Contract Services Agreement
SERVICES AGREEMENT (this "Agreement") is entered into effective as of
October 4, 2001 (the "Effective Date") by and between The Gift Certificate
Company, Inc. (TGCC), a wholly-owned subsidiary of NBO, Inc., a Utah
corporation ("NBO"), with its principal place of business at ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and Bayer
Properties Inc. ("Operator") with an address of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. TGCC and Operator are sometimes each referred to
herein as a "Party" and collectively the "Parties."
RECITALS:
A. TGCC is in the business of developing, marketing, owning and operating
distribution and processing systems for gift cards, gift certificates, gift
rights, vouchers, and other instruments allowing the giving of a right to
receive a credit toward the purchase of merchandise (collectively "Mall Gift
Cards").
B. Operator is in the business of owning or managing regional shopping
centers. The Summit Birmingham AL, and The Summit Louisville, KY
C. The Parties desire to enter into a relationship whereby TGCC shall make
available to and install its Mall Gift Card distribution equipment and
related network components (collectively, the "System") at the Properties as
described in ADDENDUM D and to provide services associated therewith, as
further described in this Agreement.
NOW, THEREFORE: In consideration of the premises set forth above, the
mutual promises, covenants, agreements and benefits set forth herein below,
for other good and valuable consideration, and subject to the right of mall
tenants at the Property to offer Mall Gift Cards for their own
establishments, Parties agree as follows:
1. RIGHTS AND OBLIGATIONS OF OPERATOR
1.1 Distribution. Operator hereby grants to TGCC the exclusive right to
offer and issue Mall Gift Cards that may be used at all participating retail
establishments located at the Property. Nothing contained herein shall limit
the right of the tenants of the Property to issue Gift Cards for their
respective stores. Operator grants to TGCC a license to install the System at
the Property, for the Term (defined below) and as further described in this
Agreement. During the Term, TGCC shall also have the exclusive right to issue
the Mall Gift Cards through the Internet, via the TGCC or Affiliated
websites, retail points in the mall, and via telephone to individual and
corporate customers. TGCC acknowledges and agrees that if the TGCC system is
unable for any reason whatsoever to issue Mall Gift Cards, Operator may issue
Gift Certificates, and any such sales shall not violate the exclusive
provisions of this Agreement. TGCC further acknowledges and agrees the
Operator may continue to issue Gift Certificates from ATM locations on the
Property and such sales shall not violate the exclusive provisions hereof.
Furthermore, during the initial ninety (90) days after the System is
installed and operating, it is agreed and understood that Operator will
continue to have a back-up Gift Certificate program in place in the event the
System does not function as the parties hereto intend. Operator agrees to
only use the back up system when the TGCC system is inoperable.
1.2 Utility Access and Service. Operator shall provide, or cause to be
provided, in the Properties Customer Service Booth or other locations
mutually agreed upon, the facilities necessary to enable TGCC to obtain and
maintain for the System, the electricity, network connectivity, and
telecommunication service (the "Utility Services") required for its
operation, as specified in ADDENDUM A part II, attached hereto. The
installation of such services, and associated on-going monthly fees, shall be
at Operator's sole cost and expense. Such installation shall include
coordination with TGCC. TGCC will charge Operator a monthly fee for IC
Verify, or equivalent software as specified in ADDENDUM A part II, attached
hereto, for the ability to access the credit card processor.
1.3 Advertising. Operator agrees to advertise the Mall Gift Cards at the
Property, and to the tenants, prospective tenants, individual, and corporate
customers of the Property in such manner as Operator deems appropriate at
Operator's sole cost and expense.
1.4 Maintenance and Training. Operator shall provide, at no cost to
TGCC, the personnel necessary to (i) periodically monitor the inventory of
Mall Gift Card stock, (ii) restock and secure the stock as needed and (iii)
notify TGCC or its designated agent of any malfunction with, or damage to the
System or any component thereof within twenty-four (24) hours of operator
being notified of the problem. In addition, Operators personnel shall
cooperate with TGCC in performing TGCC's periodic maintenance and diagnostic
procedures on the System's hardware and/or software components ("Components")
to determine if and when any periodic or preventative maintenance is needed
or if a TGCC designated service organization should be called. TGCC shall
provide, or cause to be provided, all necessary maintenance and repair,
typically within twenty-four (24) hours of Operator's request therefore.
Operator agrees to make personnel available at the Property to assist users
of the System in purchasing Mall Gift Cards at the customer service counter.
TGCC shall provide training to appropriate Operator personnel.
1.5 Financial Responsibility. Operator accepts full financial
responsibility for the collection of all funds associated with the issuance
of Mall Gift Cards sold at all locations within the Property. At the
conclusion of each business day, Operator shall assure that the amount
necessary to completely cover all Mall Gift Cards sold for such business day
are deposited in the Depository Account as defined in section 3.1, whether by
cash or credit/debit card funds, and shall assure the amounts deposited
correspond to the value of the Mall Gift Cards issued for such day. In the
event that TGCC determines that there is a shortage, it shall provide
immediate notification thereof to Operators designee. In the event of a
shortage, whether discovered by Operator or TGCC, Operator shall deposit
sufficient funds to cover the shortage into the Depository Account within
five (5) business days following the discovery of the shortage. This
financial responsibility also includes the obligation to promptly reimburse
the Depository Account for any credit card charge-backs and returned checks
and associated fees.
1.6 Credit/Debit Card Fees. Operator agrees to reimburse TGCC for all
credit and debit card fees associated with Operator approved credit and debit
cards for the issuance of Mall Gift Cards. Reimbursement of fees will apply
to Mall Gift Cards issued at the Property, via the Internet, telephone, or
any other channel. TGCC shall ▇▇▇▇ such credit and debit card fees to
Operator based on actual rates charged to TGCC by the credit card companies.
Said billing statements shall be sent directly to the Operators management
office unless otherwise directed by the Operator. Operator shall reimburse
the fees to TGCC within fifteen (15) days of receiving monthly billing
statements. Current approximate rates and accepted credit cards are listed in
ADDENDUM B. TGCC will invoice Operator for all fees related to charge back
expenses, duplicate reports, research, special processing fees, etc. as
billed to TGCC by the credit card companies. An additional 1% per month
interest charge will be assessed on all billed amounts not paid within 30
days after due date, both before and after judgment and continuing each month
until paid, in the event of default, the Operator agrees to pay all
reasonable costs of collection and attorney fees.
1.7 Software Licensing Fee. TGCC shall provide proprietary software for
all Components in the System, including maintenance and upgrades, at a charge
to the Operator as specified in ADDENDUM A of this agreement.
1.8 Administrative Fee and Expiration. NBO will charge a non-use fee on
Mall Gift Cards that retain a balance after a specified period of time from
date of purchase and continue to assess a fee until the Mall Gift Cards have
expired, fee will continue if card is reissued (unless otherwise prohibited
by law) or have a zero account balance. These fees and terms are specified
in ADDENDUM A and will be deducted from the balance of the Mall Gift Card in
accordance with the Terms and Conditions provided with the Mall Gift Card at
time of purchase.
1.9 Initial load and Activation Fee. Operator agrees to reimburse TGCC
for the Initial Load and Activation fee (one time charge) and Account on File
Fee (charged monthly on all active cards) required for its operation, as
specified in ADDENDUM A.
1.10 Mall Set-Up Fees. Operator agrees to pay a one-time fee, as
specified in ADDENDUM A, per mall for the mall setup, creation of mall data,
and retail merchant inclusion tables.
1.11 Mall Gift Cards and Packaging. TGCC shall provide Mall Gift Cards
and packaging at a cost to Operator and Operator agrees to pay for these
costs. Operator shall pay total costs of the Mall Gift Cards and Packaging in
advance for the initial start up program. On subsequent orders Operator shall
pay to TGCC 50% of costs in advance with the remaining 50% due with in thirty
(30) days after delivery. Mall Gift Cards and packaging specifications and
the associated costs are specified in ADDENDUM A of this Agreement.
1.12 Relocation. Operator shall have the right at any time during the
Term to relocate the Components to another mutually agreeable location at the
Property upon giving TGCC at least thirty (30) days advance written notice of
its intention to so relocate. In that event, Operator shall at its expense
bring the necessary utilities to the relocated Components. TGCC shall provide
the technical expertise, via telephone, to assure that the Components are
functioning properly following the relocation. If it becomes necessary for
the Operator to require TGCC or a TGCC representative to physically assist in
this relocation process, Operator agrees to cover all related reasonable
expenses, which must be mutually agreed upon in writing prior to any work or
services being performed.
1.13 Internet Connection. When the Property has established a working
website, Operator and TGCC shall cooperate in designing and implementing a so-
called "HTML Frame" which shall allow visitors to Operator's website the
ability to purchase Mall Gift Cards via the Internet. Operator shall provide
TGCC with names of Operator's website administrators in order to complete all
programming requirements. Operator shall pay for all programming costs to
establish and maintain the "HTML Frame" in Operator's websites and TGCC shall
pay for programming costs required for TGCC to gain access to and interact
with Operator's websites as set forth in ADDENDUM A part II. TGCC shall
provide accounting of all Operator Mall Gift Cards sold on the Internet from
either site as set forth in Paragraph 3.10.
1.14 Bank Processing. Any additional fees or charges related to the bank
processing of the Mall Gift Cards that are dependent on the type of
instrument being used are defined in ADDENDUM B.
1.15 Co-Branding Supplemental Agreement. Operator will be required
to sign a Co-Branding Agreement with Card Issuer. This agreement is to
protect and preserve the Card Issuer brand. This agreement is included in
ADDENDUM C
2. RIGHTS AND OBLIGATIONS OF TGCC
2.1 The System. TGCC shall install the System at the Property to operate
and process gift cards, (collectively "Mall Gift Cards"). TGCC shall cause
the Components to be fully activated and operational by November 1, 2001 and
no later than November 15, 2001. Operator agrees to have utility and services
on site prior to installation and complete the required data collection
procedures within five (5) business days of executed agreement. The current
System hardware shall become the exclusive property of the Operator upon TGCC
receiving the full amount specified in ADDENDUM A of this agreement which
shall also include shipping and installation costs of any or all associated
components of the System. Operator shall have the right to request the
installation of additional Components as part of the System, and TGCC shall
provide such additional Components to Operator for such periods of time as
are requested by Operator, from time to time, at a cost to Operator, as
specified in ADDENDUM A, per month for each additional unit rented, plus all
shipping, installation, un-install and connection costs, within forty-five
(45) days following Operators written request. TGCC is and shall be the sole
owner of the trade name "The Gift Certificate Company", "The Gift Card
Company", and all other trade names, trademarks and copyrights used now or in
the future in connection with the System. TGCC retains all rights to the
System software it has developed. Software supplied with the System may not
be copied, sold or used except as authorized by TGCC. Operator acknowledges
that TGCC's hardware is designed exclusively for the Mall Gift Card software
only. Operator agrees not to install additional software. TGCC hereby grants
Operator a license to use the system software for the Term hereof and in the
event of a default by TGCC, for a period not to exceed an additional ninety
(90) days.
2.2 Mall Gift Cards. A Mall Gift Card may be used by a holder to
purchase merchandise or services from a participating merchant. A Mall Gift
Card is an obligation of TGCC to pay to a merchant all or a portion of the
purchase price of merchandise or services corresponding to some or the entire
amount represented by the Mall Gift Card. The actual amount of the obligation
of TGCC depends upon the amount a purchaser paid for the Mall Gift Card, less
amounts previously used by a holder of the Mall Gift Card, and fees paid or
payable to TGCC that have been assessed against the Mall Gift Card. Each Mall
Gift Card and/or the Terms and Conditions given to the purchaser of the Mall
Gift Card, at the time of purchase of the Mall Gift Card, shall contain some
or all of the following language, which is incorporated into this contract by
reference:
The Terms and Conditions are a contract between the holder, TGCC, the
issuing Bank and the Mall Management. When presented to a participating
merchant for the purchase of merchandise and/or services, TGCC has the
obligation to pay the merchant all or part of the purchase price to the
extent of the remaining value of the Mall Gift Card. The remaining value
is equal to the purchase price of the Mall Gift Card, less any
previously used amounts, less any fees or charges deducted from the card
balance by TGCC as detailed in the Terms and Conditions accompanying the
card at time of purchase.
The following language shall be prominently included on the Mall Gift
Card
Mall Gift Card is not redeemable for cash
Subject to Expiration as specified on Mall Gift Card or Terms and
Conditions.
The Operator shall have no obligation under the Mall Gift Card program
to make any payments to merchants and shall have no obligation to
purchasers or holders of the Mall Gift Cards.
2.3 Competing Installations. TGCC has the right to enter into agreements
the same as or similar to this Agreement with other persons or entities who
may own or manage competing retail establishments or malls in the geographic
vicinity of the Property, and to install its distribution Systems in such
establishments or malls and offer Mall Gift Cards thereat.
2.4 Advertising. TGCC has the right to engage in an ongoing program of
advertising and promoting the services which it offers, including any
components of the System that may be installed at competing retail
establishments or malls located in the geographic vicinity of the Property.
TGCC shall use the name and or likeness of the Property in all of its
advertising and promotion. Further, TGCC shall have the right to solicit
advertising to be printed on the Mall Gift Cards or packaging. All such
advertising shall be subject to Operators approval, which Operator may
withhold in its sole discretion.
2.5 Maintenance and Training. During the Term of this Agreement, TGCC
shall maintain or cause to be maintained, and make all necessary repairs or
cause such repairs to be made to the System, including work on all hardware
and software associated with the Components to the extent damage is not due
to negligence or willfulness by the Operator. If negligence if caused by
Operator, TGCC shall be reimbursed within 15 days from Operator. TGCC shall
provide an instructional manual for the Components, at no additional cost to
the Operator. TGCC shall provide training to personnel designated by Operator
in the operation of the System, including, but not limited to, the method of
financial reconciliation contemplated by Paragraph 1.5 of this Agreement.
TGCC shall also conduct training sessions via telephone, as requested by
Operator, for representatives of the Property.
2.6 Consumer Convenience Fees. TGCC or the Operator may charge
Convenience Fees for the Mall Gift Cards in amounts determined by and between
the parties and each party's participation in such fees if charged, will be
as specified in ADDENDUM A of this agreement.
2.7 Mall Gift Card Payments. The Mall Gift Cards shall be in form and of
materials specified by TGCC and associated processing partners. At the time
of purchase, the Mall Gift Card shall represent a contract for a specific
amount purchased by the consumer. These Mall Gift Cards may be used in whole
or in part, from time to time, for purchasing merchandise, up to the amount
of the purchase price, less prior usage amounts and prior fees charged. TGCC
guarantees payment to the retail establishment as long as said establishment
follows the TGCC Mall Gift Card procedures. Such procedures shall be mutually
agreed upon by the parties hereto except as governed by processing and/or
Card Issuer regulations. Other media may be used from time to time as
specified by TGCC with consent from Operator. Such consent may be revoked
from time to time.
2.8 Management of Depository and Related Accounts. Certain depository
and other accounts shall be established by TGCC, Operator, and related third
parties, as directed by TGCC. See Section 3.1 thru 3.6 for account details.
2.9 Financial Responsibility. TGCC will be financially responsible for
the collection of credit card funds associated with the issuance of Mall Gift
Cards over the Internet or through the toll-free numbers at TGCC as
established by TGCC. At the conclusion of each business day, TGCC shall
assure that the amounts collected for such business day are deposited in the
Depository Account, (whether by credit/debit card, cash or check)
corresponding to the value of such Mall Gift Cards issued for such day. In
the event of a shortage, whether discovered by Operator or TGCC, TGCC shall
cause the Depository Account to have sufficient funds to cover the daily
shortage against the outstanding Mall Gift Cards within fifteen (15) days
following the discovery of the shortage.
2.10 Unused Mall Gift Cards. TGCC shall be responsible for and shall
cause compliance with all applicable local abandoned property or escheat
laws. Any balance of unused Mall Gift Cards remaining after compliance with
all applicable laws shall be shared equally between Operator and TGCC. TGCC
shall be entitled to receive excess amounts of the revenues received from the
purchasers of Mall Gift Cards as fees for its services in providing the Mall
Gift Cards. Excess amounts consist of those amounts in excess of amounts
determined to be necessary for TGCC to fulfill its obligations to purchasers
of Mall Gift Cards and the merchants that accept the Mall Gift Cards and its
obligations, if any, under applicable state laws, such as the escheat laws.
TGCC shall rely upon the advice of a national accounting and/or professional
services firm in determining such excess amounts from time to time.
2.11 Insurance; Indemnity. TGCC shall indemnify Operator and save it
harmless for, from and against any and all claims, actions, damages,
liabilities and expenses (including attorneys' and other professional fees)
arising out of, in connection with, or relating to this Agreement or the
products and services to be provided hereunder, except to the extent that
such claim, action, damage, liability or expense is caused by the gross
negligence or willful misconduct of Operator or suffered by Operator in
connection with: (i) loss of life, personal injury and/or damage to property
or the environment suffered by third parties arising from or out of the
occupancy or use by TGCC of the Property or any part thereof, occasioned
wholly or in part by any act or omission of TGCC, its agents, contractors,
invitees or employees and (ii) the misappropriation or other loss of any
funds held in any of the accounts to the extent such misappropriation or
other loss was occasioned by any act or omission of TGCC, its agents,
contractors or employees. This indemnity shall survive any termination of
this Agreement with respect to any incident occurring during the Term. At all
times on and after the date of this Agreement, TGCC shall carry and maintain,
at its expense, a (i) commercial general liability insurance policy,
including insurance against assumed or contractual liability under this
Agreement to afford protection with respect to personal injury, death or
property damage of not less than One Million Dollars ($1,000,000) per
Occurrence combined single limit and Two Million Dollars ($2,000,000) general
aggregate; (ii) all-risks property and casualty insurance policy, including
theft, written at replacement cost value and with replacement cost
endorsement, covering all personal property of TGCC located at the Property,
including without limitation, all elements of the System, including the
Components, (iii) if and to the extent required by law, worker's compensation
insurance policy, or similar insurance in form and amounts required by law.
TGCC shall continue in force its Chubb Executive Protection Policy of
insurance, or a similar policy issued by another with a Best rating equal to
Chubb's rating. Such Policy shall contain coverage for employee theft,
premises, transit, and depositor's forgery with respect to money and
securities with a limit of not less than Five Million Dollars ($5,000,000.00)
per occurrence with no aggregate limit. Commercial general liability and all
risks property and casualty insurance policies evidencing such insurance
shall, with respect to commercial general liability policies, name Operator
and/or its designee(s) as additional insured, and shall be primary and non-
contributory. The commercial general liability policy, all risks property and
casualty insurance policy and the Chubb Executive Protection Policy (or
similar) shall each contain a provision by which the insurer agrees that such
policy shall not be canceled, materially changed or not renewed without at
least thirty (30) days' advance notice to Operator by certified mail, return
receipt requested. A copy of such policies, or certificates thereof, shall be
deposited with Operator by TGCC within 30 days of the date of this agreement
being signed. Neither Operator nor TGCC shall be liable to the other Party or
to any insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage to any building, structure or other
tangible property or any resulting loss of income or losses under worker's
compensation laws even though such loss or damage might have been occasioned
by the negligence of such other Party, its agents or employees. The
provisions of this paragraph shall not limit the indemnification for
liability to third parties contained in the preceding paragraph.
2.12 Reporting. Within twenty (20) days of the end of each month, TGCC
shall provide Operator with a report showing the volume of Mall Gift Cards
issued during the preceding month and report showing gross advertising
revenue and costs if any. The Mall Gift Card report shall indicate the entire
volume of Mall Gift Cards issued, and shall have a summary of which were
issued via the Components, TGCC website or Operator website, by phone or
otherwise, for cash, credit card, debit card, check, or otherwise. The
reports shall be signed by an authorized officer or agent of TGCC. Additional
reports may be available for a fee to be negotiated.
2.13 Mall Gift Card Stock and Processing. TGCC shall be responsible for
providing to Operator, at Operators expense, as specified in ADDENDUM A, all
gift card stock necessary to generate the Mall Gift Cards. TGCC has the right
to request payment for this service prior to the ordering of materials.
Operator will bear all financial costs associated with any changes or
modifications to the Mall Gift Card or Packaging that occur throughout the
term of this agreement; provided that TGC shall have given not less than
thirty (30) days prior written notice of such change to Operator.
2.14 Laws Compliance. TGCC shall comply with all federal, state,
regional, county, municipal and other governmental statutes, laws, rules,
orders, regulations and ordinances applicable to the Mall Gift Card Program,
including, but not limited to, applicable escheat statutes.
2.15 Billing. TGCC agrees that all bills to be issued by it to Operator
shall be issued to Operator's address as shown in the first sentence of this
Agreement, or as otherwise mutually agreed.
3. ESTABLISHMENT OF ACCOUNTS AND USE OF FUNDS
3.1 Depository Account. TGCC shall establish a joint bank account with
the Operator (the "Depository Account") at a bank at or near the Property
("Local Bank") for the deposit of all receipts, whether cash, check, proceeds
of credit card or debit card transactions, or other receipts from the sale of
Mall Gift Cards. The funds deposited into the Depository Account shall be
used for refunds on credit card sales, charge backs on credit card sales,
checks returned by the bank, charges imposed by the Local Bank in connection
with the Depository Account, merchant charges associated with the credit card
sales, and transfers to the Proceeds Account. TGCC shall transfer amounts
deposited to the Depository Account (except for established reserves to cover
other items to be disbursed from the Depository Account) to the Proceeds
Account on a regular basis. Operator shall reimburse TGCC, within fifteen
(15) days of billing, all bank charges imposed on the Depository Account.
3.2 Proceeds Account. TGCC shall establish a commercial account
("Proceeds Account") at a major bank for aggregation of funds from the
Depository Accounts. In addition to the amounts transferred from the
Depository Account described in subsection 3.1 above; TGCC shall deposit the
proceeds of all sales of Mall Gift Cards not originating at the Property
(such as, but not limited to, Internet sales and corporate sales), plus
transfers from the Investment Account, described in subsection 3.5 below,
into the Proceeds Account. TGCC shall establish an interest bearing account
(the "Sweep Account') associated with the Proceeds Account. The Proceeds
Account shall be a zero balance account and all surplus amounts deposited in
that account shall be automatically transferred to and from the Sweep
Account.
3.3 Debits to the Proceeds Account. TGCC may only apply debits to the
Proceeds Account for the following purposes: (i) transferring funds to the
Investment Account described in section 3.5 below; (ii) the charges imposed
by the bank in connection with the Proceeds Account; (iii) merchant or credit
card charges associated with credit card sales, credit card refunds, charge-
backs, and returned check charges; (iv) transfers to the Depository Accounts
described in section 3.1 above; (v) transfers to the Distribution Account
described in section 3.4 below; (vi) transfers to the Sweep Account; and (vi)
transfers to the Settlement Account described in subsection 3.6 below in
sufficient amounts to cover the disbursements contemplated from that account.
TGCC may charge debits to the Sweep Account only for charges imposed by the
bank in connection with the Sweep Account and transfers to the Proceeds
Account and the Distribution Account described in Section 3.4.
3.4 Distribution Account. TGCC shall establish a checking account for
the distribution of funds (the "Distribution Account") at a credible bank.
TGCC may transfer funds from the Distribution Account when, among other
possible circumstances, (i) a refund to a purchaser of Mall Gift Cards is
required to be made, (ii) administrative and service fees are payable to
TGCC, (iii) funds are required to be turned over to a state under the
applicable escheat laws, and (vii) transfers of funds with regard to expired
Mall Gift Cards to TGCC as compensation for its services in administering the
Mall Gift Card business. The Distribution Account will be linked to the Sweep
Account in such a manner that the bank will cause the necessary funds to be
covered automatically.
3.5 Investment Account. TGCC may establish an investment account (the
"Investment Account"), to enhance earnings on funds in reserve. Funds will be
transferred by TGCC from the Proceeds Account to the Investment Account, from
time to time, as TGCC deems appropriate. TGCC shall make disbursements from
the Investment Account from time to time, as TGCC deems appropriate. Such
disbursement may only be made to the Proceeds Account. The amounts held in
the Investment Account shall be invested as directed by TGCC in Certificates
of Deposit in banks, U.S. Government backed securities, corporate paper or
Money Market Funds, i.e. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Fidelity, or Federated with a
Standard and Poors or ▇▇▇▇▇ rating of AAA or better.
3.6 Settlement Account. TGCC shall establish a Settlement account (the
"Settlement Account") at a bank designated by the program Issuing Bank,
against which all Mall Gift Cards shall be paid. All amounts deposited in the
Settlement Account shall be transferred from the Proceeds Account. Funds in
the Settlement Account will be used exclusively for settlement of Mall Gift
Card transactions.
3.7 Transfers Among Accounts. All transfers among the accounts described
in subparagraphs 3.1 through 3.6 above (other than intra-bank transfers)
shall be made electronically by ACH or wire transfer. Except for funds which
are the sole property of TGCC as set forth herein. All funds held in the
accounts established in this Article 3 shall be held for the benefit of
Operator and the merchants who are entitled to payment in connections with
the use of Mall Gift Cards. Any such funds are not the property of TGCC and
upon an event of Default shall be paid to the Operator or Merchants, as
applicable, upon redemption.
3.8 Fees and Interest. All fees charged by the banks associated with the
accounts in 3.1 through 3.6 will be paid by TGCC, and invoiced to the
Operator as appropriate. All income, interest, dividends, and other amounts
earned on all of the accounts described in sections 3.1 through 3.6 above
shall be the property of TGCC and will be distributed to TGCC. Operator and
TGCC to split Administration fees and Expiration revenue as per ADDENDUM A
Section 1.8.
3.9 Reports. TGCC shall cause the following reports to be transmitted
monthly: summary of activity by TGCC (Report of sales, banking and credit
card fees, administrative fees, payments, refunds, miscellaneous fees,
escheat or other similar payments to any governmental entity, where cards are
redeemed, fulfillment via the Call Center and Internet, inventory of Gift
Cards at TGCC fulfillment, and any other payments to TGCC).
4. AGREEMENT TERM AND TERMINATION
4.1 Term. The "Term" of this Agreement shall commence as of October 4,
2001, and shall terminate on October 3, 2004, unless earlier terminated in
accordance with the provisions hereof Operator has the option to terminate
this Agreement after the first year provided Operator shall pay to TGCC a
Termination Fee equal to 50% of the shared revenue through the Administration
Fee as agreed per ADDENDUM A Section 1.8 but not to exceed $20,000.00. Said
Termination Fee will be in addition to the agreed 50% shared revenue through
Administration Fee accumulated through the first year. Operator has the
option to terminate this Agreement after the second year. Operator shall pay
to TGCC a Termination Fee equal to 50% of the shared revenue through the
Administration Fee as agreed per ADDENDUM A Section 1.8 but not to exceed
$20,000.00. Said Termination Fee will be in addition to the agreed 50% shared
revenue through Administration Fee accumulated through the second year.
4.2 Termination. Upon the termination of this Agreement, TGCC and
Operator shall no longer issue Mall Gift Cards through the System. Unless
Operator has terminated this Agreement due to an Event of Default by TGCC in
accordance with Section 6, TGCC shall continue to process previously issued
Mall Gift Cards until the expiration date of the last Mall Gift Card issued.
In the event of termination both parties will cease distribution of Mall Gift
Cards. Outstanding Mall Gift Cards will continue to clear through the system
per Card Association Rules. TGCC and Operator shall destroy all unused gift
card stock specific to Operator in each of their possession. In any event,
TGCC continues to collect all interest, fees, and proceeds from expired Mall
Gift Cards until all issued cards expire or have a zero balance.
5. ASSIGNMENT
5.1 Assignment by Operator. Operator may delegate, assign, transfer or
encumber its rights, duties, interests or obligations under this Agreement to
any subsidiary or affiliate of Operator or to any person or entity, which
acquires ownership or management rights to the Property. No such transfer or
assignment of this Agreement shall constitute a termination of this
Agreement. In the event that the Property is acquired by a person or entity
which is not a subsidiary or affiliate of Operator (a "Third Party''),
Operator will endeavor to provide TGCC with ninety (90) day notice to the
extent possible. In any event, Operator agrees to provide TGCC with at least
thirty (30) days notice of any such sale, and use its best efforts to
maintain the use of the TGCC's System by new owner.
5.2 Assignment by TGCC. TGCC may not delegate, assign, transfer or
encumber its rights, duties, interests or obligations under this Agreement
(each an "Assignment") except with the consent of Operator. Operator agrees
that it shall not unreasonably withhold its consent to a proposed Assignment,
provided the proposed transferee: (i) possesses qualifications equivalent to
those of TGCC to operate the business operated by TGCC and shall have
demonstrated recognized experience in successfully operating such a business,
including, without limitation, experience in successfully operating a similar
quality business in a first-class shopping center; (ii) shall not adversely
affect the quality and type of business operation which TGCC has conducted
theretofore; (iii) shall continue to operate the business in the same manner
as TGCC and pursuant to all provisions of this Agreement; and (iv) assumes in
writing, in a form acceptable to Operator, all of TGCC's obligations
hereunder and TGCC shall provide Operator with a copy of such document.
Furthermore, TGCC will not transfer its stock to a transferee who does not
possess the qualities set forth in the (i)-(iv) above and in such event,
Operator shall have the options to terminate this agreement.
6. DEFAULT AND TERMINATION
The following events shall constitute an "Event of Default":
6.1 Bankruptcy. The adjudication of either Party as being bankrupt,
insolvent or unable to pay its debts and obligations as they become due or if
either Party places any of its property or assets in liquidation for the
purpose of meeting claims of its creditors or a trustee or receiver is
appointed. If any such adjudication is involuntary, it shall not be an Event
of Default hereunder if such Party is seeking to have the adjudication
dismissed and in fact causes it to be dismissed within sixty (60) days.
6.2 Failure to Perform. The failure of either Party to perform or
fulfill at the time and in the manner herein provided any duty, obligation or
condition required to be performed or fulfilled by that Party hereunder;
provided, however, that the non-performing Party shall have been given ten
(10) days written notice if such non-performance is the non-payment of money
and thirty (30) days' prior written notice for any other non-performance,
specifying the non-performance or non-fulfillment that it is charged with
having committed and shall have failed to cure such non-performance or non-
fulfillment within such ten (10) day or thirty (30) day period, as the case
may be; provided, however, in the event of a non-monetary non-performance or
non-fulfillment, which cannot reasonably be cured in thirty (30) days, there
shall not be an Event of Default, hereunder if the defaulting Party shall be
diligently pursuing the curing of such non-performance within thirty (30)
days, and in fact completes the cure within sixty (60) days from the date of
the notice. Upon the occurrence of an Event of Default, the non-defaulting
Party shall have the right to terminate this Agreement upon written notice to
the other Party. If this Agreement is terminated pursuant to this Paragraph,
the defaulting Party nevertheless shall remain liable for all damages which
may be due or sustained by the non-defaulting Party, including, but not
limited to, reasonable attorneys' fees, costs and expenses incurred by the
non-defaulting Party in pursuit of its remedies hereunder.
7. MISCELLANEOUS PROVISIONS
7.1 Applicable Law. All matters pertaining to the validity, performance,
construction or effect of this Agreement, and the legal relations between the
Parties, shall be governed by and construed in accordance with the laws of
the State of Utah applicable to agreements made and wholly to be performed in
said State without regard to principles of conflicts of law. Any disputes
arising under this Agreement or the transactions contemplated hereunder shall
be resolved in the state and federal courts residing in Salt Lake City, Utah.
7.2 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the Parties with respect to the subject matter hereof,
and supersedes all prior agreements, arrangements and understandings related
to the subject matter hereof. No representation, promise, inducement or
statement of intention has been made by either of the Parties that is not
embodied in this Agreement, and neither of the Parties shall be bound by or
be liable for any alleged representation, promise, inducement or statement of
intention that is not specifically set forth in or referred to herein.
7.3 No Joint Venture. TGCC and Operator are independent contractors. No
agency, partnership, joint venture or employee-employer relationship is
intended or created by this Agreement, and neither party shall hold itself
out in a manner that would indicate any such relationship exists in any
matter, including but not limited to, advertising.
7.4 Notice. Any notice or other communication required or permitted to
be given hereunder shall be effective upon receipt by the intended recipient
at the address indicated in the introductory paragraph above (or such other
address as either Party shall provide to the other Party by one of the means
set forth herein below). Receipt shall be deemed to have occurred upon the
earlier of (a) the date of actual receipt by the intended Party by registered
mail, (b) five (5) days after such notice is deposited in the United States
mail, certified or registered, postage prepaid and properly addressed, (c)
the date such notice is sent to the other Party by telecopy (with receipt
confirmation), provided such notice is promptly provided to the other Party
by United States mail, certified or registered, postage prepaid and properly
addressed, or (d) one (1) business day after such notice is deposited with a
recognized overnight courier service with instructions for overnight
delivery.
7.5 Force Majeure. Neither Party shall be responsible to the other Party
for non-performance or delay in performance of any of the terms, duties,
obligations or conditions contained in this Agreement due to acts of God,
acts of governments, wars, riots, strikes, accidents or other causes beyond
the control of the Parties. In no event shall financial inability excuse a
Party's performance hereunder. In the event local laws prohibit or restrain
the operation of Mall Gift Card programs so proposed by TGCC, a mall may be
eliminated from the program without altering the validity of this agreement.
7.6 Confidentiality. The Parties agree that the contents and existence
of this Agreement shall be considered confidential and shall not be disclosed
to any third person or entity by either Party except with the prior written
approval of the other Party or upon the order of a court of competent
jurisdiction.
7.7 Severability. In the event that any provision hereof shall be deemed
in violation of any applicable law, rule or regulation, or held to be invalid
by any court in which this Agreement shall be interpreted, the violation or
invalidity of any particular provision hereof shall not be deemed to affect
any other provision hereof, but this Agreement shall be thereafter
interpreted as though the particular provision so held to be in violation or
invalid were not contained herein.
7.8. Miscellaneous. The above Recitals and all Attachments Attached
hereto are deemed to be incorporated herein by reference. Notwithstanding any
rule or maxim of construction to the contrary, any ambiguity or uncertainty
in this Agreement shall not be construed against either Party based upon
authorship of any of the provisions hereof.
In witness whereof, the parties have signed this agreement as of the
date set forth above.
Operator: TGCC:
Bayer Properties Inc. The Gift Certificate Company, Inc.
a Utah Corp.
ADDENDUM A
ATTACHED TO AND FORMING A PART OF THE CONTRACT SERVICES AGREEMENT DATED
_______________, 2001 BY AND BETWEEN THE GIFT CERTIFICATE COMPANY, INC.
("TGCC") AND BAYER PROPERTIES INC.("Operator").
[**]
ADDENDUM B
Credit Card Fees: (Section 1.6 & 1.14)
The Operator agrees to pay all credit/debit card fees associated with the
issuance of Mall Gift Cards through the CTU. TGCC agrees to pay all
credit/debit card fees associated with Internet and via Telephone. The
following is a list of credit cards TGCC shall currently accept and TGCC's
current approximate merchant discount rates. These rates are subject to
change as they vary for TGCC. The current approximate discount rates are:
Visa/Card Issuer
Qualified 1.75%
Mid-qualified 2.21%
Non-qualified 2.43%
Debit Card Fees .25 cents per transaction.
Other Fees as charged by Credit Card Processor.
Operator will reimburse TGCC for all fees associated with charge-backs,
returned checks, and special processing charges at the rates charged to TGCC
on a monthly basis.
ADDENDUM C
Co-Branding Supplemental Agreement
[**]
ADDENDUM D
Property Name Location
The Summit Burmingham Highway 280 at ▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
The Summit Louisville ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[**] ALL SECTIONS MARKED WITH TWO ASTERISKS [**] REFLECT PORTIONS WHICH HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION BY NEIGHBORHOOD BOX OFFICE, INC. AS PART OF A REQUEST FOR
CONFIDENTIAL TREATMENT.
