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EXHIBIT 10.12
ALLIANCE AGREEMENT
This Alliance Agreement (the "Agreement"), effective as of the 1st day of June,
2000 (the "Effective Date"), is entered into by and between Solutions America,
Inc. ("Solutions"), a Delaware Corporation, with its principal place of business
at 600 Corporate Pointe, 12th Floor, Culver City, California 90230 and Nexxus
Holdings Ltd. ("Nexxus"), a Bahamian Company with its principal place of
business at Centreville House, 3rd Floor, Collins Avenue, P.O. Box CB 12724,
Nassau, The Bahamas.
WHEREAS, Solutions provides consulting, software development and total
e-commerce payment solutions including transaction processing services, web site
design, data base development, marketing and financial services to banks,
corporations and merchants conducting E-commerce transactions over the Internet;
WHEREAS, Nexxus provides a full range of financial services, including private
label credit and debit cards, to its clients including those engaged in
E-commerce and as a part of such services desires to provide technical
consulting services, transaction processing services and payment solutions
(including the establishment of merchant accounts) to its clients.
NOW THEREFORE, in consideration of the mutual covenants and premises set forth
below, the Parties agree as follows:
1. Definitions
1.1 "Affiliate" shall mean with respect to any person (which for
purposes of this definition shall include individual and all legal
entities), any other person directly or indirectly controlling,
controlled by, or under common control with such person. For
purposes of this definition, "control" shall mean the power to
direct or cause the direction of the management and policies of such
person whether through the ownership of voting interests, by
contract or otherwise.
1.2 "Company Information" means collectively the Confidential
Information and Trade Secrets. Company Information also includes
information which has been disclosed to the disclosing Party by a
third party, and that the disclosing Party is obligated to treat as
confidential or secret.
1.3 "Confidential Information" means any and all information related to
the services and/or business of a Party that does not constitute a
Trade Secret and that is treated as confidential or secret by the
Party (that is, it is the subject of efforts by the disclosing Party
that are reasonable under the circumstances to maintain its secrecy)
including, but not limited to, the terms and conditions of this
Agreement. Confidential Information shall not include information
(a) already lawfully known to or independently developed by the
receiving Party,
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(b) disclosed in published materials, (c) generally known to the
public, or (d) lawfully obtained from any third party without any
obligation of confidentiality.
1.4 "Joint Merchant" shall mean any entity with whom a contract for
services is entered into by either Party following an introduction,
referral or contracting relationship by the other Party.
1.5 "Party" shall mean Solutions or Nexxus.
2. Referral and Marketing Services
2.1 Subject to the terms of this Agreement, each Party hereby grants to
the other a nonexclusive right to market and refer the services
provided by the respective Party and such other services as the
Parties may subsequently agree upon (collectively, the "Services")
via any means that may be determined by each Party. Provided,
however, that in the event either Party desires to use the name or
logo of the other in any printed material for advertising or
promotion purposes, such material will be submitted to the other for
prior approval.
2.2 Each Party shall be solely responsible for all the costs and
expenses incurred for their marketing activities.
2.3 Solutions and Nexxus shall work together in good faith to develop a
joint marketing plan as well as in the implementation and
performance of each service provided under this Agreement.
3. Revenue Sharing
3.1 Solutions and Nexxus will work together to establish the pricing for
such services as may be provided to each prospective Joint Merchant.
3.2 Each Party shall establish a service fee (the "Service Fee") which
will be based on and relative to direct fees and charges paid by
that Party to third parties, including but not limited to, banks,
card associations, card processors, independent service providers,
agents and independent sales organizations (the "Bank/ISO Costs").
Each Party's Service Fee shall be the base rate to be offered to
prospective Joint Merchants for services rendered by that Party. The
difference between each Party's Service Fee and Bank/ISO Costs (the
"Net Profit") shall be shared between the Parties, with the Party
referring the client to the other Party (the "Referring Party")
receiving twenty five (25%) percent of the Net Profit.
3.3 The Service Fee, Bank/ISO Costs and Net Profit for Solutions shall
be computed in accordance with Schedule A. The Service Fee, Bank/ISO
Costs and Net Profit for Nexxus shall be computed in accordance with
Schedule B.
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3.4 Service Fees may be adjusted from time to time based on Bank/ISO
Costs incurred and also on the unique circumstances and attributes
of each Joint Merchant.
3.5 Each Party will report monthly to the other all such transaction
which may be subject to this Agreement, including full disclosure of
Bank/ISO Costs incurred.
4. Intellectual Property Rights
4.1 Solutions owns or otherwise controls all rights, title and interest
in and to the services it provides, and all patents, trademarks,
copyrights, trade secrets, promotional materials and endorsements
that may be developed, used or licensed to Nexxus in connection with
Solutions' services, that may be subject to the referral and
marketing rights granted to Nexxus hereunder;
4.2 Neither the granting of the rights and privileges granted hereunder
or the exercise thereof by Nexxus in accordance with the terms of
this Agreement will infringe or otherwise violate the proprietary
rights of any person or entity under any patent, trademark,
copyright, trade secret or otherwise.
5. Provider of Choice
5.1 Nexxus agrees to make Solutions its provider of choice for all
E-commerce transaction processing and related services that may be
required for its new clients that meet or exceed the business
requirements that may be imposed from time to time by Solutions for
their acceptance of such clients. Nexxus agrees to use its best
efforts to introduce each such client to Solutions for Solutions'
review and competitive pricing.
5.2 Solutions agrees to make Nexxus its provider of choice for all
credit card or debit card services that may be required for its
clients and banking relationships that meet or exceed the business
requirements that may be imposed from time to time by Nexxus for
their acceptance of such clients or banking relationships. Solutions
agrees to use its best efforts to introduce each such client or bank
to Nexxus for Nexxus' review and competitive pricing.
5.3 The failure of either Party to comply with this Section shall not
create a default in the Agreement or a breach of contract. It being
only the intent of the Parties to acknowledge the services of the
other to their respective clients when appropriate in presenting
their respective business opportunities.
6. Terms and Termination
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6.1 This Agreement is effective from the date hereof and shall continue
for a term of three (3) years (the "Initial Term") unless sooner
terminated as provided in this Agreement. Thereafter, this Agreement
shall be automatically renewed for consecutive two (2) year periods
(a "Renewal Term") unless either Party gives the other written
notice of non-renewal at least sixty (60) days prior to the
expiration date of the then-current term.
6.2 Either Party may terminate this Agreement upon sixty (60) days
written notice thereof to the other Party upon breach by the other
Party of any of its representations, warranties, covenants or
agreements contained in this Agreement.
6.3 Notwithstanding the above, if the offending breach or breaches upon
which such notice of termination is based shall have been addressed
to the reasonable satisfaction of the offended Party within thirty
(30) days upon written acknowledgement of such satisfaction, then
the notice of termination shall be rescinded, and this Agreement
shall be deemed to continue in full force and effect.
6.4 Immediately upon termination by either Party, whether by expiration
or otherwise, either Parties' obligation to provide services
hereunder shall immediately cease, and any unpaid amounts due and
owing by each Party shall become immediately due and payable. The
foregoing notwithstanding, either Party will continue to provide
services to existing Joint Merchants for a reasonable period
necessary to transfer the accounts to another provider of the other
Party's choice. However, in the event that a Joint Merchant decides
to retain the services of one of the Parties, even after termination
of this Agreement, the Parties shall continue to share revenues
generated by the Joint Merchant as if this Agreement had not been
terminated.
6.5 Payment for any services rendered or any other obligation of
liability owing at the time of termination or which becomes owing
under this Agreement whether or not such obligations arise prior to
or after the termination date shall not be affected by termination
of this Agreement.
6.6 Each Party shall provide all reasonable assistance to transfer the
other's Joint Merchant Accounts to another provider, provided,
however, that all costs of transfer shall be at the sole expense of
the Party retaining the Joint Merchant.
7. Confidentiality
Each Party acknowledges that its Company Information may be disclosed to
the other Party during the course of this Agreement. Each Party agrees
that it shall use the other's Company Information solely for purposes of
the Agreement and to take reasonable steps, which shall include, at
minimum, the steps it takes to protect its
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own Company Information, to prevent the duplication or disclosure of the
other's Company Information, other than by or to its employees or agents
who must have access to the Company Information to perform such Party's
obligations hereunder, who shall each agree to be bound by similar
confidentiality obligations. Each Party agrees that if it is required by
law, regulation, or order of any governmental body or regulatory authority
to disclose to the other Party, make a reasonable effort to obtain a
protective order requiring that the Company Information so disclosed be
used only for the purposes for which disclosure is required and allow the
disclosing Party to participate in the proceeding. Each Party shall
protect the other Party's Company Information in accordance with this
Section 7 during the Initial or Renewal Terms and for two (2) years after
the termination of this Agreement.
8. Limitation of Liability
In no event shall either Party be liable to the other Party for any loss
of profits, loss of business, loss of use or data, interruption of
business, or for indirect, special , incidental, exemplary, multiple,
punitive, or consequential, damages of any kind, whether based on
contract, tort (including without limitation, negligence), warranty,
guarantee or any other legal or equitable grounds, even if such Party has
been advised of the possibility of such damages. Neither Party shall make
representations or warranties to any end user or third Party by the other
Party. These limitations shall survive and apply notwithstanding the
validity of the limited remedies provided for in the Agreement. The
limitations set forth in this Section 8 shall not apply to the parties'
indemnification obligations set forth in Section 10 below or to the
parties injunctive relief set forth in Section 11 below.
9. Disclaimer
Except as expressly set forth in this Agreement, neither Party makes, and
each Party hereby specifically disclaims, any representations or
warranties, express or implied, regarding Solutions' services or Nexxus'
services or otherwise relating to the Agreement, including any implied
warranty of Merchantability or fitness for a particular purpose and
implied warranties arising from course of dealing or course of
performance.
10. Indemnity
10.1 Each Party agrees to indemnify, defend and hold harmless the other
Party and its officers, directors, employees, agents, successors and
assigns from and against any and all losses, liabilities, damages,
penalties and claims and all related costs and expenses (including
reasonable attorney's fees) related to claims made by third parties
against the indemnified Party alleging that the indemnifying Party's
intellectual property infringe the patents, copyrights, trademarks,
or service marks or other intellectual property rights of such third
parties.
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10.2 Each Party agrees to promptly notify the indemnifying Party in
writing of any indemnifiable claim. The indemnified Party shall
cooperate in all reasonable respects with the indemnifying Party and
its attorneys in the investigation, trial, defense and settlement of
such claim and any appeal arising therefrom, through its attorneys
or otherwise, at it own cost and expense. No settlement of a claim
shall be entered into without the consent of the indemnified Party,
which consent will not be unreasonably withheld, unless the
settlement includes an unconditional general release of the
indemnified Party.
11. Injunctive Relief
The Parties hereby agree and acknowledge that violation by one Party of
the provisions of Section 3 and 4 may cause irreparable harm to the other
Party not adequately compensable by monetary damages. In addition to other
relief, it is agreed that temporary and permanent injunctive relief shall
be available to the parties to prevent any actual or threatened violation
of such provisions as provided by law.
12. Independent Contractor
No Party nor any of its officers, employees, agents or representatives is
an employee or agent of any other Party for any purpose whatsoever.
Rather, each Party is and shall at all times remain an independent
contractor.
13. Force Majeure
Neither Party shall be liable under this Agreement for non-performance
caused by events or conditions beyond the Party's control, if the Party
makes reasonable efforts to perform.
14. Notice
All notices, requests, instructions, consents and other communications to
be given pursuant to this Agreement shall be in writing and shall be
deemed received (i) on the same day if delivered in persons, by same-day
courier or by telegraph, telex or facsimile transmission, (ii) on the next
day if delivered by overnight mail or courier, or (iii) on the date
indicated on the return receipt, or if there is no such receipt, on the
third calendar day (excluding Sundays) if delivered by certified or
registered mail, postage prepaid, to the Party for whom intended to the
addresses listed on the first page of this Agreement. Notices shall be
sent as follows:
If to Solutions America, Inc.:
Floyd W. Kephart, Chairman
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Solutions America, Inc.
600 Corporate Pointe, 12th Floor
Culver City, CA 90230
With a copy to:
Michael Bales
Greenberg, Glusker Fields Claman & Machtinger LLP
1900 Ave. of the Stars, Suite 2100
Los Angeles, CA 90067
If to Nexxus:
Andrew G. Gape, President
Nexxus Holdings Ltd.
Centreville House
3rd Floor
Centreville House
Collins Avenue
P.O. Box CB-12724
Nassau, The Bahamas
15. Entire Agreement
This Agreement contains the entire understanding of the parties with
respect to the subject matter thereof and supersedes all prior Agreements
and understanding, whether written or oral, between them with respect to
the subject matter hereof.
16. Amendment
No amendment of this Agreement shall be effective unless embodied in a
written instrument executed by all of the parties.
17. Waiver of Breach
The failure of any Party hereto at any time to enforce any of the
provision of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor in any way to affect the validity of
this Agreement or any provisions thereof or the right of any Party hereto
to thereafter enforce each and every provision of this Agreement. No
waiver of any breach of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the Party
against whom or which enforcement of such waiver is sought; and no waiver
of any such breach shall be construed or deemed to be a waiver of any
other or subsequent breach.
18. Binding Effect
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This Agreement shall be binding on and inure to the benefit of the parties
hereto and their respective heirs, representatives, successors and
assigns.
19. Governing Law
This Agreement shall be governed by and construed in accordance with the
internal substantive and procedural laws of the Commonwealth of The
Bahamas without regard to conflict of laws principles.
20. Severability
All of the provisions of this Agreement are intended to be distinct and
severable. If any provision of this Agreement is or is declared to be
invalid or unenforceable in any jurisdiction, it shall be ineffective in
such jurisdiction only to the extent of such invalidity or
unenforceability. Such invalidity or unenforceability shall not affect
either the balance of such provision, to the extent it is not invalid or
unenforceable, or the remaining provisions hereof, nor render invalid or
unenforceable such provision in any other jurisdiction.
21. Assignment
This Agreement shall be binding on the parties and on their successors and
assigns. Except as expressly provided herein, neither Party shall
transfer, assign or subcontract any right or obligation hereunder without
the prior written consent of the other Party, which consent shall be not
unreasonably withheld; provided, however, that consent shall not be
required (i) in connection with any assignment to an entity that acquires
all or substantially all of a Party's assets, voting stock or business (an
"Acquisition"); or (ii) to an Affiliate of a Party.
22. Heading
The headings of sections and subsections have been included for
convenience only and shall not be considered in interpreting this
Agreement.
23. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which together shall
constitute one and the same Agreement. This Agreement may be executed and
delivered via electronic facsimile transmission with the same force and
effect as if it were executed and delivered by the parties simultaneously
in the presence of the other.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
as of the Effective Date set forth above.
SOLUTIONS AMERICA, INC. NEXXUS HOLDINGS LTD.
By: By:
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Name: Name:
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Title: Title:
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