SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) December 23, 1999
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ELECTRONIC BUSINESS SERVICES, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 2-96392-A 65-0952956
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(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
FORMATION)
1800 NW 49TH STREET, SUITE 100, FORT LAUDERDALE, FLORIDA 33309
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (954) 229-5100
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(FORMER NAME OR FORMER ADDRESS, IF CHANGES SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
On December 23, 1999, QuickCREDIT Corp., a Florida corporation and
wholly owned subsidiary of Electronic Business Services, Inc. ("QCC"), and
BrandDirect Marketing, Inc. ("BrandDirect") entered into an agreement
("Agreement") for the sale and marketing by BrandDirect of two products offered
by QCC. The two products to be marketed and sold by BrandDirect are a credit
monitoring product that provides basic credit reporting (single and three-bureau
merged reports), credit monitoring, consumer credit counseling, and privacy
information components (the "Credit Reporting Product") and a credit card
protection product that provides for the systematic cancellation of lost or
stolen credit cards, the provision of emergency cash and other related services
(the "Card Registration Product"). BrandDirect will market the products to bank
card and oil card customers as potential benefits in a membership service to be
created by BrandDirect (the "Club").
Pursuant to the Agreement, BrandDirect is responsible for the design
and preparation, subject to QCC's approval, of all marketing and sales materials
used by BrandDirect to market or describe the products, including product
packaging, marketing brochures, scripts and related information and for
marketing the Club through direct mail and telemarketing sales efforts. Product
orders will be delivered to QCC either directly from the Club members or through
BrandDirect. QCC has responsibility for all aspects of product fulfillment and
product delivery including the design and preparation, subject to BrandDirect
approval, of all registration materials and other reports and fulfillment
materials to be delivered to Club members that purchase either or both of the
products.
Beginning February 1, 2000 and ending June 16, 2000, or such shorter
period as BrandDirect may elect (the "Test Period"), BrandDirect will market the
Products to bank card and oil card customers for the purpose of assessing the
feasibility of further roll-out of the Products to begin during or immediately
after the Test Period. BrandDirect may elect not to roll-out the Products
following the test period, and terminate the Agreement if the data collected
during the Test Period indicates that (i) inbound telemarketing calls result in
sales per hour of less than 2.0 with a retention rate of less than 35% and (ii)
outbound telemarketing calls result in sales per hour of less than 1.2 with a
retention rate of less than 35%. If BrandDirect elects to roll-out the Products,
QCC and BrandDirect will use their good faith efforts to agree upon (i) a
minimum monthly revenue guaranty to QCC by BrandDirect for new product sales and
renewals for the first twelve (12) calendar months immediately thereafter and
(ii) exclusivity protection for both BrandDirect and QCC for the term of this
Agreement following the roll-out date. BrandDirect guarantees that QCC will
receive a minimum of $300,000 of gross revenues from sales by BrandDirect of the
Credit Reporting Product and Card Registration Product during the Test Period.
Such guaranteed minimum revenue is to be paid in unequal installments on the
first day of each month of the Test Period in accordance with the schedule
provided in the Agreement.
Electronic Business Services, Inc. is the guarantor of QCC's
obligations under the Agreement.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
(i) Agreement entered into by and between QuickCREDIT Corp. and
BrandDirect Marketing, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly authorized and caused the undersigned to sign this
Report on the Registrant's behalf.
ELECTRONIC BUSINESS SERVICES, INC.
By: /s/ HAROLD S. FISCHER
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Harold S. Fischer
Chief Executive Officer and President
Dated: December 23, 1999
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EXHIBIT
AGREEMENT
This Agreement (the "Agreement") is entered into by and between
QuickCREDIT Corp., a Florida corporation having its principal offices located at
1800 N.W. 49th Street, Suite 100, Fort Lauderdale, Florida 33309 ("QCC") and
BrandDirect Marketing, Inc., a Delaware corporation having its principal offices
located at 4 Corporate Drive, Shelton, Connecticut 06484 ("BrandDirect").
RECITALS
WHEREAS, QCC is in the business of and has expertise in (i) operating a credit
reporting service and related data collection and reporting service (the "Credit
Reporting Product") and (ii) operating a credit card protection service that
provides for the systematic cancellation of lost or stolen credit cards, the
provision of emergency cash and other related services (the "Card Registration
Product") (both the Credit Reporting Product and the Card Registration Product
individually referred to herein as a "Product" and collectively as the
"Products"); and
WHEREAS, QCC and BrandDirect desire to enter into an agreement for the purpose
of permitting BrandDirect to offer the Products as potential benefits in a
membership service to be created by BrandDirect under the working name of
"InfoProtect" (the "Club"); and
WHEREAS, QCC and BrandDirect wish to divide their respective responsibilities
with respect to the sales, marketing, delivery and operation of the Products as
a potential benefit of the Club in accordance with the provisions of this
Agreement.
NOW THEREFORE, upon the promises and premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which each of
QCC and BrandDirect hereby acknowledges, QCC and BrandDirect hereby agree to the
following terms and conditions:
1. PRODUCTS. The Credit Reporting Product shall have the features set
forth on EXHIBIT A attached hereto and incorporated herein by this reference.
The Card Registration Product shall have the features set forth on EXHIBIT B
attached hereto and incorporated herein by this reference.
2. TERM. The term of this Agreement shall begin on the date of its
execution and shall remain in effect until terminated in accordance with this
Section 2, Section 7 or Section 17 of this Agreement. If this Agreement is not
terminated pursuant to Section 7, this Agreement shall remain in effect for a
period of twelve (12) calendar months following the Roll-out Date (defined in
Section 7) unless earlier terminated pursuant to Section 17. Thereafter this
Agreement shall be self-renewing annually on the anniversary of the Roll-out
Date (the "Renewal Date") for additional one (1) year terms on the same terms
and conditions as originally provided herein, unless (i) either party provides
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written notice to the other party of its intention not to renew this Agreement
at least one hundred twenty (120) days prior to the Renewal Date, time being the
essence hereof or (ii) this Agreement is terminated in accordance with the
provisions of Section 17. Following the termination or expiration of this
Agreement, QCC will continue to support each Product sold and each Product
renewal occurring during the last year of the initial term or of any renewal
term of this Agreement for a period of one (1) year from the date of such
Product sale or Product renewal.
3. REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS.
a. Each of the parties hereto represents, warrants and covenants to the
other that it has been duly authorized and has full corporate power and
authority to enter into this Agreement and to provide or arrange for the
provision of the services described herein for which such party has
responsibility and that it will do so in accordance with the terms of this
Agreement and the exhibits attached hereto. Each party will identify one manager
to focus as a liaison between the parties. Both liaisons will be available for
periodic performance and relationship reviews. In the event that a party's
liaison leaves the employ of the party or is otherwise unavailable to act as
liaison, such party will promptly appoint a substitute and notify the other
party of the identity of the substitute.
b. Each of the parties hereto represents, warrants, and covenants to
the other that (i) it currently complies, and that throughout the term of this
Agreement and any survival period its performance under this Agreement shall
comply, with all relevant federal, state, and local laws, rules and regulations
applicable to it and the Products, including, but not limited to, the Fair
Credit Reporting Act ("FCRA") and (ii) there is no pending investigation or
proceeding by or before any governmental agency, including the Federal Trade
Commission, its business practices or the Products.
c. QCC represents, warrants, and covenants to BrandDirect that
throughout the term of this Agreement and any survival period:
(i) Its activities under this Agreement will not infringe or violate
the rights of any third party or the terms of any agreement (including any
agreement with any of the Credit Repositories) (as defined in Section 5.a.);
(ii) It possesses agreements with the Credit Repositories permitting
QCC to perform its obligations under this Agreement (the "Credit Repository
Agreements"), each of which is in full force and effect. QCC agrees that it will
not supplement, modify, amend, renew or extend any of the Credit Repository
Agreements in a manner that adversely affects BrandDirect's rights under this
Agreement and will provide a copy of such agreements to BrandDirect upon demand;
provided, that QCC may redact from such agreements any information deemed to be
confidential and/or proprietary by QCC, in its discretion;
(iii) Neither any of the Credit Repositories nor QCC is known by QCC to
be in breach of any of the terms and conditions of the Credit Repository
Agreements, and QCC does not know of any facts or circumstances which, with the
giving of notice and/or the passage of time, or both, would constitute a breach
of the terms and conditions of the any of the Credit Repository Agreements;
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(iv) No dispute between QCC and any of the Credit Repositories with
respect to any of the Credit Repository Agreements is presently pending; and
(v) QCC is not aware of any potential dispute with respect to the
Credit Repository Agreements.
(vi) QCC shall provide to BrandDirect in a timely manner such
information, materials, consultation and reasonable legal advice necessary to
permit BrandDirect to identify and comply with the provisions of the FCRA
implicated by the performance of BrandDirect's obligations hereunder and the
marketing and operation of the Club.
d. BrandDirect represents, warrants and covenants to QCC that
throughout the term of this Agreement and any survival period its activities
under this Agreement will not infringe or violate the rights of any third party
or the terms of any agreement.
e. Each party hereto shall promptly notify the other in writing of any
facts or circumstances which, with the giving of notice and/or the passage of
time, or both, would cause any of such party's representations and warranties to
be incorrect or misleading in any material respect.
4. BRANDDIRECT RESPONSIBILITIES.
a. The Credit Reporting Product.
BrandDirect shall be responsible for the design and preparation of
all marketing and sales materials used by BrandDirect to market or describe the
Credit Reporting Product, including product packaging, marketing brochures,
scripts and related information ("Credit Reporting Marketing Collateral"), shall
have responsibility for marketing the Club (which responsibility shall include,
without limitation, managing the relationship with its clients and establishing
a telemarketing sales effort designed to promote the Club; provided, however,
that QCC will be responsible for ensuring that all such Credit Reporting
Marketing Collateral delivered to QCC not less than forty-five (45) calendar
days before initial use or redistribution following any alteration contains all
disclosures required by state or federal law to be given with respect to the
Credit Reporting Product, including those disclosures required by the FCRA. The
Credit Reporting Marketing Collateral shall in each case prior to initial use be
subject to the review by and approval of, for accuracy, QCC and, to the extent
contractually required, any or all of the Credit Repositories, and QCC and the
Credit Repositories, to the extent contractually required, shall have the right
to review and approve, for accuracy, any subsequent alteration(s) thereto;
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provided that QCC and the Credit Repositories shall complete their review and
return the materials and any comments to BrandDirect within forty-five (45) days
of receipt by the Credit Repositories (which delivery and receipt shall take
place not later than five (5) business days from the date of receipt of such
materials by QCC), and further provided that minor modifications to solicitation
materials and telemarketing scripts shall not be subject to further review by
QCC and the Credit Repositories. QCC will be responsible for determining whether
consent of the Credit Repositories is required and for obtaining such consent.
"Minor modifications" shall mean modifications which do not change the substance
or meaning of the material, do not materially alter the character of the
solicitation, and do not modify any previously approved reference to any Credit
Repository or to Credit Repositories in general or which contain no reference to
any Credit Repositories. For purposes of fulfilling orders by members of the
Club, BrandDirect shall either direct its members to contact QCC directly
(including by business reply card) or provide material and/or media which
contains all necessary new customer information to QCC. "All necessary new
customer information" may include, without limitation, the name, address,
telephone number, membership number, mother's maiden name, date of birth, social
security number, type of service, effective date, and cost of service but shall
in all cases contain such information that QCC identifies as necessary to permit
QCC to fulfill the Product order, to comply with the requirements of the FCRA
and other applicable laws, and to allow QCC to otherwise fulfill its obligations
under this Agreement. BrandDirect shall provide to QCC appropriate information
requested by QCC on all aspects of the Credit Reporting Product under the
control of BrandDirect as mutually agreed upon by QCC and BrandDirect. The
responsibilities of BrandDirect under this Section 4.a. shall be provided at
BrandDirect's sole cost and expense.
b. The Card Registration Product.
BrandDirect shall be responsible for the design and preparation of
all marketing and sales materials used by BrandDirect to market or describe the
Card Registration Product, including product packaging, marketing brochures,
scripts and related information ("Card Registration Marketing Collateral"),
shall have responsibility for managing the relationship with its clients and
shall be responsible for establishing a telemarketing sales effort designed to
promote the Club which effort shall include, without limitation, the provision
whether directly or through a third party contractor, all aspects of the
telemarketing sales effort; provided, however, that QCC will be responsible for
ensuring that all such Card Registration Marketing Collateral delivered to QCC
not less than forty-five (45) calendar days before initial use or redistribution
following any alteration contains all disclosures required by state or federal
law to be given with respect to the Card Registration Product. The Card
Registration Marketing Collateral shall in each case prior to initial use be
subject to the review by and approval of, for accuracy, QCC and, to the extent
contractually required, any or all of the Credit Repositories, and QCC and the
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Credit Repositories, to the extent contractually required, shall have the right
to review and approve, for accuracy, any subsequent alteration(s) thereto;
provided that QCC and the Credit Repositories shall complete their review and
return the materials and any comments to BrandDirect within forty-five (45) days
of receipt by the Credit Repositories (which delivery and receipt shall take
place not later than five (5) business days from the date of receipt of such
materials by QCC), and further provided that minor modifications to solicitation
materials and telemarketing scripts shall not be subject to further review by
QCC and the Credit Repositories. QCC will be responsible for determining whether
consent of the Credit Repositories is required and for obtaining such consent.
"Minor modifications" shall mean modifications which do not change the substance
or meaning of the material, do not materially alter the character of the
solicitation, and do not modify any previously approved reference to any Credit
Repository or to Credit Repositories in general or which contain no reference to
any Credit Repositories. For purposes of fulfilling orders by members of the
Club, BrandDirect shall either direct its members to contact QCC directly
(including by business reply card) or provide material and/or media which
contains all necessary new customer information to QCC. "All necessary new
customer information" may include, without limitation, the name, address,
telephone number, membership number, mother's maiden name, date of birth, social
security number, type of service, effective date and cost of service but shall
in all cases contain such information that QCC identifies as necessary to permit
QCC to fulfill the Product order, to comply with the requirements of the FCRA
and other applicable laws, and to allow QCC to otherwise fulfill its obligations
under this Agreement. BrandDirect shall provide to QCC appropriate information
requested by QCC on all aspects of the Card Registration Product under the
control of BrandDirect as mutually agreed upon by QCC and BrandDirect. The
responsibilities of BrandDirect under this Section 4.b. shall be provided at
BrandDirect's sole cost and expense.
c. The Club
BrandDirect will be responsible for forming, operating and
marketing the Club, including providing customer service for all benefits other
than the Products. BrandDirect may determine in its discretion the nature,
timing, duration and terms of the Club, the benefits to be included in the Club
(including the Products), the marketing of the Club, the launch date for the
Club and the duration of the Club. BrandDirect may also determine in its
discretion the order process, if any, to be complied with by members (new and
renewal) in order to receive the Products. BrandDirect and QCC agree to work
together to develop an appropriate and cost-effective system by which
communications from members (telephone and mail) are received by the proper
party in a timely manner. Any change requested by BrandDirect to the benefits
included in the Products, the order process or the process for delivery of the
Products, to the extent such changes require additional development effort or
other costs or expense to QCC shall be treated as a Product change in accordance
with Exhibits A and B and the cost and expense to QCC dealt with accordingly.
5. QCC RESPONSIBILITIES.
a. The Credit Reporting Product.
QCC shall be responsible for providing the Credit Reporting
Product and customer service with respect thereto to members of the Club (i) in
a competent, professional and timely (to be established by mutual agreement)
manner, (ii) in accordance with the Credit Reporting Product description
contained in EXHIBIT A, (iii) in accordance with the performance standards set
forth in EXHIBIT D attached hereto and incorporated herein by this reference,
and (iv) in compliance with all applicable laws, rules and regulations,
including the FCRA. "Customer Service" shall include enrollment, fulfillment
(including printing, mailing and postage), services made necessary by a member's
cancellation, receiving customer inquiries and complaints relating to the
Products and responding to the same and other services required by the FCRA. QCC
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shall be further responsible for managing all aspects of the subcontractor
relationships and agreements required to perform its obligations hereunder
(including, without limitation, the contracts with Equifax, TransUnion
Corporation and Experian (the "Credit Repositories")) and the payment to such
subcontractors of all fees for services performed thereunder. In addition, QCC
shall be responsible for providing customer access to credit counseling services
through a call transfer system that will connect customers with the National
Consumer Credit Counseling Service during the available business hours of such
organization or, if outside of the available business hours, will provide the
requesting customer with the toll free telephone number of such organization.
The responsibilities of QCC under this Section 5.a. shall be provided at QCC's
sole cost and expense.
b. The Card Registration Product
QCC shall be responsible for providing the Card Registration
Product and customer service with respect thereto to members of the Club (i) in
a competent, professional and timely (to be established by mutual agreement)
manner, (ii) in accordance with the Card Registration Product description
contained in EXHIBIT B, (iii) in accordance with the performance standards set
forth in EXHIBIT D, and (iv) in compliance with all applicable laws, rules and
regulations. For purposes of facilitating delivery of lost or stolen card
service, QCC shall, upon receipt of customer authorization acceptable to QCC,
gather a credit report from one of the three Credit Repositories in order to
identify for the customer the credit cards shown by such credit repository as
being held by the customer. "Customer Service" shall mean enrollment,
fulfillment, services made necessary by a member's cancellation, and receiving
customer inquiries and complaints relating to the Products and responding to the
same. With respect to any credit card cancelled pursuant to a customer request,
QCC shall deliver to the customer, via First Class United States Mail, written
notice identifying the credit cards so canceled by QCC following receipt of a
request by customer for such action. For the purpose of taking sales orders of
the Card Registration Product, for registering customers and for allowing
immediate access by the customer to QCC for the purpose of canceling lost or
stolen credit cards belonging to such customer, QCC shall be responsible for
providing and staffing a call center necessary to permit the call center to
efficiently and effectively carry out its intended function in accordance with
the standards contained in EXHIBIT D. QCC shall be responsible for managing all
aspects of the subcontractor relationships and agreements required to perform
its obligations hereunder and the payment to such subcontractors of all fees for
services performed thereunder. The responsibilities of QCC under this Section
5.b. shall be provided at QCC's sole cost and expense.
c. Member Materials
QCC shall be responsible for the design and preparation, after
consultation with BrandDirect and subject to BrandDirect's review and prior
approval, of the form of all registration materials and other reports and
fulfillment materials to be delivered to members by QCC with respect to the
Products. QCC shall also be responsible for ensuring that all such materials
contain all disclosures required by state or federal law to be given with
respect to the Products, including those required by the FCRA.
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d. Grant of License
QCC hereby grants to BrandDirect during the term and any survival
period a non-exclusive license and right to use the QCC trademarks in and in
connection with the marketing, promotion and operation of the Club subject to
the terms and conditions of this Agreement; provided, however, that QCC shall
have the right to approve all materials in which any QCC trademark is
incorporated prior to the use or dissemination of such materials. QCC represents
and warrants that its trademarks are its sole property; it has the right to
grant the license and right to use such trademarks as provided herein; and
BrandDirect's use of such trademarks in accordance with this Agreement will not
violate, conflict with, or infringe upon any rights (including, without
limitation, trademark, copyright, common law, or statutory rights) of any
person.
e. Security
(i) BrandDirect Responsibilities. For BrandDirect outbound or
inbound telemarketing sales, BrandDirect agrees to strictly adhere to the
procedures and controls established by QCC and the Repositories and delivered to
BrandDirect for the purpose of verifying the identity of persons obtaining the
Products through the BrandDirect telemarketing sales effort. Such procedures and
controls shall include, without limitation, (x) causing all employees, agents
and independent contractors of BrandDirect to strictly follow the telemarketing
sales scripts prepared by BrandDirect and approved by QCC and the Credit
Repositories, (y) maintaining an audio recording of the identity verification
portion of each outbound telemarketing Product sale on a media agreed to by QCC
and (z) delivering to QCC a copy of the audio recording of identity verification
for each such BrandDirect telemarketing Product sale within five (5) business
days of the date of such sale. BrandDirect represents and warrants to QCC that
it will strictly adhere to the procedures set forth in this Section 5(e)(i) then
in effect in connection with all BrandDirect Product sales.
(ii) QCC Responsibilities. In connection with all Product
sales, whether transacted with the consumer by BrandDirect or QCC, QCC agrees to
implement sufficient procedures and controls to comply with applicable law
(including the FCRA), to communicate those procedures and controls applicable to
BrandDirect in accordance with (i) above and to assure that credit reports are
timely delivered only to those individuals whose identity has been verified by
BrandDirect or QCC, as the case may be, as being the subject of the report and
to no other person and to take measures reasonably calculated to detect and
prevent fraud in connection with such Product orders. In no event will QCC have
any obligation to provide any report if QCC determines that providing such
report may cause QCC to violate the provisions of the FCRA or any other
applicable federal or state law or any of its agreements with any of the Credit
Repositories.
f. Reporting
During the term of this Agreement, QCC shall provide BrandDirect
with detailed written reports in a format to be agreed upon by the parties. The
purpose of such reports shall be to enable BrandDirect and QCC to confirm
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Product sales, usage, service quality, and legal and contractual compliance. The
timing of such reports shall be agreed to by the parties, but in no event shall
reports be provided less frequently than weekly.
6. PRODUCT PRICING.
The prices to be charged to BrandDirect by QCC for each of the
Products delivered to a member of the Club during the term of this Agreement or
any survival period shall be as set forth on EXHIBIT C attached hereto and
incorporated herein by this reference. Any adjustment or change to the prices
contained on EXHIBIT C shall be effective only to the extent such change is
approved in writing by each of QCC and BrandDirect in their discretion.
7. TEST PERIOD.
a. Length of Period.
From February 1, 2000 through June 16, 2000, or such shorter period as
BrandDirect may elect (the "Test Period"), BrandDirect shall market the Products
to bank card and oil card customers for the purpose of assessing the feasibility
of further roll-out of the Products to begin during or immediately after the
Test Period.
b. Acceptance Criteria.
During the Test Period BrandDirect shall actively market the
Products and collect such data and perform such analysis as BrandDirect requires
in its sole discretion. BrandDirect may elect not to roll-out the Products
following the test period, and terminate this Agreement if the data collected
during the Test Period indicates that (i) inbound telemarketing calls result in
sales per hour of less than 2.0 with a retention rate of less than 35% and (ii)
outbound telemarketing calls result in sales per hour of less than 1.2 with a
retention rate of less than 35%. If BrandDirect elects to terminate this
Agreement pursuant to this Section 7, it shall deliver notice of termination to
QCC ("Test Termination Notice") within thirty (30) days following the last day
of the of the Test Period. Such termination notice shall be effective thirty
(30) days from the date of receipt by QCC. If BrandDirect elects to roll-out the
Products, within ten (10) days of the last day of the period for delivering Test
Termination Notice or such earlier time as mutually agreed to by the parties,
QCC and BrandDirect shall use their good faith efforts to agree upon (i) a
minimum monthly revenue guaranty to QCC by BrandDirect for new Product Sales and
renewals for the first twelve (12) calendar months immediately thereafter and
(ii) exclusivity protection for both BrandDirect and QCC for the term of this
Agreement following the Roll-out Date. As the term is used herein, "Roll-out
Date shall mean the first day of the twelve (12) calendar month period for which
the minimum monthly revenue guaranty is agreed to pursuant to this Section 7.b.
c. Minimum Revenue Guaranty.
BrandDirect guarantees that QCC will receive a minimum of $300,000 of
gross revenues from Product Sales during the Test Period (the "Minimum Revenue
Guaranty"), provided that QCC has performed its material obligations under this
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Agreement. Each full or partial calendar month during the Test Period during
which a part of the Minimum Revenue Guaranty is payable is referred to herein as
a "Minimum Revenue Period" and shall be divided in accordance with the following
table:
MINIMUM REVENUE PERIODS AND GUARANTY PAYMENTS
February 1, 2000 to February 28, 2000 $37,500
March 1, 2000 to March 31, 2000 $75,000
April 1, 2000 to April 30, 2000 $75,000
May 1, 2000 to May 31, 2000 $75,000
June 1, 2000 to June 16, 2000 $37,500
If BrandDirect generates gross revenue to QCC from Product Sales in
excess of the amount of the Minimum Revenue Guaranty paid to QCC during any
Minimum Revenue Period ("Excess Product Sales"), QCC shall invoice BrandDirect
at the end of such period only that dollar amount equal to the difference
between (i) the dollar amount of the payment required to be delivered to QCC in
payment of the Product price in accordance with Section 8 and Exhibit C for each
Product sold during the period and (ii) the amount of the Minimum Revenue
Guaranty payment delivered that period. If BrandDirect fails to generate gross
revenues from Product Sales during any Minimum Revenue Period equal to or
greater than the portion of the Minimum Revenue Guaranty payment due for such
period ("Sales Shortfall"), QCC shall accept such portion of the Minimum Revenue
Guaranty delivered during such period in full satisfaction of the payment
required to be delivered to QCC for the Product price in accordance with Section
8 and Exhibit C for each Product sold during the period. Excess Product Sales
occurring during any Minimum Revenue Period may be credited against Sales
Shortfalls taking place in any prior or subsequent Minimum Revenue Period. The
Sales Shortfall occurring during any Minimum Revenue Period may be credited
against Excess Product Sales taking place in any prior or subsequent Minimum
Revenue Period. For the purpose of the foregoing sentence, on the last day of
the Test Period if gross revenue from Product Sales during the Test Period is in
excess of $300,000, QCC shall credit back to BrandDirect against the final
invoice for the Test Period that dollar amount equal to the difference between
(x) the aggregate dollar amount of all Minimum Revenue Guarantee payments
received during any period in which a Sales Shortfall occurred and (y) the
dollar amount of the payment required to be delivered to QCC in payment of the
Product price in accordance with Section 8 and Exhibit C for each Product sold
during each such Sales Shortfall period. All minimum revenue guaranty payments
shall be delivered to QCC on or before the 1st day of the Minimum Revenue Period
to which it relates. The fact that BrandDirect is not obligated to make any
minimum revenue guaranty payments following the last Minimum Revenue Period
notwithstanding, BrandDirect shall market the Products until such time as QCC is
given Test Termination Notice and shall remit to QCC during such period payment
for all Product sales resulting from such marketing efforts in accordance with
Section 8 and Exhibit C.
8. PAYMENT TERMS. On or about the 1st day of each month of the Term, QCC
will forward to BrandDirect a detailed invoice indicating amounts due to QCC in
accordance with the prices contained on EXHIBIT C for activities during the
prior calendar month. The undisputed portion of each invoice will be due and
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payable by BrandDirect thirty (30) days from the date of each invoice. Any
disputes concerning charges by QCC appearing on any invoice to BrandDirect shall
be identified in a written notice delivered to QCC promptly upon discovery by
BrandDirect and prior to the date payment of such invoice is due. Any amounts
disputed in good faith and so identified shall be resolved by mutual agreement
of the parties prior to the payment due date and any adjustment to the invoice
to reflect such agreement shall be delivered by QCC to BrandDirect. BrandDirect
shall have ten (10) days from date of receipt of the adjusted invoice to pay the
agreed upon amount. In the event QCC and BrandDirect are unable to resolve any
good faith objection of BrandDirect to any invoice charge in the manner provided
above, BrandDirect shall pay 50% of the amount disputed to QCC on or before five
(5) days following the payment due date. Notwithstanding the foregoing, nothing
contained herein shall prevent BrandDirect from disputing any invoiced amount
discovered by BrandDirect to be inaccurate after the date payment for such
amount is due or has been delivered.
9. CANCELLATION OF PRODUCT ORDERS. QCC acknowledges that BrandDirect
intends to market the Club with a guarantee that permits members to cancel their
memberships and receive a refund of the current-term's membership fee. QCC and
BrandDirect further agree that, in the event such a marketing strategy is
employed, QCC shall, as its sole obligation to refund or reimburse to
BrandDirect amounts actually paid by BrandDirect to QCC in satisfaction of the
purchase price charged to BrandDirect for the cancelled Product, credit to
BrandDirect that dollar amount determined by multiplying (i) the amount
delivered to QCC by BrandDirect in payment of the purchase price for the
canceled Product sale, by (ii) the percentage set forth on Exhibit C (under the
heading "Cancellation Credits") for Product cancellations of that type.
BrandDirect shall provide to QCC written or electronic notice of member
cancellations occurring during the term of this Agreement within five (5) days
of the last day of the calendar month in which such cancellations occurred. QCC
will credit BrandDirect for the amount refundable to BrandDirect from QCC due to
such cancellations on the monthly billing invoice delivered to BrandDirect
covering the monthly period in which the cancellations occurred.
10. CONFIDENTIALITY.
a. "Confidential Information," as used herein, shall mean oral, written
or documentary information which relates to this Agreement received by either
party hereto or a party acting on such parties' behalf (each a "Receiving
Party"). Without limiting the foregoing, the names, addresses, telephone
numbers, credit card and billing account information, and other information
pertaining to members of the Club shall be considered "Confidential Information"
of BrandDirect, and QCC shall be considered the Receiving Party with respect
thereto, regardless of how such information is obtained by QCC. Information
meeting this definition shall be deemed Confidential Information notwithstanding
the fact that QCC or BrandDirect, as the case may be, had received it from a
third party pursuant to a confidentiality agreement with the owner of such
information.
b. "Confidential Information" does not include, and the Receiving Party
shall have no obligation with respect to information (other than the names,
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addresses, telephone numbers, credit card and billing account information, and
other information pertaining to members of the Club) which:
(i) is already known to the Receiving Party prior to receipt
as evidenced by prior documentation thereof; or
(ii) is or becomes publicly known through no wrongful act of
the Receiving Party; or
(iii) is rightfully received by the Receiving Party from a
third party without restriction and without breach of this Agreement or any
other agreement; or
(iv) is approved for release by written authorization of the
owner of such information.
c. QCC and BrandDirect acknowledge and agree that under this Agreement
each such party will obtain and have access to Confidential Information of the
other and that the misappropriation, unauthorized use, or unauthorized
disclosure of such Confidential Information would constitute a material breach
of this Agreement and would cause irreparable harm to the owner of such
information. Each party shall take all measures reasonable under the
circumstances to prevent unauthorized access to, or use of, the other party's
confidential information and reports.
d. With respect to Confidential Information, each party agrees that
during the term of this Agreement and for a period of five (5) years thereafter
it will not use Confidential Information of the other party for any purpose
whatsoever except as necessary for the performance of its duties under this
Agreement, and that it will avoid and prevent disclosure of Confidential
Information to any party other than a party to this Agreement.
e. In carrying out its duties under this Section 10, each party agrees
to use a standard of care at least as high as it uses to protect its own
confidential information, and no less than a reasonable standard of care.
f. All Confidential Information and all tangible forms of such
information, including, but not limited to, business information, data,
documents, drawings, specifications, prototypes, and software received hereunder
by a Receiving Party shall remain the property of the party delivering such
information, or, if received from a third party, the property of such third
party. Upon completion of its use of Confidential Information in connection with
the above-stated purpose of this Agreement, or upon written request by the owner
of such information, whichever is earlier, the Receiving Party shall return to
the owner of such information all tangible forms of the Confidential
Information, including any and all whole or partial copies thereof.
g. The parties acknowledge that any breach of this Section 10 by one
party could cause irreparable harm to the other party, and each party hereby
consents to an injunction or other equitable relief, without the necessity of
posting a bond or proving damages, in the event of any such threatened or actual
breach by it in addition to monetary damages and any other available remedies.
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11. OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS. QCC owns and retains all
title and ownership of all intellectual property rights in and to the Products
including, without limitation, all product concepts, characteristics, QCC
generated and QCC acquired (from any source other than BrandDirect) marketing
and sales collateral, training materials, scripts, software, firmware, copies of
software, master diskettes, documentation and related materials now owned or
hereafter acquired by the Company (from any source other than BrandDirect) in
relation to the Products (collectively "QCC Intellectual Property"). No title to
or ownership of the Products, the QCC Intellectual Property or any of the
associated goodwill is transferred or licensed to BrandDirect under this
Agreement and this Agreement should not be construed as granting to BrandDirect
any such right or license, whether by implication, estoppel or otherwise.
Notwithstanding anything contained herein to the contrary, following the
termination of this Agreement, BrandDirect may utilize any marketing materials
developed by BrandDirect in connection with this Agreement that contain
descriptions of the Products to the extent such materials and descriptions do
not make reference to or utilize any QCC owned or licensed trademarks, trade
names, registered marks, or copyrighted materials.
12. YEAR 2000 COMPLIANCE. Each of BrandDirect and QCC represents and
warrants to the other that all computer hardware, software, equipment, data
bases and programs owned by or used by it or its agents or subcontractors which
are material to the operations of its business and all updates thereto
(collectively, "Software") correctly handle the change of the century in a
standard and compliant manner, including the year 2000 and beyond as well as
leap years and the absence of leap years, and will operate accurately in all
material respects with respect to date-related operations. For purposes of this
Agreement, compliance with the foregoing shall mean that the Software will (i)
accurately handle date information, including leap year information, before,
during and after January 1, 2000, including but not limited to accepting date
input, providing date output and performing calculations on dates or portions of
dates; (ii) function accurately and without interruption before, during and
after January 1, 2000 without any change in operations associated with the
advent of the new century; (iii) respond to two-digit year-date input in a way
that resolves the ambiguity as to century in a disclosed, defined and
predetermined manner; and (iv) store and provide output of date information in
ways that are unambiguous and accurate as to century. As the sole and exclusive
remedy for breach of this warranty during the Test Period, the breaching party
shall (a) exercise commercially reasonable efforts to correct any material
noncompliance and (b) provide to the non-breaching party new deliverables that
are in compliance with this warranty at no cost or expense to the non-breaching
party. In no event shall the breaching party be liable for indirect, incidental,
consequential, reliance or special damages that the non-breaching party may
incur as a result of breach of this warranty during the Test Period. Neither
party shall be liable for any damages resulting from the failure of any third
party's computer systems not being able to process or reflect dates before, on
and after January 1, 2000; however, each party agrees that it shall be liable
for Systems failures which are solely attributable to a failure of its
individual systems to process and reflect dates before, on and after January 1,
2000, subject to the limitations set forth above.
13. AUDIT RIGHTS. Each party shall maintain at its principal administrative
office adequate books and records of all transactions under this Agreement. Each
party hereto shall have the right, during normal business hours and upon ten
(10) days' prior written notice, to inspect and audit the books and records of
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the other party relating solely to the business contemplated by this Agreement,
including files, letters and other documents relating in any way to such
business. Each party agrees to cooperate fully with all reasonable requests made
by the other in this regard including making its office/facilities available to
the requesting party during normal business hours. Each party also agrees to
cooperate fully with any regulatory body with jurisdiction over either of the
parties. Such books and records shall be maintained in accordance with prudent
standards for the term of this Agreement and for a three (3) year period
following the termination of this Agreement or for such longer period as may be
required by federal or state law.
14 Intentionally left blank.
15. INDEMNIFICATION. Each party is responsible for the performance of its
respective obligations hereunder. Therefore:
QCC shall indemnify and hold BrandDirect, its directors, officers,
employees and agents harmless (including from and against reasonable outside
attorney's fees) from and against any and all claims, costs, damages, expenses,
fees, fines, punitive damages, suits or proceedings arising out of or in any way
relating to any breach by QCC of any term or condition of this Agreement or any
acts or omissions of QCC's officers, directors, employees, subcontractors or
agents concerning the performance of QCC's obligations under this Agreement. For
purposes of this Section 15, the Credit Repositories will be considered
subcontractors of QCC. Following receipt by QCC of written notice from
BrandDirect that it intends to roll-out the Products, QCC shall obtain and
maintain during the remaining portion of the term, any renewal term and any
survival period insurance having the characteristics agreed to by QCC and
BrandDirect.
BrandDirect shall indemnify and hold QCC, its directors, officers,
employees and agents harmless (including from and against reasonable outside
attorney's fees) from and against any and all claims, costs, damages, expenses,
fees, fines, punitive damages, suits or proceedings arising out of or in any way
relating to any breach by BrandDirect of any term or condition of this Agreement
or any acts or omissions of BrandDirect's officers, directors, employees,
subcontractors or agents concerning the performance of BrandDirect's obligations
under this Agreement.
Notwithstanding any other provision of this Agreement to the contrary,
the indemnification and hold harmless provisions of this Section 15 shall
survive the termination or expiration of this Agreement.
16. APPROVAL NOT UNREASONABLY WITHHELD. Any time the approval or consent of
either QCC or BrandDirect shall be called for pursuant to this Agreement, except
where a different time period or different standard is expressly provided (e.g.
consent given in a party's discretion), such approval or consent will not be
unreasonably withheld, conditioned, or delayed and will be deemed given if
written notice of disapproval is not received by the requesting party within
twenty (20) days after the date such approval or consent is requested in
writing.
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17. TERMINATION. This Agreement may not be terminated by either party
hereto after its execution except in accordance with the provisions of Section
2, or for "Cause." In addition, either party may terminate this Agreement if
BrandDirect and QCC are unable to agree upon a minimum revenue guaranty during
the first calendar year following the Test Period in an amount acceptable to
each party in its sole discretion. For purposes of this Agreement, "Cause" shall
mean (i) the failure of the non-terminating party to perform any material
obligation of such party hereunder and such failure of performance having
continued for a period of thirty (30) days following delivery of written notice
of nonperformance, and (ii) the breach by the non-terminating party of any
representation or warranty of such party hereunder and such breach having
continued for a period of thirty (30) days following delivery of written notice
of breach. Termination of this Agreement will not relieve either party of
liability for breach.
18. NOTICES. All notices and other communications required or permitted to
be given under this Agreement shall be in writing and addressed to the
appropriate party at the address noted above, unless by such notice a different
address shall have been designated, and shall be effective (i) upon personal
delivery, (ii) the next business day following deposit with a nationally
recognized overnight delivery serviced marked for priority next day delivery, or
(iii) three (3) business days following deposit in the U.S. mail, certified or
registered mail postage prepaid.
19. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Florida without regard to conflicts of laws principals. Each party
hereto agrees to accept the non-exclusive jurisdiction of the courts of the
States of Connecticut, Florida and Georgia, and those of the United States of
America situated in the States of Connecticut, Florida and Georgia, for the
adjudication of any dispute arising out of this Agreement. Each party hereto
hereby irrevocably (1) agrees that any suit, action, or other legal proceeding
arising out of this Agreement may be brought in any Connecticut, Florida or
Georgia or United States federal court located in Connecticut, Florida or
Georgia, (2) consents to the jurisdiction of each such court in any such suit,
action, or legal proceeding, (3) waives any objection which it may have to the
laying of venue or any such suit, action or legal proceeding in any such courts,
and (4) agrees that Connecticut, Florida and Georgia are the most convenient
forums for litigation of any such suit, action or legal proceeding.
20. SEVERABILITY. If any clause, paragraph or provision of this Agreement
is found by a court of competent jurisdiction to be unenforceable, it shall not
affect or otherwise render invalid the remaining portions of this Agreement.
21. ASSIGNMENT. Neither this Agreement nor the rights and/or the
obligations of either of the parties hereto may be assigned by either of the
parties hereto without the prior written approval of the other party; provided,
however, that QCC may assign all of its rights and obligations hereunder to a
wholly-owned subsidiary of QCC or to a sister corporation of QCC wholly-owned by
Electronic Business Services, Inc. or any successor entity, the sole shareholder
of QCC, upon written notification to BrandDirect of such assignment.
22. FORCE MAJEURE. Neither party shall be liable for any failure to perform
or for a delay in the performance of its obligations hereunder caused by
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circumstances beyond its control, including acts of God, acts of government or
any agency or quasi-agency thereof (including acts of the Credit Repositories),
strikes, lock-outs, trade disputes, shortages of material or energy,
transportation embargoes, acts of public enemies, declared war, rebellion,
sabotage, epidemic, quarantine restrictions, fire, storm, flood, earthquake,
hurricane, tornado or any act, neglect or default of the other party, provided
that each party will use reasonable efforts to avoid a force majeure event. In
the event of a force majeure event, performance will be suspended to the extent
made necessary by such event, and the time for performance will be extended by a
period equal to the time of the delay. The party claiming the benefit of this
Section 22 will use reasonable efforts to minimize the effect of the force
majeure event.
23. HEADINGS. The headings used throughout this Agreement are for
convenience only and shall not be used for purposes of interpretation of this
Agreement.
24. ENTIRE AGREEMENT. This Agreement is intended to be the sole and
complete statement of obligation of the parties as to the subject matter of this
Agreement and supersedes all previous understandings, negotiations and proposals
as to such matter.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives as of the 22nd day of December, 1999.
QUICKCREDIT CORP. BRANDDIRECT MARKETING, INC.
/s/ HAROLD S. FISCHER /s/ DAVE THOMPSON
- ----------------------------- ------------------------------
By: Harold S. Fischer By: Dave Thompson
Title: President Title: President
The undersigned hereby irrevocably guarantees the prompt payment and
performance of each of QCC's obligations under this Agreement.
ELECTRONIC BUSINESS SERVICES, INC.
/s/ HAROLD S. FISCHER
- -----------------------------
By: Harold S. Fischer
Title: Chief Executive Officer
and President
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