INTERNET COOPERATION AGREEMENT
THIS INTERNET COOPERATION AGREEMENT (the "Agreement") is entered into
this 1st day of October 1999 by and between CompleteHome Operations, Inc.
("CompleteHome"), a Delaware corporation with an office located at 200 Vallejo
Street, San Francisco, California 94111 and ERA Franchise Systems, Inc. ("ERA"),
a Delaware corporation with an office located at 6 Sylvan Way, Parsippany, New
Jersey 07054.
W I T N E S S E T H:
WHEREAS, ERA is the franchisor of the ERA(R) real estate brokerage
franchise system (the "System"); and
WHEREAS, CompleteHome is a provider of, among other things, a
residential real estate services portal on the Internet ("Internet Portal"); and
WHEREAS, CompleteHome and ERA wish to engage in a cooperative marketing
effort with each other in accordance with the terms and conditions of this
Agreement.
NOW THEREFORE, in consideration of the promises and covenants contained
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Term. The term of this Agreement (the "Term") shall commence
on October 1, 1999 and shall terminate on December 31, 2039, unless earlier
terminated in accordance with the terms herein set forth.
Section 2. CompleteHome Obligations. (a) During the Term, CompleteHome
shall display the listings of residential real estate offered for sale through
ERA's franchisees (the "Listings") contained on the System web site operated by
ERA ("System Listings") on the Internet Portal and, subject to the prior written
approval of ERA, on the Internet web sites of third parties selected by
CompleteHome. The System Listings will be placed as part of the content of the
residential property listings pages located on the Internet Portal. The System
Listings displayed by CompleteHome will include a detailed description of the
property together with the identity of the broker for the particular Listing
(including the corresponding agents of such broker as may be required by law or
as may be requested by the broker). CompleteHome shall provide Internet traffic
access to the Listings on the Internet Portal at no cost to the Internet users.
With respect to System Listings, CompleteHome will not without the prior consent
of ERA (i) display the street address for a particular System Listing and/or
(ii) identify the applicable agent of the broker associated with the System
Listing. In addition, CompleteHome will not display any System Listing where
doing so would violate any restriction imposed on such System Listing or where
in the reasonable judgment of ERA the display of such System Listing would be
detrimental to the System.
(b) CompleteHome shall make available on the Internet Portal broker
profile screens (including agent profile screens to the extent requested by the
respective broker), which screens shall include general data and information for
each broker (and
agent as the case may be) in the System, as such information is made available
by ERA. CompleteHome shall design and develop a profile template to be dedicated
for the System which template shall include distinct characteristics, including
System-specific attributes, so as to differentiate the profile screens for the
System from similar content for other systems. The template design shall be
subject to the approval of ERA, which approval shall not be unreasonably
withheld. The profile screens shall be accessible, via hyperlink, from the
System Listings attributable to such broker/agent on the residential property
listing pages of the Internet Portal. The profile screens may also be accessed
by Internet users through search criteria from other locations on the Internet
Portal. Although profile screens shall not include any hyperlinks to web sites
or destinations other than the Internet Portal without the prior consent of ERA,
a profile screen may include a communication link to the listing broker
(including the corresponding agents of such broker as may be required by law or
as may be requested by broker), such as, customized telephone numbers, e-mail
delivery, e-mail-to-fax delivery and other vehicles of communication to reach
the broker as such vehicles become generally available for such purpose and are
approved by the parties.
(c) CompleteHome will, in cooperation with ERA, maintain lines of
communication with the brokers and agents (as permitted) of the System to, among
other things, promote CompleteHome and the services offered by or through
CompleteHome in connection with the Internet Portal. Through the use of
communication mediums such as e-mail, fax and telephone, CompleteHome will
distribute informational and marketing materials to the brokers and agents of
the System. All information disseminated by CompleteHome to the brokers and
agents of the System shall be subject to the prior approval of ERA. In addition,
CompleteHome shall solicit brokers and agents of the System to participate in
various listing and other services ("Ancillary Services") which will be offered
by or through CompleteHome. For Ancillary Services requested by a broker or
agent of the System, CompleteHome will enter into an agreement with such broker
or agent which sets forth the terms and conditions of such agreement.
CompleteHome shall be solely responsible for honoring its obligations under all
such broker and agent agreements including collecting any and all payments due
in connection with the Ancillary Services from the particular broker or agent.
For Ancillary Services provided through agreements by and between CompleteHome
and third party service/product providers, CompleteHome shall be solely
responsible for honoring its obligations under all such third party provider
agreements, including collecting any and all payments, commissions, rebates or
other similar amounts (the "Ancillary Service Revenues") payable to CompleteHome
by such third parties relating to the broker's and agent's participation in the
Ancillary Services. With respect to the Ancillary Services provided through
agreements by and between CompleteHome and third party service/product providers
only, CompleteHome agrees that it shall not promote, recommend or offer to the
brokers and/or agents of the System any services or products, or providers
thereof, which may be the subject of an exclusive marketing agreement (or
similar arrangement) entered into or maintained by ERA or any affiliate of ERA.
(d) CompleteHome will implement and maintain during the Term a system
to track and record Internet traffic to the System Listings on a "per broker"
basis and "per agent" basis. CompleteHome shall furnish a detailed report to (i)
ERA with respect
-2-
to the System Listings and (ii) each broker with respect to the System Listings
attributable solely to such broker or its agent, as applicable. The report shall
be issued by CompleteHome, via electronic means, in a format and containing
substance mutually agreed by the parties. A report shall be issued (i) to ERA
for each calendar month during the Term within fifteen (15) days from the end of
the particular month and (ii) to any broker of the System within fifteen (15)
days from the date on which said broker requests a report from CompleteHome (but
in no event more than one (1) time in any calendar quarter during the Term with
respect to a particular broker). Information to be included in the reports to
ERA will include information, such as, the total number of System Listings
viewed and the total number of leads generated by System Listings to the brokers
and agents.
(e) At the request of ERA, CompleteHome shall make available to ERA
various information, data and content prepared by or through CompleteHome for
display through the System web site. Display of the information, data and
content, including without limitation, any presentation or placement criteria,
shall be subject to the mutual agreement of the parties, which approval shall
not be unreasonably withheld. Access to all such information, data and content
shall be provided to ERA, at no cost. Further, all such CompleteHome
information, data and content shall remain the property of CompleteHome and
shall reside on a CompleteHome-designated server. During the Term, ERA shall
have a non-exclusive, non-transferable, limited license under this Agreement to
access and use such information, data and content from the System web site. The
environment in which such CompleteHome information, data and content is
displayed on behalf of ERA shall maintain a similar "look and feel" with respect
to the System web site so as to foster a seamless transfer from the System web
site to the CompleteHome server.
(f) CompleteHome will be responsible for the management of maintenance
and support services provided by third party providers for the System web site
("Third Party Providers"). ERA shall promptly undertake to assign to
CompleteHome the agreements with Third Party Providers for such maintenance and
support services. CompleteHome will, in cooperation with ERA, contact Third
Party Providers to notify Third Party Providers of the appointment of
CompleteHome under this subsection (f) and each of ERA and CompleteHome shall
execute the necessary documents, if any, to effectuate CompleteHome's
appointment with respect to the management of such services on behalf of ERA.
Management services shall include, among other things, assisting in negotiations
with service providers, reviewing/approving invoices, processing/remittance of
payments due to Third Party Providers, monitoring performance and other related
services as agreed by the parties. In no event shall CompleteHome have the right
(i) to obligate ERA to any provider of maintenance and support services for the
System web site without the prior written consent of ERA or (ii) to modify the
terms of the agreements (or terminate such agreements) with Third Party
Providers whereby such modifications would not be in the best interest of ERA,
including without limitation, reducing the service or performance levels
established in any of the agreements with Third Party Providers.
(g)(i) During the Term, CompleteHome shall serve as a non-exclusive
business development representative ("BDR") for ERA as it relates to third party
advertising on
-3-
the System web site. In its capacity as a BDR, CompleteHome shall offer and
provide assistance (e.g. recommendations, strategies and other pertinent
information) to ERA, at no cost to ERA, with respect to ERA's planning and
development of third party advertising and content on the System web site (the
"BDR Services"). Although CompleteHome agrees to perform the BDR Services to
acceptable standards as recognized throughout the Internet advertising industry,
CompleteHome does not guarantee the success of any idea, concept, plan or design
provided by CompleteHome to ERA. ERA expressly reserves the right to approve in
advance any work product, advertising campaign, project or other materials
submitted by CompleteHome to ERA for display on the System web site or other web
site, as applicable. Nothing contained in this Section 2(g) shall be deemed to
require CompleteHome to undertake any campaign, prepare any advertising
materials or publicity or cause the publication of any Internet advertising
which, in CompleteHome's judgment, is misleading, indecent, libelous, unlawful
or otherwise prejudicial to either party's interest. To the extent applicable,
CompleteHome shall be responsible for obtaining all releases, licenses
(including any assignments thereof), permits and other authorizations needed to
use or display content (e.g. names, likenesses, endorsements and testimonials)
on the System web site; provided, however, that ERA shall be solely responsible
for the accuracy, completeness and propriety of any and all information
furnished to CompleteHome by ERA (or on ERA's behalf) in connection with the BDR
Services. The parties shall meet on an annual basis, or more frequently as
agreed by the parties, to prepare and approve an Internet business development
agenda and schedule (the "Plan") for the then upcoming calendar year. The Plan
shall be prepared in writing and shall outline, in reasonable detail,
anticipated Internet business development activities, marketing alliance
promotions, restrictions on marketing efforts and the like. The parties will
also meet to discuss and evaluate ERA's development of Internet business
activities and opportunities relating to the placement of advertising on the
System web site as such activities and opportunities arise during the Term of
this Agreement and prior to ERA's commitment to any third party relating
thereto.
(g)(ii) As part of the appointment of CompleteHome as the BDR and
subject to the provisions in subsection (g)(iii) below, CompleteHome shall place
any and all third party advertisements on the System web site. Such appointment
by ERA of CompleteHome for the placement of third party advertisements shall be
exclusive in nature. CompleteHome will enter into and maintain the agreements
with third parties for the placement of such advertising and shall be
responsible for processing all requirements under such arrangements including
the collection of any and all payments due in connection with the placement of
such advertising. The presentation and/or location of third party advertising on
the System web site shall be subject to the agreement of the parties.
Notwithstanding the foregoing, for each six (6) month period during the Term
(commencing on the first day of the first full calendar month of the Term) (the
"Period"), ERA shall have the right to cause CompleteHome to place, in ERA's
discretion, third party advertisements on the System web site (the "Allotted
Ads"); provided, however, that in no event shall the total number of
ERA-designated impressions for such advertisements on the System web site in a
particular Period exceed six percent (6%) of the total number of impressions
placed on the System web site for such Period. Any expenses incurred by ERA in
reformatting portions of the System web site to accommodate advertising placed
by CompleteHome shall be borne
-4-
solely by CompleteHome. From time to time during the Term of this Agreement,
either party may request the other party to review the applicable percentage of
Allotted Ads allocated to ERA and such percentage may be adjusted subject to
such review and the mutual agreement of the parties.
(g)(iii) With respect to the placement of advertisements pursuant to
subsection (g)(ii) above, the parties acknowledge that in no event shall any
such advertising be placed on the System web site which, in the judgment of ERA,
would be a violation of any marketing agreement (or similar arrangement) to
which ERA (or an affiliate of ERA) is a party in effect as of the date of this
Agreement. If, in the judgment of ERA, the placement of any advertising by
CompleteHome would be considered a violation of any marketing agreement (or
similar arrangement) entered into by ERA (or an affiliate of ERA), then ERA may,
upon written notice to CompleteHome, cause CompleteHome to discontinue and
remove such advertising from the System web site and take any other steps
reasonably required by ERA to ensure that ERA (or the applicable affiliate of
ERA) is not in violation of such marketing agreement (or similar arrangement).
Further, in no event shall CompleteHome offer for placement or place any
advertising of an advertiser on the System web site whereby such advertiser
engages in a business which is, directly or indirectly, competitive in nature to
any businesses or operations of ERA or any ERA's affiliates. During the Term,
CompleteHome agrees to provide ERA with advance notice of advertising which
CompleteHome plans to place on the System web site. Such notice shall be sent
electronically (e.g. e-mail) to ERA's designated project representative (or
other method or project contact as may be agreed to by the parties) and shall at
least identify the name of the prospective advertiser together with a general
description of the nature of the goods and services offered by such advertiser.
ERA shall have five (5) business days from the date of the notice to object, in
writing, to the placement of advertising of the advertiser identified in the
notice. In the event that CompleteHome does not receive ERA's objection to the
advertiser within the stated deadline, then ERA's approval of the advertiser
shall be deemed granted. The proposed artwork and content of any and all
advertising shall be posted on a designated CompleteHome web site for review
purposes by ERA. Such web site shall be provided to ERA at no cost and shall be
operational on a 24X7 basis. During the Term, CompleteHome agrees that it shall
not place any advertisements on the System web site with respect to the third
parties and/or industries identified in Exhibit A, which is attached hereto and
made part hereof. From time to time, ERA may modify Exhibit A by adding or
deleting third parties or industries as the case may be.
(h) CompleteHome shall serve as the non-exclusive advertising placement
consultant for ERA for the purpose of the placement of Internet general
advertising on behalf of ERA and the System. CompleteHome shall offer and
provide assistance (e.g. advice, recommendations, strategies and other pertinent
information) to ERA, at no cost to ERA, with respect to ERA's the negotiation,
purchase and placement of Internet media in connection with the promotion of the
Systems and/or the System web site. The parties shall meet on an annual basis,
or more frequently as agreed by the parties, to discuss and prepare an Internet
purchase and placement agenda and schedule (the "Media Plan") for the then
upcoming calendar year. The Media Plan shall be prepared in writing and shall
outline, in reasonable detail, anticipated Internet purchase and placement
activities, marketing alliance promotions, restrictions on marketing efforts
-5-
and the like. The parties will also meet to discuss and evaluate ERA's
development of Internet business activities and opportunities relating to the
placement of Internet general advertising as such activities and opportunities
arise during the Term of this Agreement and prior to ERA's commitment to any
third party relating thereto, including without limitation, any commitment with
a third party to serve as ERA's Agency of Record for the placement and purchase
of general Internet advertising.
(i) Subject to Section 11 below, CompleteHome shall place the
trademarks, logos or other identifying marks of ERA (the "ERA Marks") on the
section(s) of the Internet Portal designated for the System Listings and/or the
System. Placement and identification of the ERA Marks shall be at least as
prominent as the placement and identification of any other real estate brokerage
system or company in the property listing pages of the Internet Portal or other
locations on the Internet Portal where such systems and companies are
collectively displayed. In no event shall CompleteHome state or imply a
preference for a particular real estate brokerage system or company over ERA or
the System. Further, CompleteHome shall provide ERA, at CompleteHome's cost,
with twenty five thousand (25,000) banner advertisement impressions per calendar
month. The banner advertisements will be located at the top of the applicable
web site pages and will provide a hyperlink from the Internet Portal to the
System web site. The design of the banner advertisement will be provided to
CompleteHome by ERA. From time to time during the Term of this Agreement, either
party may request the other party to review the designated number of banner
advertisements allocated to ERA, among other aspects relating to the hyperlink
to the System web site. The number of impressions and other related aspects
thereto may be adjusted subject to such review and the mutual agreement of the
parties.
(j) On or about the execution of this Agreement, CompleteHome shall
appoint a designated project representative who will serve as the primary point
of contact with ERA for the purpose of carrying out the day-to-day activities
under this Agreement. The project representative shall be qualified and shall
have the appropriate authority to approve requests made by ERA in performing
CompleteHome's obligations under this Agreement.
Section 3. ERA Obligations. (a) During the Term, ERA shall provide to
CompleteHome System Listings which are made available to ERA by or through the
brokers of the System. In providing the System Listings, ERA shall furnish to
CompleteHome detailed property descriptions together with the identity of the
broker for the particular System Listings (including the corresponding agents of
such broker as may be required by law or as may be requested by the broker)
together with the information required to complete/update profile screens for
the brokers and agents (as applicable) of the System. The System Listings,
including property descriptions and broker/agent information and data (and
changes in such information), shall be provided daily, via electronic means,
from ERA to CompleteHome. The format of such information and the particular time
of transfer of the information shall be mutually agreed by the parties. Although
ERA does not guarantee the accuracy of the information furnished to
CompleteHome, ERA shall use commercially reasonable efforts to ensure that such
information is an accurate and complete reflection of the information provided
by the brokers to ERA as of the date of the transfer to
-6-
CompleteHome. ERA will promptly notify CompleteHome of any incomplete or
inaccurate information discovered by ERA so that CompleteHome may issue an
updated version of the information.
(b) ERA shall use commercially reasonable efforts to promote
CompleteHome and its services (including general descriptions of the various
features offered by CompleteHome on the Internet Portal) to the brokers and
agents of the System and to encourage the brokers and agents to participate in
the programs developed and offered by or through CompleteHome in connection with
this Agreement. ERA will cooperate, in good faith, with CompleteHome to assist
CompleteHome in designing and developing marketing materials, literature and
other forms of communications to be issued by CompleteHome to the brokers and
agents of the System. Although such assistance will include information and
recommendations from ERA, ERA will not be responsible to provide any financial
assistance to CompleteHome pursuant to this subsection (b).
(c) From time to time, ERA shall submit to CompleteHome for display on
the Internet Portal various System-specific information, data and content
prepared by or through ERA for the System web site. As such information, data
and content is considered by ERA to be valuable and proprietary in nature, the
parties shall, prior to any transfer of such information, data and content to
CompleteHome, mutually agree as to the terms of such transfer including the
manner in which the information, data and content will be used and/or displayed
on the Internet Portal. Among other aspects to be contemplated in reaching such
agreement, the parties shall consider (i) the uniqueness of the information,
data or content to be transferred to CompleteHome, (ii) the impact on ERA and
the System, if any, of the display of such information, data or content on the
Internet Portal, (iii) the scope and breadth of the proposed display, (iii) the
"look and feel" of the proposed display, (iv) the duration of the proposed
display, (v) the display of similar information by real estate brokerage systems
other than the System and (vi) ERA's cost and expense attributable to the
design, development and/or publication of such information, data and content.
All costs to display and maintain the information, data and content on the
Internet Portal shall be the responsibility of CompleteHome. Further, all such
ERA information, data and content shall remain the property of ERA; provided,
however, that CompleteHome shall have, during the Term, a non-exclusive,
non-transferable, limited license under this Agreement to receive, use and
display such information, data and content on the Internet Portal.
(d) Subject to Section 11 below, ERA shall place the trademarks, logos
or other identifying marks of CompleteHome (the "CompleteHome Marks") on the
System web site. Placement of the CompleteHome Marks shall be in a prominent
location as agreed by the parties. Further, through a CompleteHome-identifying
icon placed on the System web site, ERA will provide, at CompleteHome's expense,
a hyperlink connecting the System web site to the section of the Internet Portal
designated for the System Listings and the System as agreed to by the parties.
(e) ERA agrees to reference CompleteHome and/or its affiliation with
ERA and the System in all of ERA's off-line advertising (as defined below),
where appropriate.
-7-
The placement of such references in off-line advertising shall be at the cost of
CompleteHome provided that ERA obtains CompleteHome's advance approval prior to
incurring any such costs. The location and form of the references to
CompleteHome in the off-line advertising shall be subject to the mutual
agreement of the parties. Upon the execution of this Agreement or as soon
thereafter as commercially practicable, ERA and CompleteHome shall meet to
review ERA's commitments and schedules for off-line advertising in effect as of
the date of this Agreement. For the purposes of this subsection (e), the
reference to "off-line advertising" shall include, but not be limited to,
advertising placed via print, radio, television or other forms of media other
than the Internet but shall not include any advertising by the franchisees of
the System.
(f) On or about the execution of this Agreement, ERA shall appoint a
designated project representative who will serve as the primary point of contact
with CompleteHome for the purpose of carrying out the day-to-day activities
under this Agreement. The project representative shall be qualified and shall
have the appropriate authority to approve requests made by CompleteHome in
performing ERA's obligations under this Agreement.
Section 4. Commissions/Fees. (a) Ancillary Services Commission. (i)
During the Term and to the extent permitted by law, CompleteHome shall pay
commissions on the Ancillary Service Revenues attributable to leads originating
from the System and the brokers and agents of the System in the amount of ten
percent (10%) of such Ancillary Service Revenues. Such commissions shall be paid
by CompleteHome to ERA with respect to any leads originating from the System web
site or to the particular broker with respect to any leads originating from the
broker (and such broker's agents), including without limitation, any leads
generated from a particular broker's web site. The commissions payable by
CompleteHome to ERA or the broker (as the case may be) with respect to the
Ancillary Service Revenues generated in each calendar quarter shall be paid not
more than thirty (30) days after the end of such quarter. CompleteHome shall
provide ERA with each payment made to ERA a report, detailing the Ancillary
Service Revenues generated by the System, the Ancillary Services Revenues
attributable to the brokers and agents of the System, the origin of the
applicable leads and the calculation of the commissions paid thereon. Further,
CompleteHome shall provide the broker with each such payment a report, detailing
the Ancillary Service Revenues attributable to the broker and its agents (broken
down on a "per agent" basis) and the calculation of the commissions paid
thereon.
(a)(ii) From time to time during the Term (but no more than one (1)
time in any calendar quarter), CompleteHome or ERA may, upon written notice to
the other party, initiate a review to determine an equitable adjustment, if any,
in the rate of commission payable on Ancillary Service Revenues in effect as of
the date on which notice is issued. In the event that it is determined by the
parties that an adjustment is warranted based on the totality of the
circumstances, then such adjustment shall become effective immediately upon such
determination without the necessity of further notice. In the event that it is
determined that an adjustment is not warranted based on the totality of the
circumstances (or, despite each party's good faith efforts, the parties are
unable to reach agreement as to an equitable adjustment in the rate of
commission), then the rate of commission in effect as of the date of the notice
shall remain in effect and unchanged.
-8-
(b) Advertising Commission. (i) During the Term and in consideration of
the services provided by CompleteHome pursuant to Section 2(h) above, among
other services and value provided by CompleteHome, CompleteHome shall pay to ERA
commissions on the total amount of the net advertising revenues ("Net
Advertising Revenues") generated by and paid to CompleteHome in connection with
any and all advertising placed on the System web site in the amount of ten
percent (10%) of the Net Advertising Revenues. The commissions payable to ERA
with respect to the Net Advertising Revenues generated in each calendar month
shall be paid not more than thirty (30) days after the end of such month.
CompleteHome shall provide ERA with each such payment a report, certified as
true and correct by a duly authorized representative of CompleteHome, detailing
the advertising revenues generated by CompleteHome and the calculation of the
commissions paid thereon.
(b)(ii) From time to time during the Term (but no more than one (1)
time in any calendar quarter), CompleteHome or ERA may, upon written notice to
the other party, initiate a review to determine an equitable increase, if any,
in the rate of commission payable on Net Advertising Revenues in effect as of
the date on which notice is issued. Among other aspects to be considered in
making such determination, the parties will review the overall performance of
the System web site; increases or decreases in the volume of System Listings
posted on the System web site; increases, if any, in the commission rates
payable to CompleteHome by third party advertisers for the placement of
advertising; rates of commission due to web site owners or operators generally
recognized throughout the Internet industry; and any other pertinent information
provided by the parties. In the event that it is determined by the parties that
an increase is warranted based on the totality of the circumstances, then such
increase shall become effective immediately upon such determination without the
necessity of further notice. In the event that it is determined that an increase
is not warranted based on the totality of the circumstances (or, despite each
party's good faith efforts, the parties are unable to reach agreement as to an
increase in the rate of commission), then the rate of commission in effect as of
the date of the notice shall remain in effect and unchanged.
(c) Web Site Management Service Fees. (i) In consideration for
CompleteHome's management of certain maintenance and support services with
respect to the System web site and subject to subsection (c)(ii) below, ERA
shall pay to CompleteHome a service fee (the "Service Fee") based on the actual
savings realized under the agreements with Third Party Providers to the extent
such savings are attributable to CompleteHome. The Service Fee payable to
CompleteHome with respect to the actual savings realized in each calendar month
shall be paid by ERA not more than thirty (30) days after the end of such month.
CompleteHome shall provide ERA at the conclusion of each calendar month an
invoice for the Service Fee, if any, together with a consolidated, monthly
invoice with respect to the payments made to Third Party Providers by
CompleteHome for such period and any other related information reasonably
requested by ERA. Payment of the invoices shall be remitted to CompleteHome by
ERA within thirty (30) days after the receipt of the invoices.
(c)(ii) For the purpose of calculating the actual savings attributable
to CompleteHome's management and support services, the parties acknowledge that
from
-9-
time to time during the Term CompleteHome and the Third Party Providers may
modify the commercial terms (e.g. scope, pricing elements) of the agreements
with the Third Party Providers or may renew or extend such agreements. In the
event of a modification or renewal of an agreement with a Third Party Provider,
CompleteHome and ERA shall cooperate with each other, in good faith, to
determine the price ERA would have paid with respect to the scope of the
services offered thereunder at the time of the modification of the commercial
terms or renewal (or extension) of the agreement (or execution of the agreement
with the service provider other than a Third Party Provider) (the "Fair Market
Value"). The Service Fee shall be the lesser of the following amounts (y) the
difference between the Fair Market Value and the actual billings OR (z) six
percent (6%) of the Fair Market Value.
Section 5. Exclusivity. During the Term, ERA agrees that it shall not
furnish the System Listings to any third party provider or operator of an
Internet portal (in the capacity of aggregating or displaying such real estate
listings for online dissemination) other than CompleteHome; provided, however
that such restriction shall not limit or pertain to any commitments or
obligations existing as of the date of this Agreement to provide the System
Listings to a third party provider or operator of an Internet portal (in the
capacity of aggregating or displaying such real estate listings for online
dissemination) and further provided that nothing in this Section 5 shall limit
or otherwise affect ERA from utilizing the System Listings in any manner in
connection with the System web site. With respect to any obligations or
commitments existing as of the date of this Agreement to provide System Listings
to a third party provider or operator of an Internet portal, ERA hereby agrees
not to extend or renew any such obligations or commitments.
Section 6. Indemnity/Limitation of Liability. (a) CompleteHome shall
indemnify and hold harmless ERA and its affiliates, officers, directors,
employees, agents, successors and assigns from any claims, damages, liabilities,
losses, government procedures and costs, including reasonable attorneys' fees
and costs of suit, arising from any third party claims for (i) CompleteHome's or
its employees' or agents' failure to comply with applicable laws and
regulations, negligence or willful misconduct in connection with the performance
of this Agreement, or misrepresentation, or breach of any warranty, obligation
or covenant of this Agreement and (ii) libel, slander or defamation or violation
(or misappropriation) of intellectual property rights, privacy rights, publicity
rights or similar rights arising from any content or advertising placed or
displayed on the System web site, Internet Portal or other approved web site
only to the extent that such content or advertising is furnished by
CompleteHome. In no event shall the indemnity obligation set forth in this
subsection (a) apply to any information (including content) furnished to
CompleteHome by ERA.
(b) ERA shall indemnify and hold harmless CompleteHome and its
affiliates, officers, directors, employees, agents, successors and assigns from
any claims, damages, liabilities, losses, government procedures and costs,
including reasonable attorneys' fees and costs of suit, arising from third party
claims for (i) ERA's or its employees' or agents' failure to comply with
applicable laws and regulations, negligence or willful misconduct in connection
with the performance of this
-10-
Agreement, misrepresentation or breach of any warranty, obligation or covenant
of this Agreement and (ii) libel, slander or defamation or violation (or
misappropriation) of intellectual property rights, privacy rights, publicity
rights or similar rights arising from any content or advertising placed or
displayed on the System web site, Internet Portal or other approved web site
only to the extent that such content or advertising is furnished by ERA. In no
event shall the indemnity obligation set forth in this subsection (b) apply to
or include the acts or omissions of any broker or agent of the System or apply
to any information (including content) furnished to ERA by CompleteHome.
(c) In the event that the indemnified party is required to respond to
any claim, action, demand or proceeding, the indemnifying party will, upon
reasonable notification, respond and defend the indemnified party against such
claims and demands in any such actions or proceedings pursuant to its indemnity
obligations under this Section 6. In the event that the indemnifying party fails
to defend the indemnified party, the indemnifying party will reimburse the
indemnified party for all reasonable costs and expenses, including reasonable
attorneys' fees, incurred by the indemnified party.
(d) Neither party shall be responsible to the other for any indirect,
special or consequential damages under any tort including lost profits or
interruption of business (regardless of whether a party has been advised of the
possibility of or could have foreseen such damages). Notwithstanding the
foregoing, the limitation of liability provided under this subsection (d) shall
not apply with respect to (i) third party claims and/or (ii) the willful
misconduct or gross negligence of a party.
(e) This Section 6 and the rights, remedies, obligations and
limitations of the parties under such Section shall survive termination or
expiration of this Agreement.
Section 7. Books and Records; Audit. CompleteHome shall use
commercially reasonable efforts to keep accurate and complete records of the
revenues generated by CompleteHome in connection with this Agreement and the
System (including without limitation, the Ancillary Services Revenues and Net
Advertising Revenues) together with invoices and other payment information
relating to CompleteHome's management of the maintenance and support service
agreements. All such records shall be available for inspection and audit by ERA
or its representatives on reasonable notice to CompleteHome during normal
business hours throughout the Term of this Agreement and for one (1) year
thereafter. CompleteHome shall reasonably cooperate with ERA in such inspection
and audit. In the event any such inspection or audit establishes an underpayment
of commissions, CompleteHome shall pay the amount of the deficit within fifteen
(15) days after notification of such deficiency. In the event such audit
identifies an overpayment of commissions, such overpayment shall be reconciled
against future commissions to become due from CompleteHome to ERA or, if it is
determined that future commissions will not become due, ERA will remit payment
in the amount of the overage within fifteen (15) days from such determination.
-11-
Section 8. Acknowledgments. (a) CompleteHome acknowledges that ERA is a
franchisor and not the owner or operator of real estate brokerage offices and
that, as such, ERA cannot compel or guarantee any level of participation of the
franchisees (including brokers and agents) of the System with CompleteHome or
any other third party. Further, despite the recommendation and promotion of
CompleteHome by ERA, CompleteHome acknowledges that the brokers and agents of
the System may enter into and maintain agreements or arrangements with third
parties which may include listing agreements and marketing agreements. In no
event shall any such agreements or arrangements entered into by the brokers or
agents of the System be construed to be a violation of the terms of this
Agreement, including any obligations or limitations of ERA hereunder. ERA shall
not be responsible for any amounts or obligations owed to CompleteHome by any
brokers or agents of the System.
(b) For the purpose of this Agreement, the phrases "affiliates of ERA"
or "ERA's affiliates" shall not include the franchisees (brokers and agents) of
the System.
Section 9. Termination/Force Majeure. (a) When fully executed, this
Agreement will constitute a binding obligation of both parties which may not be
terminated by either party except that either party may terminate this Agreement
(in whole or in part) in the event of a material breach of the terms of this
Agreement by the other party. In the event of a material breach as set forth
above, the breaching party shall be given written notice of such breach and the
opportunity to cure such breach within thirty (30) days of the date of such
notice (ten (10) days in the case of a payment default). In the event the
breaching party fails to cure such breach within the applicable period stated
above, the other party shall have the right to immediately terminate this
Agreement upon written notice to the breaching party.
(b) In no event shall either party be liable to the other party for any
delay or failure to perform hereunder, which delay or failure to perform is due
to causes beyond the reasonable control of said party, including, but not
limited to, acts of God; acts of the public enemy; acts of the United States, or
any state, territory or political division of the United States of America, or
of the District of Columbia; acts of a judiciary or legislative body; fires;
floods; epidemics; quarantine restrictions; strikes or any other labor disputes;
and freight embargoes; provided, however, that the delay or failure to perform
was not be caused by the negligent acts of the non-performing party and that the
non-performing party acts with due diligence to mitigate any such delays in its
failure to perform.
Section 10. Representations. (a) Each party has full power and
authority and has been duly authorized, to enter into and perform its
obligations under this Agreement, all necessary approvals of any Board of
Directors, shareholders, partners, co-tenants and lenders having been obtained.
The execution, delivery and performance of this Agreement by each party will not
violate, create a default under or breach of any charter, bylaws, agreement or
other contract, license, permit, indebtedness, certificate, order, decree or
security instrument to which such party or any of its principals is a party or
is subject. Neither party is the subject of any current or pending dissolution,
receivership, bankruptcy, reorganization, insolvency, or similar proceeding on
the date this Agreement is executed by such party and was not within
-12-
the three (3) years proceeding such date. The persons signing this Agreement on
behalf of each party are authorized to execute this Agreement for and on behalf
of such party and have full authority to so bind such party.
(b) CompleteHome and ERA will comply with all applicable local, state
and federal laws and regulations in connection with the performance of their
respective obligations under this Agreement.
Section 11. Trademarks/Artwork. (a) Except as specifically provided in
this Agreement, CompleteHome specifically acknowledges that this Agreement does
not confer upon CompleteHome any interest in or right to use any trademark,
service mark or other intellectual property right of ERA or its affiliates (the
"ERA Intellectual Property Rights") in connection with this Agreement unless
CompleteHome receives the prior written consent of ERA. CompleteHome further
agrees that upon termination or expiration of this Agreement, CompleteHome shall
immediately cease and discontinue all use of the ERA Intellectual Property
Rights. Further, if CompleteHome wishes to utilize the ERA Intellectual Property
Rights in advertising or promotional materials, it must submit such materials to
ERA for final approval before utilizing them. In no event may CompleteHome or
any affiliated or associated person or entity utilize the ERA Intellectual
Property Rights for any purpose other than in connection with this Agreement.
CompleteHome agrees to comply with all requests of ERA with respect to the
appearance and use of the ERA Intellectual Property Rights, including without
limitation, any requests to change the form or style of the ERA Intellectual
Property Rights and shall at all times consistently use the ERA Intellectual
Property Rights so as to ensure that ERA's rights are adequately preserved. ERA
reserves the right from time to time to require changes to the ERA Intellectual
Property Rights upon thirty (30) days prior written notice to CompleteHome.
(b) Except as specifically provided in this Agreement, ERA specifically
acknowledges that this Agreement does not confer upon ERA any interest in or
right to use any trademark, service mark or other intellectual property right of
CompleteHome or its affiliates (the "CompleteHome Intellectual Property Rights")
in connection with this Agreement unless ERA receives the prior written consent
of CompleteHome. ERA further agrees that upon termination or expiration of this
Agreement, ERA shall immediately cease and discontinue all use of the
CompleteHome Intellectual Property Rights. Further, if ERA wishes to utilize the
CompleteHome Intellectual Property Rights in advertising or promotional
materials, it must submit such materials to CompleteHome for final approval
before utilizing them. In no event may ERA or any affiliated or associated
person or entity utilize the CompleteHome Intellectual Property Rights for any
purpose other than in connection this Agreement. ERA agrees to comply with all
requests of CompleteHome with respect to the appearance and use of the
CompleteHome Intellectual Property Rights, including without limitation, any
request to change the form or style of the CompleteHome Intellectual Property
Rights and shall at all times consistently use the CompleteHome Intellectual
property Rights so as to ensure that CompleteHome's rights are adequately
preserved. CompleteHome reserves the right from time to time to require changes
to the CompleteHome Intellectual Property Rights upon thirty (30) days prior
written notice to ERA.
-13-
Section 12. Relationship of Parties. The relationship between
CompleteHome and ERA is one of an independent contractor. Neither party is the
legal representative or agent of, or has the power to obligate (or has the right
to direct or supervise the daily affairs of) the other or any other party for
any purpose whatsoever. CompleteHome and ERA expressly acknowledge that the
relationship intended by them is a business relationship based entirely on and
circumscribed by the express provisions of this Agreement and that no
partnership, joint venture, agency, fiduciary or employment relationship is
intended or created by reason of this Agreement.
Section 13. Assignments. This Agreement may not be assigned by either
party without the prior written consent of the non-assigning party, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing,
either party may assign this Agreement without the consent of the other party to
an affiliate or in connection with a merger, consolidation or a sale of
substantially all of its assets. This Agreement and the covenants and agreements
herein contained shall, subject to the provisions of this Section, inure to the
benefit of and be binding on the parties hereto and their respective permitted
successors and assigns.
Section 14. Confidentiality. (a) CompleteHome acknowledges that any
information conveyed to or obtained by CompleteHome regarding ERA, its business
plans and operations in connection with this Agreement is confidential and
proprietary to ERA (the "ERA Confidential Information"). CompleteHome agrees
that in no event shall CompleteHome disclose, transfer, copy, duplicate, or
publish any ERA Confidential Information to any third party without the prior
written consent of CompleteHome, which consent may be withheld in ERA's sole
discretion. CompleteHome further agrees that it shall not utilize any ERA
Confidential Information for any purpose whatsoever other than for the purpose
of performing its obligations under this Agreement. CompleteHome shall only make
available the ERA Confidential Information to its employees on a need-to-know
basis and shall advise such employees of the restriction set forth with respect
to the use of such ERA Confidential Information. CompleteHome shall be
responsible for the unauthorized disclosure of any ERA Confidential Information
by its employees.
(b) ERA acknowledges that any information conveyed to or obtained by
ERA regarding CompleteHome, its business, plans and operations in connection
with this Agreement is confidential and proprietary to CompleteHome (the
"CompleteHome Confidential Information"). ERA agrees that in no event shall ERA
disclose, transfer, copy, duplicate, or publish any CompleteHome Confidential
Information to any third party without the prior written consent of
CompleteHome, which consent may be withheld in CompleteHome's sole discretion.
ERA further agrees that it shall not utilize any CompleteHome Confidential
Information for any purpose whatsoever other than for the purpose of performing
its obligations under this Agreement. ERA shall only make available the
CompleteHome Confidential Information to its employees on a need-to-know basis
and shall advise such employees of the restriction set forth with respect to the
use of such CompleteHome Confidential Information. ERA shall be responsible for
the unauthorized disclosure of any CompleteHome Confidential Information by its
employees.
-14-
(c) The non-disclosure restrictions set forth in this Section 14 shall
not apply to information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the receiving party; (ii) was
within the receiving party's possession prior to its being furnished by the
originating party, provided that the source of such information was not known by
the receiving party to be bound by a confidentiality agreement or non-disclosure
restrictions with respect to such information; or (iii) becomes available to the
receiving party on a nonconfidential basis from a source other than the
originating party, provided that the source of such information was not known by
the receiving party to be bound by a confidentiality agreement or non-disclosure
restrictions with respect to such information. With respect to disclosures of
the ERA Confidential Information or CompleteHome Confidential Information as may
be required by law or court order, such disclosures shall be permitted without
the consent of the originating party provided that the disclosing party
furnishes the originating party prior written notification (as soon as
practicably possible after the request for disclosure is made). Upon the
termination of this Agreement or upon the earlier written request by the
originating party, the receiving party shall return the ERA Confidential
Information and CompleteHome Confidential Information (as the case may be) to
the originating party including any copies relating thereto on whatever media
(or alternatively destroy such information if so instructed by the originating
party).
(d) The parties acknowledge that ERA Confidential Information and
CompleteHome Confidential Information, respectively, is a valuable asset of the
originating party, the disclosure of which would cause the originating party
irreparable harm for which there is no adequate remedy at law. Accordingly, in
the event of a breach or alleged breach of this Section 14, the originating
party or parties shall be allowed injunctive relief and any other equitable
remedies in addition to remedies afforded by law. The obligations of each party
pursuant to this Section 14 shall survive the termination or expiration of this
Agreement.
Section 15. Partial Invalidity. Should any part of this Agreement, for
any reason, be declared invalid, such decision shall not affect the validity of
any remaining portion of this Agreement.
Section 16. No Waiver. No failure or delay in requiring strict
compliance with any obligation of this Agreement (or in the exercise of any
right or remedy provided herein) and no custom or practice at variance with the
requirements hereof shall constitute a waiver or modification of any such
obligation, requirement, right or remedy or preclude exercise of any such right
or remedy or the right to require strict compliance with any obligation set
forth herein. No waiver of any particular default or any right or remedy with
respect to such default shall preclude, affect or impair enforcement of any
right or remedy provided herein with respect to any subsequent default. No
approval or consent of either party shall be effective unless in writing and
signed by an authorized representative of such party, and such party's consent
or approval may be withheld for so long as the other party is in default of any
of its obligations under this Agreement.
-15-
Section 17. Notices. Notices will be effective hereunder when and only
when they are reduced to writing and delivered, by next day delivery service,
with proof of delivery, or mailed by certified or registered mail, return
receipt requested, to the appropriate party at its address stated below or to
such person and at such address as may be designated by notice hereunder.
Notices shall be deemed given on the date delivered or date of attempted
delivery, if service is refused.
CompleteHome: ERA:
------------- ----
CompleteHome Operations, Inc. ERA Franchise Systems, Inc.
200 Vallejo Street 6 Sylvan Way
San Francisco, California 94111 Parsippany, New Jersey 07054
Attn: President Attn: President
Section 18. Publicity. Each party shall (a) submit to the other party
all advertising, written sales promotions, press releases, and other publicity
matters relating to this Agreement in which the other party's name or mark is
mentioned or which contains language from which a relationship with the other
party may be inferred or implied and (b) not publish or use such advertising,
sales promotions, press releases or publicity matters without the other party's
consent.
Section 19. Miscellaneous. The remedies provided in this Agreement are
not exclusive. This Agreement will be construed in accordance with the laws of
the State of New Jersey, except for New Jersey's conflict of laws principles.
The parties consent to District Court for the District of New Jersey and further
waive objection to venue in any such court. This Agreement is exclusively for
the benefit of the parties hereto and may not give rise to liability to a third
party. No agreement between CompleteHome or ERA and anyone else is for the
benefit of the other party. Neither party will interfere with contractual
relations of the other. The section headings in this Agreement are for
convenience of reference only and will not affect its interpretation.
This Agreement, together with all instruments, exhibits, attachments
and schedules hereto, constitutes the entire agreement (superseding all prior
agreements and understanding, oral or written) of the parties hereto with
respect to the subject matter hereof and shall not be modified or amended in any
respect unless in writing executed by all such parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first stated above.
COMPLETEHOME OPERATIONS, INC. ERA FRANCHISE SYSTEMS, INC.
By: /S/ Sarah Nolan By: /S/ Peter Burgdorff
---------------------------- -----------------------------
Name: Sarah Nolan Name: Peter Burgdorff
-------------------------- ---------------------------
Title: CEO Title: President & CEO
------------------------- --------------------------
-16-
EXHIBIT A
THIRD PARTY/INDUSTRY ADVERTISING RESTRICTIONS
The following list identifies the applicable advertising restrictions
on CompleteHome in the placing advertising on the System web site. In general,
the prohibited advertising is classified either on a "third party advertiser
basis" or "industry basis."
- - Residential real estate brokerage system or agencies (other than
businesses or operations relating to ERA)
- - Advertising relating to residential mortgage service providers
- - Corporate relocation providers
- - Vehicle rental systems or agencies