensee, based upon a cost schedule approved by Licensee.
RESTRICTIVE COVENANT
US/INTELICOM agrees not to compete with Licensee by engaging in the sale of
prepaid cellular phones directly to end-user customers through direct response
marketing for as long as this Agreement is active.
Page 14 of 15 Confidential
MAINTENANCE AND SUPPORT
Licensee acknowledges and agrees that it is both desirable and necessary for
US/INTELICOM to provide ongoing professional services to Licensee for
installation assistance, operational support and continued maintenance of
software installed and running on computer hardware and cellular telephones
controlled and/or sold by Licensee.
US/INTELICOM agrees to provide reasonable support and maintenance services to
Licensee under a Full Time Equivalent ("FTE") arrangement. US/INTELICOM agrees
to initially provide Licensee with one (1) FTE of appropriate professional
services. A Full Time Equivalent is any combination of support and maintenance
time provided by Licensee by US/INTELICOM personnel. Any FTE is limited to one
hundred and sixty-seven (167) hours of professional time per month.
Licensee agrees to pay to US/INTELICOM a monthly fee of ten thousand dollars
($10,000.00) per FTE of maintenance and support (the "FTE fee"). Licensee also
agrees to reimburse US/INTELICOM for all out-of-pocket expenses incurred in
providing support and maintenance services.
This monthly maintenance and support arrangement will have an initial term of
six (6) months. The arrangement will then automatically renew for an additional
twelve (12) months at the above rates and conditions unless written notification
to US/INTELICOM of Licensee's intent to cancel the arrangement is received no
later than September 1, 1998. Unless Licensee elects to cancel this arrangement
at the end of the first six months, the "initial term" of the arrangement will
be through September 30, 1999.
Following the initial term, this arrangement will automatically renew for an
additional twelve (12) months ("subsequent renewals") beginning each September
1st (the "renewal date") unless written notification to US/INTELICOM of
Licensee's intent to cancel the arrangement is received no later than sixty (60)
days prior to the renewal date. Each subsequent renewal will include an annual
ten percent (10%) increase in the monthly FTE fee.
Licensee may elect to increase the number of FTEs available for the support and
maintenance of Licensee's business by sending a written request to US/INTELICOM.
US/INTELICOM agrees to utilize its best reasonable efforts to provide such
additional FTEs upon such terms as the parties agree at that time.
Page 15 of 15 Confidential
EXHIBIT 10.29.1
LICENSE AGREEMENT
LICENSE AGREEMENT (this "Agreement"), dated as of December 11,
1998 and effective as of August 28, 1999, by and between Quintelcomm, Inc., a
Delaware corporation ("Quintel" or "Licensee"), and {Confidential portion
omitted and filed separately with the Commission}. Licensee and Licensor are
sometimes referred to individually as a "Party" and collectively as the
"Parties".
RECITALS
WHEREAS, Licensor owns certain rights in the Licensed Property
(as defined below) and Licensee desires to obtain and use a license for the use
of the Licensed Property in the Territory (as defined below); and
WHEREAS, the businesses of each of the Licensor and Licensee
will benefit from the use of the license granted to Licensee pursuant to this
Agreement.
NOW THEREFORE, in consideration of the foregoing premises and
the representations, warranties, covenants and agreements contained herein,
intending to be legally bound hereby, the Parties agree as follows:
I. License.
a. Grant. Licensor hereby grants to Licensee and Licensee
accepts, a license to use the Licensed Property (the "License"), during the
period commencing on the date hereof and ending on December 31, 2047 (the
"Term") within the Territory. Such uses shall include, without limitation,
referencing any of the names, logos, or other items included within the Licensed
Property in connection with marketing, advertising, publicity, promotion and
sale of products for services by the Licensee or its Affiliates (as defined
below) for itself or as a marketing agent for other third parties (the "Covered
Products"). Nothing herein contained shall be construed as an assignment or
grant to Licensee of any right, title, or interest in or to the Licensed
Property. All rights relating to the Licensed Property, except for the License,
are reserved by Licensor.
i. For purposes of this Agreement, "Licensed
Property" means any of the following, whether presently existing or hereafter
created: (A) the marketing program developed by {Confidential portion omitted
and filed separately with the Commission} under the name "Fly Free America"(TM)
offering free airline travel in conjunction with hotel and other travel
arrangements (the "Free Travel Concept"), (B) the materials setting forth the
terms of the Travel Premium (as defined below) which incorporate the Trademark
(as defined below), as described in Section 3(a) (the "Fly Free Package"), (C)
the registered and unregistered trade names, trademarks, service marks,
copyrights, and rights under or related to copyrights of Licensor which relate
to the
1
business of the Licensor related to the Free Travel Concept and the Fly Free
Package listed on Schedule 1(a) hereto (the "Trademark"); and (F) all common law
and other rights to the Trademark which relate to the business of the Licensor
related to the Free Travel Concept and the Fly Free Package. In addition,
"Licensed Property" includes, without limitation, any derivations or variations
of any of the foregoing.
ii. For purposes of this Agreement "Affiliate" means,
with respect to any entity, (A) any entity directly or indirectly controlling,
controlled by or under common control with such entity, or (B) any executive
officer, director or member of such entity. For purposes of this definition, the
terms "controls", "is controlled by" or "is under common control with" shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a entity, whether through the
ownership of voting securities, by contract or otherwise.
b. Territory. For purposes of this Agreement, "Territory"
means the United States and Canada.
c. Exclusivity. Except as provided below, the License shall be
non-exclusive. For purposes of this Agreement, "Fiscal Period" means the twelve
month period from September 1 through August 31. The first Fiscal Period under
this Agreement shall be the twelve month period commencing on September 1, 1998
through August 31, 1999 (the "Initial Period").
i. Initial Period. During the Initial Period, the
Licensee shall have the exclusive right to use the Licensed Property in the
marketing, advertising, publicity, promotions and sale of Telecommunications
Products (as defined below) within the Territory (the "Exclusivity Right"). For
purposes hereof, "Telecommunications Products" means long distance
telecommunications service for purchasing such long distance service and
excludes all other telecommunications services and products, including without
limitation, local service, internet telephone service, voice mail, cellular
telephone service (both analog and digital) and calling cards for purchasing
such other products and services.
ii. Extended and Subsequent Periods. For purposes of
this Agreement, the "License Payment Formula" means the product of (1) the
difference between the Package Fee (as defined below) received by Licensor and
{Confidential portion omitted and filed separately with the Commission}, and (2)
the number of Fly Free Packages requested, received and paid for by Licensee.
The License Payment Formula shall be calculated separately for each applicable
Package Fee.
(a) If at the end of the Initial Period, the
License Fee together with the aggregate amount of the License Payment Formula
exceeds {Confidential portion omitted and filed separately with the Commission},
then the
2
Exclusivity Right shall be automatically extended for the immediately following
Fiscal Year (the "Extended Period").
(b) If the Exclusivity Right has been
extended through the Extended Period, then at the end of each subsequent Fiscal
Year, the Exclusivity Right shall be automatically extended for the immediately
following Fiscal Year (a "Subsequent Period") provided that the aggregate amount
of the License Payment Formula is not less than the aggregate amount of the
License Payment Formula for the immediately preceding Fiscal Year.
(c) For purposes of this Agreement,
"Exclusivity Period" means the Initial Period and, as extended, the Extended
Period and any Subsequent Period.
iii. Adjustments. In the event that the Exclusivity
Period is extended through the second anniversary of the date hereof, then the
Package Fee shall be adjusted proportionately with respect to any increase or
decrease of Licensee's pricing arrangements with providers of Telecommunications
Products; provided, however, in no event shall the Package Fee be less than
{Confidential portion omitted and filed separately with the Commission}.
2. Fees.
a. License Fee. On or prior to the execution of this
Agreement, Licensee shall pay to the Licensor an initial license fee of
{Confidential portion omitted and filed separately with the Commission} (the
"License Fee"). Licensor shall pay the License Fee as follows: (i) {Confidential
portion omitted and filed separately with the Commission} by check or wire
transfer of immediately available funds to an account or accounts designated by
the Licensor in a written notice delivered to Licensee, and (ii) {Confidential
portion omitted and filed separately with the Commission} (such amount, the
"Escrow Amount") by check or wire transfer of immediately available funds,
delivered to Swidler Berlin Shereff Friedman, LLP (the "Escrow Agent"). The
Escrow Amount is to be held in an escrow account (the "Escrow Account") in
accordance with the terms of an escrow agreement among Licensor, Licensee and
the Escrow Agent (the "Escrow Agreement") in the form attached hereto as Exhibit
A.
b. Package Fee. The Licensee shall pay to the Licensor the
following fees for each Fly Free Package requested by and provided to Licensee
throughout the Term (the "Package Fee"):
Aggregate Number of Fly Free Packages Price Per Fly Free Package
{Confidential portion omitted and filed separately with the Commission}
3
Licensee shall pay the Package Fee to Licensor within thirty (30) days after
delivery of the Fly Free Packages requested by Licensee from Licensor.
c. Sample Fee. From time to time, Licensee may request, and
Licensor shall provide to Licensee, Fly Free Packages which contain inactive
travel vouchers ("Sample Packages") for use by Licensee in marketing and
promoting the Free Travel Concept and the Fly Free Package. Licensee shall not
cause, assist, encourage, or permit any other party to cause, assist or
encourage the activation of the inactive travel vouchers contained within the
Sample Packages. In addition to the fees described above, Licensee shall pay
Licensor {Confidential portion omitted and filed separately with the Commission}
for each Sample Package provided to Licensee within thirty (30) days after
delivery of the Sample Packages requested by Licensee from Licensor.
d. Kiosk Fee. The Licensee shall pay Licensor a fee of
{Confidential portion omitted and filed separately with the Commission} for each
customer that has been pic'd and for which the service provider of
Telecommunications Products has compensated the Licensee.
3. Obligations of Licensor. Licensor shall be responsible for the
following:
a. Travel Premiums. For purposes of this Agreement, "Travel
Premiums" mean an offer of free airline travel with paid hotel and other travel
arrangements made to potential customers of Licensee for products or services as
an inducement to purchase or subscribe for a particular product or service.
Licensor shall furnish to the Licensee, for distribution to the recipients of
Travel Premiums, complete, ready to mail travel packages containing materials
setting forth the terms of the Travel Premium which incorporate the Trademark
(which travel packages are substantially similar to all other travel packages
provided by Licensor to its other customers at such time) and which travel
packages will be in a form ready for transmittal to the Travel Premium
customers. It is expressly acknowledged by the Parties that a substantial
portion of the total price of such travel packages are set annually by
participating hotels, who generally increase the cost each year, but it is
agreed that rate charged to customers of Licensee will not be greater than the
"rack rate."
b. Fly Free Packages. Upon reasonable request by Licensee in
writing, Licensor shall deliver requested Fly Free Packages and Sample Packages
to Licensee within ten (10) business days following such request.
c. Customer Service. In accordance with the terms and
conditions and general information sections of the Travel Premiums, Licensor
shall provide the following services to those customers who accept the Travel
Premium incorporated in a travel package and/or any upsell premium provided by
Licensor or {Confidential portion omitted and filed separately with the
Commission}:
4
i. making all necessary arrangements with the air,
hotel and other providers of travel accommodations and services constituting
part of a travel package offered as a Travel Premium;
ii. addressing any customer complaints or inquiries
regarding the arrangements constituting part of the Travel Premium, travel
package or such upsell premium.
4. Additional Agreements.
a. Continued Development. Licensee may, and Licensor agrees to
cooperate with Licensee to, develop new opportunities for the use of Travel
Premiums incorporating the Free Travel Concept and the Trademark in the
marketing of Telecommunications Products; provided, however, that any use of
such developments shall be subject to the prior written approval of Licensor
which shall not be unreasonably withheld or delayed.
b. Credit Card Transactions. The transactions described in
this paragraph are referred to as the "Credit Card Transactions." With the
approval of the issuing bank or credit card company, Licensor shall attempt to
arrange for Licensee to be granted the right to market credit cards ("Licensee
Credit Cards") to the extent Licensor or its Affiliates may have such rights.
Licensee shall market Licensee Credit Cards as an upsell premium (other than a
Travel Premium) as an inducement to purchase or subscribe for a
Telecommunication Product (a "Upsell Premium"), with the Travel Premium provided
by or developed with Licensor, or to the extent permitted, market the credit
card as a default choice in marketing Telecommunications Products, subject in
each instance to the consent of the issuing bank or credit card company.
i. Credit Card Fees. Licensor shall pay to Licensee
sixty percent (60%) of the fees which it received from the issuing bank or
credit card company with respect to each Activated Customer obtained by Licensee
pursuant to the terms contained in Section 4b (the "Credit Card Fee"). For
purposes of this Agreement, an "Activated Customer" means a customer who
activates a Licensee Credit Card and uses such card to make one purchase or such
other amount as required by the issuer of such credit card. Licensor shall pay
all Credit Card Fees to Licensee within thirty (30) days after the receipt by
Licensor of the applicable payment which the issuing bank or credit card company
is obligated to make to Licensor pursuant to the relevant credit card customer
acquisition programs.
5
c. Customer Databases. Licensor shall rent to the Licensee all
customer databases owned or controlled by Licensor (and Licensor shall use its
reasonable efforts to cause Triad's customer database to be rented to Licensee)
(the "Database") for Licensee's non-exclusive use in the marketing of
Telecommunications Products using the Licensed Property during the Term.
Licensor shall provide Licensee with regular updates of the Database from time
to time during the Term not less than monthly. The Database shall revert to the
exclusive control of the Licensor upon the expiration or earlier termination of
this Agreement. Nothing herein contained shall be construed as an assignment or
grant to Licensee of any right, title, or interest in or to the Database. All
rights relating to the Database are reserved by Licensor.
i. Database Fee. Licensor has provided access to the
Database to Licensee. From the date of this Agreement, Licensee shall pay a
monthly fee to Licensor of {Confidential portion omitted and filed separately
with the Commission} per each monthly update (the "Update") of {Confidential
portion omitted and filed separately with the Commission} customer names from
the Database (the "Database Fee"). The Database Fee shall be reduced by (A) then
applicable brokerage fee (which fee is currently {Confidential portion omitted
and filed separately with the Commission}, and (B) the product of {Confidential
portion omitted and filed separately with the Commission} and the number of
sales generated from customers listed in the Database that remain active
customer of the applicable provider of Telecommunications Products for more than
sixty (60) days and receive the Fly Free Package.
ii. Rights of Priority. Licensor shall not provide
the Update to any other marketer of Telecommunications Products, until the date
which is two (2) weeks after the delivery of the Update by Licensor to Licensee.
d. Customer Upsells. Any upsell premium provided by Licensor
or Triad to Licensee shall be on terms no less favorable than are offered by
Licensor or Triad, as the case may be, to any third party.
e. Licensor's Kiosks. Subject to the provisions of Section
2d., Licensor shall distribute promotional materials prepared by the Licensee
concerning the Licensee's Telecommunications Products using the Licensed
Property at any shopping mall kiosks operated by Licensor or its Affiliates. The
form and content of the materials would be determined by Licensee, subject to
Licensor's approval, which will not be unreasonably withheld or delayed.
5. Audit Rights. With respect to Licensee's transactions related to its
use of the License, Licensee shall, and with respect to Licensor's record of all
transactions related to the Credit Card Transactions, Licensor shall, maintain
full, true and accurate books and records, in accordance with generally accepted
accounting principles set forth in the opinions and pronouncements of the
Financial Accounting Standards Board which are applicable in the United States,
applied on a consistent basis to give a complete record
6
of all of such actions for the preceding three (3) Fiscal Years. Upon the
request of either party (the "Requesting Party"), the other party (the
"Producing Party") shall give access to the relevant books and records relating
to the use of the License and the Credit Card Transactions, as the case may be,
at reasonable times, during reasonable hours so long as the Requesting Party has
requested such access at least forty-eight (48) hours in advance; provided that
the Producing Party shall not be required to provide such access to the
Requesting Party more than once in any Fiscal Year. A representative of the
Requesting Party (including an independent certified public accountant retained
by the Requesting Party for the purpose of verifying the accuracy of the reports
supplied hereunder) shall have the right to inspect such books and records at
the offices of the Producing Party. The Requesting Party shall pay for the cost
of its representative; provided that if such inspection reveals that the
Producing Party has inaccurately stated amounts due hereunder, as the case may
be, in an average amount of five percent (5%) or more over a six (6) month, then
the Producing Party will pay or reimburse the Requesting Party for the entire
cost of such inspection. The Producing Party agrees to pay the balance of any
fee due together with the cost of the inspection, to the Requesting Party within
ten (10) days after receipt by the Producing Party of written notice from the
Requesting Party of any inaccurate statements.
6. Covenants.
a. Compliance with Laws. Each Party agrees to comply in all
material respects with the provisions of applicable law, including without
limitation, the notice provisions of the copyright and trademark law of the
United States. Each Party agrees to place appropriate notice of any applicable
trademark, service mark or copyright with respect to the Licensed Property.
Licensee shall submit to Licensor and its counsel a sample of all uses of the
Licensed Property for its approval to ensure compliance in all material respects
with the provisions of applicable law, prior to any such use of the Licensed
Property.
b. Ownership and Goodwill. Each Party recognizes the value of
the good will associated with the Licensed Property and acknowledges that all
rights based upon or derived from the Licensed Property, including all rights
therein and good will pertaining thereto, belong to Licensor, subject to the
License, and that the Licensed Property has a secondary meaning in the mind of
the public associated with Licensor and, as used subject to the License, with
Licensee. Each Party agrees that it will not, during the Term, do or permit to
be done any act that will invalidate, attack or affect in any manner whatsoever
Licensor's rights based upon or derived from the Licensed Property as well as
the goodwill associated therewith.
c. Quality. Each Party agrees that it shall use, and shall
authorize the use of, the Licensed Property, with such style, appearance and
quality as to be adequate and suited for exploitation to the best advantage and
to the protection and enhancement of the Licensed Property and the good will
pertaining thereto, and that such uses shall in
7
no manner reflect adversely upon the Licensed Property. Licensee shall submit to
Licensor a sample of all uses of the Licensed Property for its approval of the
design and quality of such use of the Licensed Property prior to any such use of
the Licensed Property. Such approval shall not be unreasonably withheld or
delayed, conditioned or delayed and shall be (i) deemed given, and the
submission of a sample shall not be required, if the uses of the Licensed
Property by the Licensee are the same as or substantially similar to uses
previously approved by the Licensor, or (ii) evidenced by written notice
executed by Licensor. Licensor's failure to approve or disapprove any such
sample by written notice within ten (10) business days of receipt of such sample
shall be deemed approval of such sample.
d. Advertising and Promotion. Each Party agrees that it shall
not engage, participate or otherwise become involved in any activity or course
of action including, without limitation, advertising and promotion, that
diminishes and/or tarnishes the image and/or reputation of the Licensed
Property.
e. Cooperation. Each Party agrees to cooperate with the other
in obtaining and enforcing copyright, service mark, trade name, trade dress and
trademark protection for the Licensed Property, including without limitation, in
connection with suits and claims for infringement of the Licensed Property.
f. Confidentiality. During the term of this Agreement, both
Parties may be exposed to certain information of the other Party which is the
confidential as well as other proprietary information and not generally known to
the public (herein "Confidential Information"). Both Parties will either mark
their materials as Confidential Information or notify the other Party, in
writing, that written or oral information is Confidential Information. Both
Parties agree that during and after the term of this Agreement they will not use
or disclose to any third party any of the other Party's Confidential Information
for purposes other than set forth in this Agreement without the prior written
consent of the other Party. Both Parties hereby consent to the disclosure of
their Confidential Information to the employees of the other Party as is
reasonably necessary in order to allow each Party to perform under this
Agreement and to obtain the benefits hereof, subject to obtaining written
confidentiality agreements from said employees, which are at least as protective
as this Agreement. This paragraph shall not apply to information after such
information is made generally known to the public through no breach of this
Agreement.
g. Non-Competition. Licensee agrees that during the Term and
for the twelve month period immediately following the date of expiration or
termination of this Agreement, Licensee shall not use Travel premiums
incorporating the Free Travel Concept, or a substantially similar travel offer,
in connection with marketing, advertising, publicity, promotion and sale of
products for services by the Licensee or its Affiliates for itself or as a
marketing agent for other third parties without the express written consent of
Licensor.
8
7. Protection of the Licensed Property.
a. Enforcement of Licensed Property Rights. Each Party agrees
to assist the other in protecting the intellectual property rights with respect
to the Licensed Property as follows:
i. Registration. Licensor shall seek to obtain and
maintain a registration from the United States Patent and Trademark Office, the
United States Register of Copyrights, or appropriate state agencies within the
United States with respect to uses of the Licensed Property by either the
Licensee or Licensor or any modifications thereto or derivations thereof (the
"Registrations") and shall renew all such registrations, as required, maintain
notices of allowance and otherwise take all appropriate action relating to the
Registrations, including, without limitation, the filing of Statements of Use,
Requests for Extensions of Time to File Statements of Use, Affidavits of Use and
Affidavits of Incontestability. Licensor shall bear the cost of obtaining and
maintaining such Registration.
ii. Infringement. Licensor may commence or prosecute
any claims or suits with respect to any infringements or possible infringement
of the Licensed Property in its own name. If Licensor elects to prosecute any
such claim or suit, Licensor shall bear all costs and expenses, including legal
fees, incurred in connection with any such suits and Licensee shall not
institute any suit or take any action on account of any infringements or
possible infringements of the Licensed Property without first notifying and
consulting with Licensor. If Licensor elects not to prosecute any such claim or
suit within ten (10) days after the receipt of written notice of Licensee
requesting it to do so, then Licensee shall have the right to prosecute any such
infringement or possible infringement. If Licensee elects to do so, costs and
expenses, including legal fees, incurred in connection with any such suits shall
be borne by Licensee (subject to Section 8, to the extent applicable). If either
Party institutes a suit for infringement pursuant to this Agreement, the other
Party shall have the right to participate and represent its interest through
other counsel of its own choosing and at its cost and expense, including legal
fees, incurred in connection with such participation.
iii. Remedies. In the event that either Party obtains
any recovery as a result of any claims or suits commenced, prosecuted or
settled, the allocation of such recovery (net of the cost and expenses,
including legal fees, reasonably incurred in connection with any such suit or
claim) shall be allocated as follows: (A) in the event that either Party bears
all costs and expenses, including legal fees, incurred in connection with any
such claims or suit, such Party shall receive one hundred percent (100%) of any
such recovery, or (B) in the event that the Licensor and Licensee each bear a
portion of the costs and expenses, including legal fees, incurred in connection
with any such claims or suits, then such recovery shall be allocated between the
Licensor and Licensee in proportion to costs and expenses so incurred; provided,
however, that in no event shall Licensor receive less than fifty percent (50%)
of any such recovery.
9
b. Notice of Infringement. Each Party agrees to notify the
other promptly in writing of any adverse use of the Licensed Property or other
designation similar to the Licensed Property of which such Party is or becomes
aware.
8. Indemnification, Insurance Coverage.
a. Indemnification; Insurance Coverage. Licensor shall
indemnify and hold harmless Licensee, its subsidiaries, sublicensees and their
respective officers, directors and employees from and against any and all
damages, costs and expenses (including reasonable attorney's fees) incurred by
any of them arising out of or in connection with (1) any breach by Licensor or
any of its officers, directors or employees (the "Licensor Affiliates") of the
representations and warranties in this Agreement, and (ii) any breach of any
covenant or agreement of the Licensor or the Licensor Affiliates with the
Licensee contained in this Agreement. The Parties acknowledge that Triad may be
sold, recapitalized, or enter into an extraordinary transaction, and upon the
consummation of any such transaction, all obligations of Triad, and of Licensor
with respect to Triad, shall be terminated without any liability to any Party
and all references to Triad in this Agreement shall be null and void.
b. Indemnification by Licensee. Licensee shall indemnify,
defend and hold harmless Licensor, its subsidiaries, sublicensees and their
respective officers, directors and employees from and against any and all
damages, costs and expenses (including reasonable attorney's fees) incurred by
any of them arising out of or in connection with (i) any breach by Licensee or
any of its officers, directors or employees (the "Licensee Affiliates") of the
representations and warranties in this Agreement, and (ii) any breach of any
covenant or agreement of the Licensee or the Licensee Affiliates with the
Licensor contained in this Agreement, and (iii) any claim or cause of action by
any third party arising out of or in connection with the sale or use of any
Covered Products, including by any customer of Licensee.
c. Indemnification Procedure. An indemnified party shall
provide written notice to each indemnifying party of any claim of such
indemnified party for indemnification under this Agreement promptly after the
date on which such indemnified party has actual knowledge of the existence of
such claim. Such notice shall specify the nature of such claim in reasonable
detail and the indemnifying parties shall be given reasonable access to any
documents or properties within the control of the indemnified party as may be
useful in the investigation of the basis for such claim. The failure to so
notify the indemnifying parties shall not constitute a waiver of such claim but
an indemnified party shall not be entitled to receive any indemnification with
respect to any losses that occurred directly as a result of the failure of such
indemnified party to give such notice.
10
i. In the event any indemnified party seeks
indemnification hereunder based upon a claim asserted by a third party, the
indemnifying parties shall have the right (without prejudice to the right of any
indemnified party to participate at its expense through counsel of its own
choosing) to defend or prosecute such claim at its expense and through counsel
of its own choosing if it gives written notice of its intention to do so no
later than twenty (20) days following notice thereof by an indemnified party or
such shorter time period as required so that the interests of the indemnified
party would not be materially prejudiced as a result of its failure to have
received such notice; provided, however, that, if the indemnified party shall
have reasonably concluded that separate counsel is required because a conflict
of interest would otherwise exist, the indemnified party shall have the right to
select separate counsel (but not more than one law firm together with local
counsel, if necessary) to participate in the defense of such action on its
behalf, at the expense of the indemnifying party. If the indemnifying party does
not so choose to defend or prosecute any such claim asserted by a third party
for which any indemnified party would be entitled to indemnification hereunder,
then the indemnified party shall be entitled to recover from the indemnifying
party, all of the reasonable attorney's fees and other costs and expenses of
litigation of any nature whatsoever incurred in the defense of such claim.
Notwithstanding the assumption of the defense of any claim by an indemnifying
party pursuant to this paragraph, the indemnified party shall have the right to
approve the terms of any settlement of a claim (which approval shall not be
unreasonably delayed or withheld).
ii. The indemnifying party and the indemnified party
shall cooperate in furnishing evidence and testimony and in any other manner
which the other may reasonably request, and shall in all other respects have an
obligation of good faith dealing, one to the other, so as not to unreasonably
expose the other to undue risk of loss.
d. Limitation of Liability. Except as provided above, in no
event shall either Party be liable to the other Party for any incidental,
consequential, special, or punitive damages arising out of this Agreement or its
termination, whether liability is asserted in contract, tort (including
negligence or strict product liability) or otherwise, and irrespective of
whether such Party has been advised of the possibility of any such loss or
damage. Further, Licensor shall not be obligated to make any payment for
indemnification under this Section 8 in excess of the aggregate amount of the
License Fee, Package Fee and Sample Fee received by Licensor from Licensee.
9. Representations and Warranties of Licensee. Licensee hereby
represents and warrants as follows:
11
a. Organization; Authority; Enforceability. Licensee is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Licensee, has
been duly authorized by all necessary corporate action, and constitutes the
legal, valid and binding obligation of Licensee enforceable in accordance with
its terms.
b. No Conflict or Breach. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, and the
fulfillment of the terms hereof, will not (i) constitute, with or without the
giving of notice or passage of time, or both, a breach of any of the terms or
provisions of, or a default under any agreement, indenture or other instrument
to which Licensee is a party or by which it or any of its Property is bound,
(ii) cause, or give any person grounds to cause, with or without the giving of
notice or passage of time, or both, the maturity of any material liability or
obligation of Licensee to be accelerated, increased or otherwise affected, or
(iii) conflict with Licensee's Certificate of Incorporation, By-Laws, or any
judgment, decree, order or award of any court, governmental body or arbitrator
binding upon Licensee, or any law, rule, or regulation applicable to it.
c. Approvals. No consent, action, approval or authorization
prescribed by any law, rule or regulation, or by any agreement to which Licensee
is a party, is required in order to permit the consummation of the transactions
contemplated by this Agreement.
d. No Legal Bar. Licensee is not prohibited by any order,
writ, injunction or decree from consummating the transactions contemplated by
this Agreement, and no action or proceeding is pending or, to the best of
Licensee's knowledge, threatened against Licensee which questions the validity
of this Agreement or any of the actions which the Parties have taken in
connection herewith or which it is contemplated they shall take in connection
herewith.
c. Finder. Licensee has taken no action and has not dealt with
any person in any manner which will result in any liability to Licensor to pay
any brokerage fees or commissions or finder's fees with respect to this
Agreement or the transactions contemplated hereby.
10. Representations and Warranties of Licensor. Licensor represents and
warrants as follows:
12
a. Organization and Authority. Licensor is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Licensor, has been duly authorized by
all necessary corporate action on the part of Licensor, and constitutes the
legal, valid and binding obligation of Licensor, enforceable in accordance with
their respective terms.
b. No Conflict or Breach. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and the
fulfillment of the terms hereof will not (i) constitute, with or without the
giving of notice or passage of time, or both, a breach of any of the terms or
provisions of, or a default under, any agreement, indenture or other instrument
to which Licensor is a party or by which Licensor or any of its property is
bound or conflict with the terms of any license granted to any other person,
corporation or other entity, (ii) cause, or give any person grounds to cause,
with or without the giving of notice or passage of time, or both, the maturity
of any material liability or obligation of Licensor to be accelerated, increased
or otherwise affected, or (iii) conflict with Licensor's Certificate of
Incorporation or By-Laws, or any judgment, decree, order or award of any court,
governmental body or arbitrator binding upon Licensor, or any law, rule or
regulation applicable to Licensor.
c. Approvals. No consent, action, approval or authorization
prescribed by any law, rule or regulation or any agreement to which Licensor is
a party is required in order to permit the consummation of the transactions
contemplated by this Agreement.
d. No Legal Bar. Licensor is not prohibited by any order,
writ, injunction or decree from consummating the transactions contemplated by
this Agreement, and no action or proceeding is pending or, to the best of
Licensor's knowledge, threatened against either of them which questions the
validity of this Agreement or any of the actions which the Parties have taken in
connection herewith, or which it is contemplated they shall take in connection
herewith.
e. Finder. Licensor has not taken any action or dealt with any
person in any manner which will result in any liability to Licensee to pay any
brokerage fees or commissions or finder's fees with respect to this Agreement or
the transactions contemplated hereby or thereby.
f. Ownership. Licensor has all right, title, and interest in
and to the Licensed Property as required for the non-infringing use of the
Licensed Property. Schedule 1(a) is a complete and accurate list of all of the
Licensed Property owned or used by the Licensor which relate to the business of
the Licensor.
13
11. Termination; Obligations on Expiration or Termination.
a. Termination for Breach. In the event of a material breach
of this Agreement, the non-breaching Party shall have the right to terminate
this Agreement, upon forty-five (45) days written notice specifying the nature
of the breach and provided that the breaching Party has not cured such breach
within such forty-five (45) day period.
b. Rights and Obligations on Termination. Upon expiration or
termination of this Agreement, Licensee shall cease use of the License, and any
sublicense shall terminate; provided, however that the Licensee shall have a
period of one hundred expiration or termination to use, on a non-exclusive
basis, its remaining inventory of Fly Free Packages in connection with the
marketing and sale of Covered Products (the "Sell-Off Period"). Upon the
expiration of the Sell-Off Period, the Licensee shall cease to use the Fly Free
Packages. In the event that this Agreement is terminated by the Licensee other
than by reason of a default of this Agreement by Licensor, the Escrow Amount (if
any) shall be immediately delivered to Licensor.
12. Arbitration. Except as provided in Section 13f, any and all
disputes between the Parties arising out of or in connection with the
negotiation, execution, interpretation, performance or nonperformance of this
Agreement shall be solely and finally settled by arbitration before a panel of
three (3) arbitrators, which shall be conducted in New York, New York or at such
other location as the Parties may agree in writing. The arbitrator shall conduct
the proceedings in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "Rules"). The arbitration proceeding shall
be initiated in accordance with the Rules. The Parties hereby renounce all
recourse to litigation and agree that any arbitration award shall be final and
subject to no judicial review. The arbitration shall be conducted before three
(3) arbitrators, chosen in accordance with the Rules. The arbitrators shall
decide the issues submitted in accordance with (i) the commercial purposes of
this Agreement; and (ii) what is just and equitable under the circumstances,
provided that all substantive questions of law (excluding principles of
conflicts of laws) shall be determined under the laws of the State of New York.
a. Facilitation. The Parties agree to facilitate the
arbitration by: (i) making available to one another and to the arbitrators for
examination, inspection and extraction all documents, books, records and
personnel under their control determined by the arbitrator to be relevant to the
dispute, (ii) conducting arbitration hearings to the greatest extent possible on
successive days; and (iii) observing strictly the time periods established by
the Rules, or by the arbitrators, for submission of evidence or briefs.
14
b. Entry of Judgment Costs. Judgment on the award of the
arbitrator may be entered in any court having jurisdiction over the Party
against which enforcement of the award is being sought. All deposits and other
costs of arbitration, including without limitation attorneys' fees incurred in
connection with such arbitration, shall be borne by the non-prevailing Party
unless the arbitrators decide that they shall be allocated between parties in
particular proportions.
13. Miscellaneous.
a. No Waiver. No action taken by any Party shall be deemed to
constitute a waiver by such Party of compliance with any covenant or agreement
contained in this Agreement, no course of dealing between the Parties and no
failure or delay on the part of any Party in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof and no single or partial
exercise of any right, power or privilege shall preclude any other or future
exercise thereof or the exercise of any other right, power or privilege.
b. Entire Agreement: Amendments. This Agreement, together with
the Exhibit and Schedules hereto, constitute the entire agreement, and
supersedes all prior and contemporaneous agreements and understandings, whether
oral or written, between the Parties with respect to the subject matter hereof.
No modification, amendment or waiver of any provision of this Agreement shall be
effective unless in writing and signed by the party or parties against whom
enforcement thereof is sought, and any such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
c. Assignment. The Parties may not assign the License or any
of their respective rights hereunder (other than Licensee may sublicense the
License to an Affiliate of Licensee with fifteen (15) days prior written notice
to Licensor, provided that such sublicense shall not relieve Licensee of its
financial obligations hereunder, which shall remain primary and direct) without
the prior written approval of the other Party, which approval may be withheld in
such Party's sole discretion. In addition, any such assignment shall not become
effective until such time as the assignee executes an instrument binding it to
the terms of this Agreement, and the assigning Party provides written notice of
such assignment to the other Party.
d. Sublicense. Licensee may not sublicense the License or any
of its rights hereunder without the prior written approval of Licensor, which
approval may be withheld in Licensor's sole discretion. In addition, any such
sublicense shall not become effective until such time as the, sublicensee
executes an instrument with respect to the Licensed Property which shall
include, without limitation, quality control provisions substantially similar to
those set forth in paragraph 6c hereof, and the Licensee provide written notice
of such sublicense to the Licensor.
15
e. Survival. In addition to any provisions of this Agreement
providing for the continuation of fights or obligations after the termination of
this Agreement, the following Sections shall survive any termination of this
Agreement: Sections 2, 5, 6, 8, 9, 10, 11 and 13; and shall be specifically
enforceable in any court of competent jurisdiction. In no event shall a demand
for arbitration be made after the date when any applicable statute of
limitations, or period for claims under this Agreement, would bar institution of
a legal or equitable proceeding based on such dispute or subject matter in
question. Notwithstanding anything hereby to the contrary, if, prior to the
expiration of any indemnification period, either Licensor or Licensee shall have
been notified of a claim for indemnity hereunder, the substance of such claim to
be specified in reasonable detail to the extent available, and such claim shall
not have been finally resolved before the expiration of such period, any
representation, warranty, covenant or agreement that is the basis for such claim
shall continue to survive and shall remain a basis for indemnity as to such
claim until such claim is finally resolved.
f. Specific Performance. Licensor and Licensee each
acknowledge that the License is unique and that Licensor and/or Licensee may
have no adequate remedy at law for the failure by either of them to perform
their respective obligations hereunder. Accordingly, Licensor and Licensee each
agrees that in the event of any such failure, until the date of the final
judgment with respect to any such dispute pursuant to Section 12, the
non-breaching Party shall have the right to obtain an injunction against the
breaching party from any court having jurisdiction over the matter restraining
any such breach, and the non-breaching Party shall not oppose the granting of
such relief on the grounds that money damages are a sufficient remedy.
g. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents and other communications required or permitted to be
given or made hereunder, including notice of change of address, shall be in
writing and shall be deemed to have been duly given or made when received,
either hand delivered, telexed or mailed, federal express courier, registered or
certified first class mail, postage prepaid, return receipt requested, to the
Party to whom the same is so given or made. is so given or made.
If to Licensor, {Confidential portion omitted and filed
separately with the Commission}
with a copy to: Charles I. Weissman
Swidler Berlin Shereff Friedman, LLP
919 Third Avenue
New York, New York 10022-9998
Fax: (212) 758-9526
If to Licensee: Jeffrey Schwartz
Quintelcomm, Inc.
16
|
One Blue Hill Plaza
Pearl River, New York 10965
Fax: (212) 898-0492
with a copy to: Geoffrey A. Bass, Esq.
Feder, Kaszovitz, Isaacson, Weber, Skala &
Bass LLP
750 Lexington Avenue
New York, New York 10022-1200
|
h. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the Parties and their
respective successors, assigns, heirs and legal representatives.
i. Severability. The invalidity of all or part of any
paragraph of this Agreement shall not render invalid the remainder of such
paragraph or of this Agreement. If any provision of this Agreement is so broad
as to be unenforceable, such provision shall be interpreted to be only so broad
as is enforceable.
j. Headings. The headings of this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
k. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute a single instrument.
l. Governing Law. This Agreement shall be governed by, and
construed and interpreted in all respects in accordance with the laws of the
State of New York, without giving effect to the principles of conflict of laws
thereof.
m. Franchise. The Parties acknowledge and agree that this
Agreement is an intellectual property rights license agreement and does not
constitute, and shall not be construed as, a franchise agreement. The Parties
further acknowledge and agree that state and federal franchise laws do not and
will not apply to this Agreement or to the relationship between Licensee and
Licensor and their respective rights and obligations hereunder.
n. Further Assurances. The Parties hereby agree to execute and
deliver any further instruments, certificates and documents as may be reasonably
requested from each Party by any of the Parties in order to carry out the terms
and conditions of this Agreement.
17
IN WITNESS WHEREOF, the Parties have executed and delivered, or have
caused this Agreement to be executed and delivered by their duly authorized
representative, as of the date first above written.
{Confidential portion omitted and filed
separately with the Commission}
QUINTELCOMM, INC.
By: /s/ Jeffrey Schwartz
---------------------------------------
Name: Jeffrey Schwartz
Title: CEO
|
18
Schedule 1(a)
Trademark
1. Fly Free America(TM) (including, without limitation, the uses of Fly
Free Emetica(TM) set forth in the attached Fly Free Package).
19
EXHIBIT 10.29.2
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of December 11, 1998 (this "Agreement"), by
and among Quintelcomm, Inc., a Delaware corporation ("Quintel"), {Confidential
portion omitted and filed separately with the Commission}, and Swidler Berlin
Shereff Friedman, LLP, as Escrow Agent (the "Escrow Agent").
RECITALS
WHEREAS, Quintel and {Confidential portion omitted and filed separately
with the Commission} have entered into a License Agreement (the "License
Agreement"), dated as of December __, 1998 and effective as of August 28, 1998,
whereby {Confidential portion omitted and filed separately with the Commission}
agrees to grant to Quintel a license to use the Licensed Property, and Quintel
agrees to make certain payments to {Confidential portion omitted and filed
separately with the Commission}, including the Prepaid License Fee (capitalized
terms used herein which are not otherwise defined shall have the respective
meanings ascribed thereto in the License Agreement);
WHEREAS, pursuant to Section 2 of the License Agreement, Quintel
desires to deposit {Confidential portion omitted and filed separately with the
Commission} (the "Escrow Deposit") of the Prepaid License Fee in the Escrow
Account (as defined herein) to be held in escrow until released in accordance
with the terms of this Agreement; and
WHEREAS, Quintel and {Confidential portion omitted and filed separately
with the Commission} desire that Swidler Berlin Shereff Friedman Hoffman, LLP
act as escrow agent to hold the Escrow Deposit in escrow pursuant to the terms
of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein,
intending to be legally bound hereby, the parties hereto agree as follows:
1. Appointment. Quintel and {Confidential portion omitted and filed
separately with the Commission} hereby appoint and designate the Escrow Agent,
and Escrow Agent agrees to serve, as escrow agent for the purposes set forth
herein.
2. Escrow. The Escrow Agent agrees to receive, as escrow agent, a check
or a wire transfer of immediately available funds from Quintel in an amount
equal to the Escrow Deposit, which shall be held in escrow in a special interest
bearing account designated by the Escrow Agent (the "Escrow Account"), in
accordance with the terms and provisions of this Agreement. Interest earned on
the Escrow Deposit shall be paid to the party entitled to receive the Escrow
Deposit as provided for herein, and the party receiving such interest shall pay
income taxes on any such interest payment.
3. Release of Escrow Deposit. The Escrow Agent shall hold the Escrow
Deposit until it delivers the Escrow Deposit, with interest, as provided in this
Section 3.
3.1 Notification and Action. The Escrow Agent shall not make
any distributions of the Escrow Deposit except as specifically set forth below.
The Escrow Agent shall distribute the Escrow Deposit as follows:
(i) the principal sum of {Confidential portion omitted and
filed separately with the Commission}, together with any accrued interest
thereon, to {Confidential portion omitted and filed separately with the
Commission} from the Escrow Account on each of January 1, February 1, and March
1; provided, however, that the Escrow Agent shall not make any such distribution
if it has received written notice from Quintel (the "Default Notice") stating
that as of such date {Confidential portion omitted and filed separately with the
Commission} is in default in the performance of its obligations under the
License Agreement;
(ii) the entire Escrow Deposit (if any), with interest
thereon, to {Confidential portion omitted and filed separately with the
Commission} on the date of termination of the License Agreement by the Licensee,
pursuant to Section 11(b) of the License Agreement;
(iii) upon receipt of written instructions signed by a duly
authorized officer of each of Quintel and {Confidential portion omitted and
filed separately with the Commission} (the "Written Instructions"); and
(iv) upon receipt of an order of a court of competent
jurisdiction directing the distribution of the Escrow Deposit or a portion
thereof (a "Court Order").
In the event the Escrow Agent receives the Default Notice, the Escrow Agent
shall make further distributions of the Escrow Deposit only in accordance with
subsections (iii) and (iv) of this Section 3.1. Within five (5) days after
receipt by the Escrow Agent of the Written Instructions or the Court Order, the
Escrow Agent shall deliver the Escrow Deposit or any designated portion thereof,
to the party or parties in the manner set forth in the Written Instructions or
in the Court Order, as the case may be.
3.2 Conflicting Notification. In the event of conflicting
instructions from a duly authorized officer of Quintel and {Confidential portion
omitted and filed separately with the Commission}, the Escrow Agent shall, in
its sole and absolute discretion: (i) continue to hold the portion of the Escrow
Deposit which is the subject of such conflicting instructions until it shall
receive a copy of a final and unappealable court order from a court of competent
jurisdiction (in form and substance satisfactory to the Escrow Agent), directing
it to deliver such portion of the Escrow Deposit in accordance with the terms of
such court order, in which event the Escrow Agent shall deliver such portion of
the Escrow Deposit in accordance therewith, or (ii) at any time after receipt of
such conflicting instructions, deliver such portion of the Escrow Deposit into
the control of a court of competent jurisdiction in New York County or in a
federal court sitting in New York County, in which event the Escrow Agent shall
have no further obligations or responsibilities with respect thereto.
2
4. Fees and Expenses. The Escrow Agent shall not be entitled to any fee
for acting as such, but shall be reimbursed for all out-of-pocket expenses
incurred in connection herewith, including, without limitation, legal fees and
expenses, which shall be borne equally by Quintel and {Confidential portion
omitted and filed separately with the Commission}.
5. Responsibilities of Escrow Agent. The Escrow Agent's acceptance of
its duties under this Agreement is subject to the following terms and
conditions, which shall govern and control with respect to its rights, duties,
liabilities and immunities:
(a) The Escrow Agent makes no representations or warranties
and has no responsibilities as to the correctness of any statement contained
herein, and the Escrow Agent shall not be required to inquire as to the
performance of any obligation under any agreement or document other than this
Agreement, including, without limitation, the License Agreement or any
agreements or documents referred to herein or therein.
(b) The Escrow Agent shall be protected in acting upon any
written notice, request, waiver, consent, receipt or other paper or document
from any of the parties hereto, not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth of any
information therein contained and what it purports to be. The Escrow Agent shall
be entitled to rely upon any certification, instruction, notice or other writing
delivered to it in compliance with the provisions of this Agreement without
being required to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity thereof. The Escrow Agent may act or
fail to act in reliance upon any instrument comporting with the provisions of
this Agreement or signature believed by it, without independent investigation,
to be genuine and may assume that any person purporting to give notice or advice
or make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
(c) The sole duty of the Escrow Agent, other than as herein
specified, shall be to receive the Escrow Deposit and hold it subject to
release, in accordance with the written instructions of Quintel and
{Confidential portion omitted and filed separately with the Commission}, or as
otherwise provided for herein, and the Escrow Agent shall be under no duty to
determine whether {Confidential portion omitted and filed separately with the
Commission} is complying with requirements of the License Agreement or any other
agreement or document. No implied covenants or obligations shall be inferred
from this Agreement against the Escrow Agent, nor shall the Escrow Agent be
bound by the provisions of any agreement beyond the specific terms hereof. The
Escrow Agent shall have no duties or except those expressly set forth herein and
shall neither be obligated to recognize nor have any liability or responsibility
arising under any other agreement to which the Escrow Agent is not a party, even
though reference thereto may be made herein. The Escrow Agent shall not be under
any obligation to take any legal action in connection with this Agreement or
towards its enforcement or performance or to appear in, prosecute or defend any
action or legal proceeding in connection herewith.
3
(d) The Escrow Agent does not have any interest in the Escrow
Deposit, but is serving as escrow holder only and has only possession thereof.
(e) The Escrow Agent shall not be liable for any error of
judgment, or for any mistake of fact or law, or for anything which it may do or
refrain from doing in connection herewith, except as may result from its own
gross negligence or willful misconduct.
(f) The Escrow Agent may consult with legal counsel selected
by it (including any member of its firm), and shall not be liable for any action
taken or omitted by it in accordance with the advice of such counsel.
(g) Quintel and {Confidential portion omitted and filed
separately with the Commission}, jointly and severally, agree to indemnify the
Escrow Agent against and save it harmless from any and all claims, liabilities,
costs, payments and expenses, including reasonable fees and expenses of counsel
paid to retained attorneys (who may be selected by the Escrow Agent), incurred
as a result of or in connection with the performance of this Agreement, except
as a result of the Escrow Agent's own gross negligence or willful misconduct.
(h) The duties of the Escrow Agent hereunder are solely
ministerial in nature, and the Escrow Agent shall not have any liability under,
or duty to inquire into, the terms and provisions of any other agreement or
document. The participation of Swidler Berlin Shereff Friedman, LLP as Escrow
Agent is being undertaken as an accommodation to the parties hereto. The parties
acknowledge that the Escrow Agent, from time to time, has served as counsel to
{Confidential portion omitted and filed separately with the Commission}
including, without limitation, in connection with the negotiation, execution and
delivery of the License Agreement and any other agreements or documents
contemplated thereby. Quintel expressly waives any conflict of interest arising
on account of such representation by the Escrow Agent and its service as the
Escrow Agent hereunder. The participation of Swidler Berlin Shereff Friedman,
LLP as Escrow Agent shall in no way hinder or limit the present or future
ability of Swidler Berlin Shereff Friedman, LLP to act as counsel to
{Confidential portion omitted and filed separately with the Commission} with
respect to any matter including, but not limited to, disputes with regard to
this Agreement; provided, however, that such representation shall not affect the
Escrow Agent's obligations hereunder and shall be at the sole cost and expense
of {Confidential portion omitted and filed separately with the Commission}.
(i) In the event any property held by the Escrow Agent
hereunder shall be attached, garnished or levied upon under an order of court,
or the delivery thereof shall be stayed or enjoined by any order of court, or
any other writ, order, judgment or decree shall be entered or issued by any
court affecting such property, or any part thereof, or any act of the Escrow
Agent, the Escrow Agent is hereby expressly authorized to use its sole
discretion to obey and comply with all writs, orders, judgments or decrees so
entered or issued, whether with or without jurisdiction, and in the event the
Escrow Agent obeys and complies with any such writ, order, judgment or decree,
it shall not be liable to any person, firm or corporation by reason of such
compliance notwithstanding the fact that
4
such writ, order, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
(j) The Escrow Agent may, at any time, resign and be
discharged from its duties hereunder by providing written notice to Quintel and
{Confidential portion omitted and filed separately with the Commission} and
depositing the Escrow Deposit with a successor escrow agent jointly designated
by Quintel and {Confidential portion omitted and filed separately with the
Commission}. Upon receipt of the Escrow Agent's resignation, Quintel and
{Confidential portion omitted and filed separately with the Commission} shall
promptly appoint a successor escrow agent. If no successor shall have been
appointed within ten (10) days after the mailing of notice of resignation by the
Escrow Agent, the Escrow Agent shall be entitled to deposit any or all of the
Escrow Deposit with a court of competent jurisdiction in New York County or in a
federal court sitting in New York County.
6. Amendment and Termination. This Agreement may be amended or
terminated only by a writing signed by the Escrow Agent, Quintel and
{Confidential portion omitted and filed separately with the Commission}. Once
the Escrow Deposit has been fully distributed, this Agreement shall terminate
and the Escrow Agent shall have no further duties or responsibilities hereunder;
provided, however, that the fees and expenses provisions of Section 4 and the
exculpatory and indemnification provisions of Section 5 shall survive
termination.
7. Interpleading. Notwithstanding Section 3 hereof or anything to the
contrary herein, at any time the Escrow Agent shall have the right, in its sole
discretion, to deposit the Escrow Deposit with a court of competent jurisdiction
in New York County or in a federal court sitting in New York County, in which
event the Escrow Agent shall give written notice of such deposit to each of the
other parties hereto. Upon such deposit, the Escrow Agent shall be relieved and
discharged of all further duties and responsibilities with respect to the Escrow
Deposit.
8. Notices. Any notice, demand, request, waiver, or other communication
under this Agreement shall be in writing (including facsimile or similar
writing) and shall be deemed to have been duly given (i) on the date of service
if personally served, (ii) on the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid, or (iii) on the date sent if sent by mail as
aforesaid on the same date (or at such other address or facsimile number for a
party as shall be specified by like notice):
If to Quintel, to:
Jeffrey Schwartz
Quintelcomm, Inc.
One Blue Hill Plaza
Pearl River, NY 10965
Fax no.: (914) 620-1717
5
with a copy to:
Geoffrey A. Bass
Feder, Kaszovitz, Isaacson, Neber, Skala & Bass LLP
750 Lexington Avenue
New York, NY 10022
Fax no.: (212) 888-7776
If to {Confidential portion omitted and filed separately with
the Commission} to:
{Confidential portion omitted and filed separately with the
Commission}
If to the Escrow Agent, to:
Charles I. Weissman, Esq.
Swidler Berlin Shereff Friedman, LLP
919 Third Avenue
New York, New York 10022
Fax No.: (212) 758-9526
9. Miscellaneous. This Agreement shall be binding upon the successors
and assigns of the parties hereto and shall inure to the benefit of and be
enforceable by each of them and their respective permitted successors and
assigns. The headings in this Agreement are for purposes of reference only and
shall not limit or define the meaning hereof. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto.
10. Governing Law; Consent to Jurisdiction. This Agreement shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as applied to contracts made and to be performed entirely within the
State of New York. Any legal action, suit or proceeding arising out of or
relating to this Agreement may be instituted in any state or federal court
located within the County of New York, State of New York, and each party hereto
agrees not to assert, by way of motion, as a defense, or otherwise, in any such
action, suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such court as an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court. Each party hereto further
irrevocably submits to the jurisdiction of any such court in any such action,
suit or proceeding.
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
Quintelcomm, Inc.
By: /s/ Jeffrey Schwartz
------------------------------------
Name: Jeffrey
Title: Chairman
|
{Confidential portion omitted and filed
separately with the Commission}
Swidler Berlin Shereff Friedman, LLP
as Escrow Agent
/s/ Swidler Berlin Shereff Friedman, LLP
---------------------------------------------
|
7
EXHIBIT 21
SUBSIDIARIES OF QUINTEL COMMUNICATIONS, INC.
STATE OF INCORPORATION
SUBSIDIARY OR ORGANIZATION
---------- ----------------------
1. Calling Card Company, Inc. ................................. New York
2. New Lauderdale L.C. ........................................ Florida
3. N.L. Corp. ................................................. Delaware
4. Creative Direct Marketing, Inc. ............................ Delaware
5. Quintel Hair Products, Inc. ................................ Delaware
6. Quintel Products, Inc. ..................................... Delaware
7. Quintelco., Inc. ........................................... Delaware
8. Quintel Psychic Zone, Inc. ................................. Delaware
9. Quintel LaBuick Products, LLC............................... Delaware
10. Quintel Cellular, LLC....................................... Delaware
11. Quintel Comm., Inc.......................................... Delaware
12. Quintel Financial Information Services, Inc................. Delaware
|
|
ARTICLE 5
|
|
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE QUINTEL
ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENT AS
PRESENTED IN THE COMPANY'S FORM 10K FOR THE YEAR ENDED NOVEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
|
|
|
|
PERIOD TYPE
|
12 MOS
|
|
FISCAL YEAR END
|
NOV 30 1998
|
|
PERIOD START
|
DEC 01 1997
|
|
PERIOD END
|
NOV 30 1998
|
|
CASH
|
2,123,630
|
|
SECURITIES
|
15,019,233
|
|
RECEIVABLES
|
31,230,579
|
|
ALLOWANCES
|
0
|
|
INVENTORY
|
0
|
|
CURRENT ASSETS
|
63,269,243
|
|
PP&E
|
1,661,429
|
|
DEPRECIATION
|
517,528
|
|
TOTAL ASSETS
|
64,413,144
|
|
CURRENT LIABILITIES
|
27,731,000
|
|
BONDS
|
0
|
|
PREFERRED MANDATORY
|
0
|
|
PREFERRED
|
0
|
|
COMMON
|
16,679
|
|
OTHER SE
|
36,665,465
|
|
TOTAL LIABILITY AND EQUITY
|
64,413,144
|
|
SALES
|
94,690,251
|
|
TOTAL REVENUES
|
94,690,251
|
|
CGS
|
80,037,115
|
|
TOTAL COSTS
|
80,037,115
|
|
OTHER EXPENSES
|
34,049,435
|
|
LOSS PROVISION
|
0
|
|
INTEREST EXPENSE
|
186,218
|
|
INCOME PRETAX
|
(17,370,082)
|
|
INCOME TAX
|
(417,464)
|
|
INCOME CONTINUING
|
(19,396,299)
|
|
DISCONTINUED
|
0
|
|
EXTRAORDINARY
|
0
|
|
CHANGES
|
0
|
|
NET INCOME
|
(16,952,618)
|
|
EPS PRIMARY
|
(1.00)
|
|
EPS DILUTED
|
(1.00)
|
|