Exhibit 10(p)
KIOSK AGREEMENT
This Kiosk Agreement (the "Agreement") dated this 9th day of
September, 1996 by and between COLEMAN RESEARCH CORPORATION, a corporation
organized and existing under the laws of the state of Florida, with its
corporate headquarters located at 201 South Orange Avenue, Suite 1300, Orlando,
Florida 32801 ("Coleman"), and INTER*ACT SYSTEMS INCORPORATED, a corporation
organized and existing under the laws of the State of North Carolina, with its
principal place of business at 14 Westport Avenue, Norwalk, Connecticut 06891
("Inter*Act") (together, the "Parties").
WHEREAS, Coleman has purchased from Inter*Act the
manufacturing assets and the manufacturing process located at 101 Trade Zone
Drive, Suites 16A, 18A and 19A of Trade Zone 127, West Columbia, South Carolina
29170; and
WHEREAS Coleman and Inter*Act desire to enter into this
Agreement regarding the purchase and sale of Kiosks.
NOW THEREFORE, for Ten Dollars ($10.00) and in consideration
of the foregoing and other good and valuable consideration, the receipt and
sufficiency of which in hereby acknowledged, the Parties agree as follows:
1. Definitions. In addition to other terms defined herein, the following terms
shall have the meanings set forth below:
1.1 "Acceptance Procedures" shall have the meaning given in Section 3.7
herein.
1.2 "Effective Date" shall mean the date first set forth above.
1.3 "Force Majeure Event" shall mean an act of God, war (whether
declared or not), riot, embargo, act of governmental or military authority,
strike, labor dispute, fire, flood, earthquake, disaster or other similar cause
beyond a party's reasonable control. Notwithstanding the foregoing, a party
failing to perform because of a Force Majeure Event will undertake reasonable
commercial efforts to mitigate the impact thereof.
1.4 "Hardware" shall mean the touch screen display, personal computer
and printer used as components of a Kiosk.
1.5 "Initial Kiosk Order" shall mean the initial Kiosk Order set forth
on Schedule 1.
1.6 "Invoice Date" shall mean the date typed on the invoice to
Inter*Act for Kiosks Shipped to Inter*Act.
1.7 "Kiosk" shall mean the integrated computer system consisting
primarily of a printer, touch display screen and personal computer executing the
Software housed in a cabinet of the Proprietary Design.
1.8 "Kiosk Order" shall mean an order of Kiosks by Inter*Act under this
Agreement.
1.9 "Marketing Materials" shall mean all customer lists, advertising
and promotional materials and other information and data used by Inter*Act,
including, without limitation, sales and market research materials pertaining to
Inter*Act's business.
1.10 "Proprietary Design" shall mean the design of the Kiosk as set
forth on Schedule 6.
1.11 "Proprietary Property" shall mean individually and collectively:
(i) the Proprietary Design; (ii) the Marketing Materials; and (iii) the
Software.
1.12 "Rate" shall mean the price for each Kiosk in each Kiosk Order, as
mutually agreed by Coleman and Inter*Act, provided, however, the Rate for the
Initial Kiosk Order is set forth on Schedule 1 attached hereto.
1.13 "Shipped" or "Shipment" shall mean the transfer from Coleman to
Inter*Act, FOB Coleman's manufacturing site, of a fully manufactured Kiosk which
satisfies the Acceptance Procedures.
1.14 "Shipping Schedule" shall mean the schedule for the Shipment of
Kiosks from Coleman to Inter*Act, which Coleman and Inter*Act mutually agree to
in writing for each Kiosk Order.
1.15 "Software" shall mean the software owned and supplied by Inter*Act
that is loaded onto the personal computer component of the Kiosk.
1.16 "Specifications" shall have the meaning given in Section 3.3.
2. Rights and Responsibilities.
2.1 Coleman shall:
2.1.1 Manufacture and sell Kiosks on an exclusive
basis to Inter*Act as described in this
Agreement, provided however, except for the
restrictions of Section 9.2, nothing in this
Agreement shall prohibit Coleman from
selling kiosks without Inter*Act's
permission: (i) during or upon expiration of
this Agreement, which do not use the
Software
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or the Proprietary Design to any purchaser;
and (ii) in accordance with Section 2.1.2.
To the extent Coleman manufactures kiosks
for sale to purchasers other than Inter*Act,
Coleman shall use its best efforts to
manufacture kiosks which are not
substantially similar to the Proprietary
Design and Specifications of the Kiosks. If,
however, Inter*Act believes that a kiosk
sold by Coleman is substantially similar to
the Proprietary Design and Specifications of
the Kiosks, Inter*Act shall notify Coleman
and Coleman shall either (i) pay a royalty
to Inter*Act of Fifty Dollars ($50) for each
kiosk sold which is substantially similar to
the Proprietary Design and specifications of
the Kiosks as demanded by Inter*Act or (ii)
submit the dispute for resolution pursuant
to Section 9.19. If the dispute is submitted
for resolution pursuant to Section 9.19 and
resolved in favor of Inter*Act, Coleman
shall pay Inter*Act a royalty of fifty
dollars ($50) for each kiosk sold by Coleman
which is the subject of the dispute.
Notwithstanding the foregoing, Coleman shall
not manufacture or sell kiosks which are
substantially similar to the Proprietary
Design and Specifications for use in
pharmacies (the "Pharmacy Restriction"). In
the event of a breach of this Pharmacy
Restriction, Inter*Act shall have the right
to seek appropriate relief, in lieu of the
fifty dollar royalty, whether for actual
damages or in equity, including, but not
limited to injunctive relief (to which
Coleman hereby consents to if reasonable),
to protect the interests of Inter*Act.
Inter*Act and Coleman understand that except
for the Pharmacy Restriction contained in
this Section 2.1.1, the pharmacy use
restrictions of Section 2.2 and the
restriction on sales to Excluded Entities
set forth in Section 9.2, Coleman shall have
the right to manufacture and/or sell kiosks
for use in pharmacies;
2.1.2 Have to right to manufacture and sell kiosks
using the Proprietary Design and
Specifications, but not the color of the
Kiosks or the Software, to purchasers, other
than Inter*Act and the Excluded Entities,
for use in locations other than grocery
stores and pharmacies, provided Coleman pays
to Inter*Act a royalty of fifty dollars
($50) per kiosk sold. No royalty shall be
payable for Kiosks sold to Inter*Act; and
2.1.3 Require the officers and employees
identified on Schedule 5 to sign a
confidentiality agreement substantially in
the form annexed hereto as Schedule 2
"Confidentiality Agreement."
2.2 Inter*Act shall:
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2.2.1 Purchase Kiosks exclusively from Coleman for
a period of three (3) years from the
Effective Date or until the termination of
this Agreement in accordance with Section 7
hereof (the "Term"). The Term shall be
renewable by the mutual agreement of the
Parties;
2.2.2 Inter*Act reserves the right to manufacture
Kiosks upon expiration of this Agreement for
any reason, but understands and agrees that
upon expiration of this Agreement, Coleman
shall have the right to manufacture and sell
kiosks, with any software, but the Software,
and with any design, but the Proprietary
Design, to any purchaser selected by
Coleman, as long as Coleman is not in
violation of Section 9.2 of this Agreement;
and
2.2.3 Provide a release from the confidentiality
and non-compete obligations, in the form of
Schedule 7, to each Employee who accepts
employment with Coleman.
3. Ordering, Manufacture, and Shipment of Kiosks.
3.1 Inter*Act and Coleman hereby agree to the Initial Kiosk Order
attached as Schedule 1, and the Shipping Schedule for the
Initial Kiosk Order, attached as Schedule 9. Thereafter,
Inter*Act may place additional Kiosk Orders as Inter*Act and
Coleman mutually agree in writing. The Shipping Schedule for
any Kiosk Order shall be as agreed by the Parties in writing.
There shall be no limit to the number of Kiosks Inter*Act may
order during the Term, provided the Shipping Schedule and Rate
are acceptable to Coleman.
3.2 The Shipping Schedule or the Specifications for any Kiosks of
a Kiosk Order, not yet Shipped, may be changed by the mutual
agreement of Coleman and Inter*Act, evidenced by a writing
signed by both Parties.
3.3 Kiosks ordered by Inter*Act from Coleman shall be built to the
drawings and designs provided to Coleman by Inter*Act (the
"Specifications") the current version of which is incorporated
in this Agreement by reference as Schedule 3,
"Specifications". Inter*Act may from time to time revise the
Specifications, provided Coleman reserves the right to change
the Rate and/or Shipping Schedule of Kiosks manufactured, if
reasonably required because of the revised Specifications.
Notwithstanding the above, if the revision to the
Specifications by Inter*Act makes the then current inventory
of Coleman (purchased to satisfy existing Kiosk Orders using
the then current Specifications), obsolete, Inter*Act agrees
to purchase the number of Kiosks necessary to use up to a
thirty (30) days supply of the obsolete inventory using the
prior Specifications (the then current Specifications prior to
the revision to the Specifications) or to reimburse Coleman
for the actual invoice cost of the obsolete inventory,
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upon delivery of the obsolete inventory to Inter*Act. Payment
for any obsolete inventory shall be made by Inter*Act to
Coleman within thirty (30) days of delivery of the obsolete
inventory to Inter*Act. Coleman may purchase the items
described in the Specifications from any vendor, provided no
change in the manufacturer of the item can be made without
Inter*Act's consent.
3.4 Coleman shall provide research and development support at
Inter*Act's request at a mutually agreed price.
3.5 Upon notice to Inter*Act and Inter*Act's receipt of a
Confidentiality Agreement, in the form of Schedule 8, from the
manufacturer, Coleman may outsource the manufacture of the
Kiosk. Notwithstanding the foregoing, Coleman shall not
outsource the installation of the Software in the Kiosk.
3.6 Coleman acknowledges that timely Shipment is of the essence of
this Agreement. If Coleman fails to meet the Shipping Schedule
for a Kiosk Order (other than the Initial Kiosk Order) or with
respect to the Initial Kiosk Order fails to meet the Shipping
Schedule for the then outstanding three (3) month rolling firm
shipping commitment as described in Schedule 9, and Inter*Act
has not committed a breach of this Agreement, and Coleman's
failure to meet the respective Shipping Schedule continues for
fourteen (14) days for any reason other than an action of
Inter*Act or failure of the Software not due to Coleman's
actions, Inter*Act may fill any percentage of the total number
of undelivered Kiosks of a Kiosk Order (other than the Initial
Kiosk Order) or the then outstanding three (3) month rolling
firm shipping commitment of the Initial Kiosk Order using
another manufacturer without breaching this Agreement. For
those Kiosks that Inter*Act does obtain from Coleman,
Inter*Act will pay Coleman at the Rate agreed under the Kiosk
Order (other than the Initial Kiosk Order) or the Initial
Kiosk Order. Nothing herein should be construed as limiting
any other right or remedy available to Inter*Act or Coleman
pursuant to this Agreement.
3.7 The procedure to test each completed Kiosk (the "Acceptance
Procedures") is attached hereto as Schedule 10 and these
Acceptance Procedures may be changed upon the mutual written
agreement of Coleman and Inter*Act. The Acceptance Procedures
will be reviewed whenever Inter*Act changes the
Specifications, or at any time on the request of either Party.
3.8 Prior to Shipment, Coleman shall test each Kiosk and certify
to Inter*Act that the Kiosk operates and otherwise conforms
with the Acceptance Procedures, de minimis deviations not
affecting the performance of the Kiosks excepted. Upon
Shipment, Inter*Act shall have the right to reject a Kiosk for
failing to meet the Acceptance Procedures, for a reason other
than loss or damage
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during transit or failure of the Software not due to Coleman's
actions. As soon as reasonably possible, but with the highest
priority, Coleman shall provide another Kiosk to replace a
properly rejected Kiosk. Upon proper rejection of fifteen
percent (15%) of the Kiosks in a Kiosk Order, Inter*Act may
fill any percentage of the total number of Kiosks remaining of
the Kiosk Order using another manufacturer without breaching
this Agreement. For those Kiosks that Inter*Act does obtain
from Coleman, Inter*Act will pay Coleman at the Rate agreed
under the Kiosk Order. Nothing herein should be construed as
limiting any other right or remedy available to Inter*Act or
Coleman pursuant to this Agreement.
3.9 Inter*Act will pay all shipping costs for Shipment and
delivery of Kiosks. Inter*Act will assume the risk of loss or
damage during transit of the Kiosks. Inter*Act shall have the
responsibility to provide the correct address for Shipment of
Kiosks.
3.10 Inter*Act shall pay all sales and use taxes associated with
the sale of Kiosks under this Agreement. Upon audit of Coleman
by any state, county, municipality or other taxing authority
resulting in the assessment of sales taxes for Kiosks sold to
Inter*Act under this Agreement, Inter*Act shall pay or
reimburse Coleman for any such sales taxes.
4. Payment.
Coleman shall have the right to invoice Inter*Act weekly for all Kiosks
Shipped to Inter*Act. The invoice shall identify the number of Kiosks
Shipped, the day of Shipment, the Rate charged for the Kiosks Shipped
and the Invoice Date. Inter*Act shall pay each invoice within thirty
(30) days of the Invoice Date. Coleman shall send a copy of the invoice
to Inter*Act by facsimile on the Invoice Date and shall deposit the
original invoice in the U.S. Mail within five (5) days of the Invoice
Date. Notwithstanding anything in this Agreement to the contrary, the
failure by Inter*Act to pay an invoice within thirty (30) days of the
Invoice Date shall be a material breach of this Agreement, relieving
Coleman of its obligation to meet any Shipping Schedule, without
notice, until payment is made. If Inter*Act disputes the accuracy of an
invoice, Inter*Act shall have the obligation to pay the invoice within
thirty (30) days of the Invoice Date and if Inter*Act's objection shall
be correct, Coleman shall refund to Inter*Act the disputed amount, plus
any late charges paid by Inter*Act. Inter*Act shall pay Coleman a late
charge of one and one-half percent (1 1/2%) per month for all amounts
invoiced to Inter*Act which are not paid within thirty (30) days of the
Invoice Date. In addition to any late fees, Inter*Act shall pay Coleman
for all costs of collection, including reasonable attorneys fees, of
all amounts due Coleman under this Agreement.
5. Price Changes.
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The Rate to be paid for each Kiosk under a Kiosk Order may be changed
only by the written mutual agreement of Inter*Act and Coleman.
6. Representations and Warranties.
6.1 Inter*Act represents and warrants that:
6.1.1 Inter*Act will pay the rates for the Kiosks
in accordance with Section 4.
6.1.2 Within fifteen (15) days after the end of
each month, Inter*Act shall provide to
Coleman a copy of an unaudited balance sheet
dated as of the last day of the month just
ended.
6.2 Coleman represents and warrants that;
6.2.1 Coleman shall meet the Shipping Schedule for
Kiosks, subject to delays in obtaining the
inventory to manufacture the Kiosks because
of a Force Majeure Event or delays
attributable to the Software;
6.2.2 All Kiosks delivered to Inter*Act by Coleman
will conform to the Specifications, de
minimis deviations not affecting the
performance of the Kiosks excepted;
6.2.3 The Kiosks shall be manufactured with
quality workmanship;
6.2.4 EXCEPT AS SET FORTH HEREIN, COLEMAN MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE KIOSKS,
INCLUDING, WITHOUT LIMITATION,
MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE; and
6.2.5 During the period that any manufacturers'
warranty for a defective piece of Hardware
used as a component of a Kiosk is in force
and effect, Coleman shall repair or replace
the defective piece of Hardware upon
Inter*Act's delivery of the piece of
defective Hardware to Coleman. Inter*Act
shall bear all cost and expense of removal
of the piece of defective Hardware from the
Kiosk, the shipment of the defective piece
of Hardware to Coleman and the
reinstallation in the Kiosk of the repaired
defective piece of Hardware or the
replacement for the defective piece of
Hardware. Coleman shall not be responsible
for any loss of revenue or damage during the
time the Kiosk is not working because of the
defective piece of Hardware. Coleman's sole
obligation shall be to repair, have the
manufacturer repair or to replace
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the piece of defective Hardware. Coleman
shall bear the cost shipping the repaired
defective piece of Hardware or the
replacement for the defective piece of
Hardware to Inter*Act. If Coleman receives a
piece of defective Hardware from Inter*Act
which is not covered by the manufacture's
warranty, Coleman shall return the defective
piece of Hardware to Inter*Act without
repair or further obligation, unless Coleman
and Inter*Act otherwise agree to some other
disposition of the defective piece of
Hardware.
6.3 Neither party shall take any action or fail to take any action
during the term of this Agreement which would cause its
representations and warranties to the other party stated
herein to become untrue.
7. Termination of Agreement.
This Agreement may be terminated at any time as set forth below,
subject to completion of any obligations by the Parties under any
outstanding Kiosk Order:
7.1 by mutual written agreement of Coleman and Inter*Act;
7.2 by Coleman or Inter*Act if: (i) the transaction contemplated
hereby shall violate an non-appealable final order, decree or
judgment of any court or governmental body having competent
jurisdiction; or (ii) there shall be a statue, rule or
regulation which makes the transaction contemplated hereby
illegal or otherwise prohibited;
7.3 by either Party upon the material breach of the Agreement by
the other party, if after providing written notice of such
alleged breach, such breach is not cured within sixty (60)
days after receipt of such notice; or
7.4 by Inter*Act, if within sixty (60) days of placing a new Kiosk
Order with Coleman, Coleman fails to accept a Rate proposed by
Inter*Act for a new Kiosk Order, which is equal to or greater
than the average of the rates quoted in good faith and
submitted in writing to Inter*Act and delivered to Coleman at
the time of placement of the new Kiosk Order, by three (3)
other manufacturers of kiosks for the same quantity of Kiosks
of equal quality and comparable specifications as the Kiosks
specified in the new Kiosk Order to Coleman (unless there are
less than three (3) qualified manufacturers of kiosks, in
which case the average of the rates quoted by the actual
number of manufacturers of kiosks mutually agreed to by
Inter*Act and Coleman as qualified, in terms of their ability
to produce kiosks of comparable quantity and quality, shall be
an acceptable average).
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7.5 by Inter*Act, if Inter*Act has delivered written notice to
Coleman of Coleman's failure to meet the Shipping Schedule and
such failure by Coleman has continued for sixty (60) days
after the written notice and Coleman's failure to meet the
Shipping Schedule is not due to a Force Majeure Event or the
failure of the Software.
8. Intellectual Property Rights and Limited License.
8.1 Except as otherwise provided in this Agreement, Coleman
acknowledges and agrees this Agreement gives it no right,
title or interest in or to any of: (i) the Proprietary
Property; (ii) the Specifications; (iii) the name, trademarks,
and service marks of Inter*Act; or (iv) all patents owned or
controlled or licensed by Inter*Act now or subsequently during
the Term, except as set forth in this Agreement and except for
information in the public domain. Inter*Act acknowledges and
agrees that Coleman has the right to manufacture kiosks with
any software, but the Software and using any design but the
Proprietary Design.
8.2 As long as this Agreement is in effect, Inter*Act hereby
grants Coleman a non-exclusive, non-assignable limited license
to use: (i) the Proprietary Property; (ii) the object code
form of the Software; (iii) the Specifications; (iv) the name,
trademarks, and service marks of Inter*Act, and (v) all
non-expired patents owned or controlled or licensed by
Inter*Act necessary to manufacture the Kiosks now or
subsequently during the Term, solely in connection with
Coleman's rights and obligations under this Agreement and for
no other purpose. Coleman shall immediately return all
licensed material upon the termination or expiration of this
Agreement for any reason. Nothing in this Section 8.2 shall
limit Coleman's ability to manufacture kiosks in accordance
with Section 2.1.2 of this Agreement.
9. Miscellaneous.
9.1 Confidentiality. Without the prior written consent of
Inter*Act, Coleman will not disclose to any third party (other
than to its bank, and/or any investor in Coleman and their
representatives, but only in conjunction with the financing of
the transaction contemplated by this Agreement) the
Proprietary Property or information identified by Coleman and
Inter*Act as confidential, except (i) as required by law and
(ii) information otherwise available in the public domain.
9.2 Non-Competition. Coleman agrees that, from the Closing Date
until the termination of this Agreement, it shall not directly
or indirectly: (i) sell Kiosks to or produce kiosks for the
excluded entities identified on Schedule 4 hereto (the
"Excluded Entities"); (ii) solicit, or attempt to solicit, for
the
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purpose of hiring, contracting, employing or engaging any of
the Inter*Act's employees not identified in the Business Asset
Purchase Agreement of even date herewith; provided, however,
that nothing contained in this Section 9 shall be deemed to
prohibit Coleman from acquiring or holding, solely for
investment, publicly traded securities of any corporation any
activities of which are related to Inter*Act's business so
long as such securities do not, in the aggregate, constitute
more than 2% of any class or series of outstanding securities
of such corporation. During the term of this Agreement,
Inter*Act agrees not to solicit, or attempt to solicit, for
the purpose of hiring, contracting, employing or engaging any
of the employees of Coleman. In addition, from the Closing
Date until the second anniversary of the termination of this
Agreement, Coleman shall not directly or indirectly, sell or
produce kiosks for use in supermarkets to any person, whether
an individual or entity, other than Inter*Act.
9.3 Public Announcements. Both Parties shall be entitled to issue
any press release or make any other public statement with
respect to this Agreement and the transaction contemplated,
provided for marketing purposes, only general statements of
Rate ranges and/or Kiosks ordered may be disclosed and the
name or identity of Inter*Act shall not be disclosed in making
these general statements of Rates and Kiosks ordered, without
the consent of the other party, such consent to not be
unreasonably withheld.
9.4 Binding Nature and Assignment. This Agreement shall be binding
on the parties hereto and their respective successors and
permitted assigns, but neither party may, or shall have the
power to, assign this Agreement without the prior written
consent of the other party.
9.5 Headings. The headings used herein are for reference and
convenience only and do not constitute part of this Agreement.
9.6 No Third Party Beneficiaries. The parties agree that this
Agreement is for the benefit of Inter*Act and Coleman and is
not intended to confer any rights or benefits on any third
party, including any employee, vendor, or customer of either
party, and that there are no third party beneficiaries as to
this Agreement or any part or specific provision of this
Agreement. The foregoing shall not limit the rights of any
assignees permitted hereunder, including without limitation
Coleman.
9.7 Approvals and Similar Actions. Where agreement, approval,
acceptance, consent or similar action by either party hereto
is required by any provision of this Agreement, such action
shall not be unreasonably delayed or withheld.
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9.8 Severability. If any provision of this Agreement should be
held invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, any such provision
shall be deemed restated to reflect the original intention of
the parties as nearly as possible in accordance with
applicable law.
9.9 No Waiver. No delay or omission by either party hereto to
exercise any right or power hereunder shall impair such right
or power or be construed to be a waiver thereof. A waiver by
any of the parties hereto of any of the covenants to be
performed by the other or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or
of any other covenant herein contained.
9.10 Attorneys' Fees. If any legal action or proceeding is brought
for the enforcement of an arbitration award pursuant to this
Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with any of the provisions
of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and other costs incurred in
addition to any other relief to which it may be entitled.
9.11 Amendments. No amendment, change, waiver, or discharge hereof
shall be valid unless in writing and signed by an authorized
representative of the party against which such amendment,
change, waiver, or discharge is sought to be enforced.
9.12 Entire Agreement. This Agreement, including any Schedules and
Exhibits referred to herein, each of which is incorporated
herein for all purposes, constitutes the entire agreement
between the parties hereto with respect to the subject matter
hereof and there are no representations, understandings or
agreements relative hereto which are not fully expressed
herein.
9.13 Survival. The provisions of Sections 2, 4, 6, 7, and 9 shall
survive the termination or expiration of this Agreement for
any reason.
9.14 Governing Law. This Agreement shall be governed by and
construed in all respects in accordance with the laws of South
Carolina without regard to its conflicts of law rules.
9.15 Notices. Except for invoices for Kiosks Shipped to Inter*Act,
which may be sent solely to Inter*Act by deposit in the U.S.
mails to Inter*Act's address set forth below, all notices,
consents or other communications required or permitted to be
given by any party hereunder shall be in writing (including
telecopy or similar writing) and shall be given by delivery or
by certified or registered mail, postage prepaid, as follows:
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9.15.1 If to Inter*Act:
14 Westport Avenue
Norwalk Connecticut 06851
Attention: President
Telecopy: 203-750-0202
With a copy to:
Schell Bray Aycock Abel & Livingston, L.L.P.
Suite 1500, Renaissance Plaza
230 North Elm Street
Greensboro, North Carolina 27401
Attention: Doris R. Bray, Esq.
Telecopy: 910-370-8830
9.15.2 If to Coleman:
201 South Orange Avenue
Suite 1300
Orlando, Florida 32801
Attention: President
Telecopy: (407) 244-5753
With a copies to:
Richard H. Levine
201 South Orange Avenue
Suite 1300
Orlando, Florida 32801
Telecopy: (407) 244-5753
Worth Roberts
17 Lockwood Drive
Suite 401
Charleston, South Carolina 29401
Telecopy: (803) 937-4106
Joseph T. Ritchey, Esq.
Sirote & Permutt, P.C.
2222 Arlington Avenue South
Birmingham, Alabama 35205
Telecopy: (205) 930-5301
or at such other address or telecopy number (or other similar number)
as any party may from time to time specify to the other parties hereto.
Any notice, consent or
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other communication required or permitted to be given hereunder shall
be deemed to have been given on the date of mailing, personal delivery
or telecopy (provided the appropriate answer back is received) thereof
and shall be conclusively presumed to have been received on the second
business day following the date of mailing or, in the case of personal
delivery, the actual day of personal delivery thereof, or, in the case
of telecopy delivery, when such telecopy is transmitted, except that a
change of address shall not be effective until actually received.
9.16 Exhibits and Schedules. The Exhibits and Schedules are part of
this Agreement as if set forth fully herein.
9.17 Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use all
reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper
or advisable, under applicable laws and regulations or
otherwise, to fulfill its obligations under this Agreement and
to consummate the transaction contemplated by this Agreement.
9.18 Disclosure on Schedules. For purposes of this Agreement, a
disclosure by any party hereto of any fact on any Schedule
shall be deemed a disclosure on every Schedule of any party
hereto to the extent such disclosure properly could have been
made thereon but was not made.
9.19 Resolution of Disputes; Consent to Jurisdiction.
9.19.1 The parties hereto agree that upon the
failure of mediation as described in 9.19.2
the sole and exclusive remedy for any
dispute between the parties arising out of
or relating to this Agreement shall be the
arbitration procedure contained in this
Section. Such arbitration procedure shall
take place in Charlotte, North Carolina.
9.19.2 (a) The parties shall attempt in good
faith to resolve any dispute arising
out of or relating to this Agreement
promptly by negotiations between the
parties who have authority to
settle the controversy. Either party
may give the other party written
notice of any dispute not resolved
in the normal course of business.
Within thirty (30) days after
delivery of said notice, both
parties shall meet at a mutually
acceptable time and place (by
mutual agreement, such meeting may
be held by telephone), and
thereafter as often as they deem
necessary, to exchange relevant
information and to attempt to
resolve the dispute. If the matter
has not been resolved within
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sixty (60) days of the disputing
party's notice, or if the parties
fail to meet within thirty (30)
days, either party may initiate
mediation of the controversy or
claim as provided in paragraph (b)
below.
(b) If any dispute has not been resolved
by negotiation as provided in
paragraph (a) hereof, the parties
shall endeavor to resolve the
dispute by mediation under the then
current Model Procedure for
Mediation of Business Disputes of
the Center for Public Resources,
Inc. ("CPR"), 366 Madison Avenue,
New York, New York 10017. The
neutral third party will be selected
from the CPR Panel of Neutrals. If
the parties encounter difficulty in
agreeing on a neutral, they will
seek the assistance of CPR in the
selection process. Unless otherwise
agreed by the parties, the place of
mediation shall be in Charlotte,
North Carolina, at a site mutually
acceptable to the parties.
(c) Any dispute that has not been
resolved by mediation, as provided
in paragraph (b) hereof, within
sixty (60) days of the initiation of
such procedure (the "Mediation
Period"), shall be finally settled
by arbitration in accordance with
Section 9.19.3.
(d) The parties shall bear their
respective costs in connection with
the dispute resolution procedures
(non- litigation) described in
paragraphs (a) and (b) hereof,
except that the parties shall share
equally the fees and expenses of any
neutral third party or arbitrator
and the costs of any facility used
in connection with such dispute
resolution procedures.
(e) With respect to the non-binding
procedures provided in paragraphs
(a) and (b) hereof, if a negotiator
intends to be accompanied at a
meeting by an attorney, the other
negotiator shall be given at least
three (3) working days' notice of
such intention and may also be
accompanied by an attorney. All
negotiations relating to any non-
litigated procedure provided herein
are confidential and shall be
treated as compromise and settlement
negotiations for purposes of the
rules of evidence of all applicable
jurisdictions.
14
9.19.3 (a) In the event the parties hereto
cannot resolve a dispute by
mediation, they shall jointly select
one qualified individual to
arbitrate such dispute. In the
event the parties are unable to
agree on such an individual within
forty-five (45) days of the end of
the Mediation Period, each party
shall select one qualified
individual who is not an Affiliate.
Those individuals shall in turn
select a third qualified individual
within ten (10) days thereafter and,
if they are unable to agree on a
third qualified individual, such
third individual will be appointed
by the American Arbitration
Association. The three arbitrators
shall be given access to whatever
documentation and personnel they
deem appropriate and shall render a
decision within thirty (30) days of
the appointment of the third
arbitrator. Their decision shall be
by a majority vote and shall be
final and binding on the parties.
The expenses incident to the
arbitration shall be borne by the
losing party in such arbitration,
unless the arbitrator(s) rule
otherwise at the time of decision.
Pending the decision of the
arbitrator(s), the party whose
actions caused the dispute shall
continue to act as it deems
appropriate. In the event the
arbitrator(s) determine that any
money is due and owing to either
party, such sum shall be paid within
ten (10) days of the decision.
(b) Except as provided in this Section,
this Agreement shall be subject to
the rules then obtaining of the
American Arbitration Association.
The arbitrators shall have no power
to alter or modify any express
provision of this Agreement, or to
render any award which by its terms,
effects any such alteration or
modification. Judgement upon the
award rendered may be entered by any
court having jurisdiction. If any
action or proceeding is brought to
enforce the decision of the
arbitrators, the prevailing party
shall be entitled to recover its
reasonable attorney's fees and other
costs incident to such action or
proceeding.
(c) The parties hereto consent to the
jurisdiction of the arbitrators for
all disputes covered by this Section
9.19 and expressly waive any rights
they may have to contest the
jurisdiction, venue or authority of
such arbitrators.
15
IN WITNESS WHEREOF, the Parties, each intending to be legally
bound, have each caused this Agreement to be executed on the date first set
forth above.
INTER*ACT SYSTEMS, INC. COLEMAN RESEARCH CORPORATION
By: _________________________ By: _____________________________
Name:________________________ Name:_____________________________
Title:_______________________ Title:_____________________________
Date: _______________________ Date: _____________________________
16
SCHEDULE 1
INITIAL ORDER AND RATE
INTERACTIVE PROMOTION NETWORK TERMINAL
The initial order is for 5,000 terminals to be delivered over a period estimated
to be eighteen months in accordance with the Shipping Schedule, attached to this
Agreement as Schedule 9. This initial order shall be complete upon delivery of
the 5,000 terminals.
UNIT DESCRIPTION
The Interactive Promotion Network Terminal consists of the following general
components:
O Cabinet, per Inter*Act Systems, Inc. proprietary design Drawing Number:
D-0A-003- 01-01-0A, Assembly Illustration, Unit Promotions Terminal.
O 17" Monitor with touch activated screen
O 80mm High Speed Printer (Swecoin)
O Omni Directional Laser Scanner
O Speakers configured for stereo sound delivery
O Computer, Pentium Based P-120 or better
O Signage Package, including lightbox as presently configured in the
design
O Corrugated Packaging, Foam and palletized for Shipping
O All miscellaneous parts not included as per Document #C-FP-001-01-1-OA
To be built as specified in the Bill of Materials, internal document
D-FP-001-01-1-OA
INTER*ACT'S PRICE: $7,200.00
TERMS: U.S. currency
FOB Columbia, SC Plus all applicable taxes Net 30 days from
date of invoice
SCHEDULE 1.4
CURRENT EMPLOYEES
Wages
Tejay M. Beaupariant $60,000.00/annual
703 Oakland Avenue
West Columbia, SC 29169
803-928-1839
Roger A. Cloutier $15.00/hr.
2011 Cheltenham Lane
Columbia, SC 29223
803-790-4443
John A. Gambrill $12.50/hr.
4939 McDonald Avenue
West Columbia, SC 29172
803-755-7667
Norman L. Sterrett $100,000.00/annual
311 Timberhill Court
Columbia, SC 29212
803-781-5448
Dustin L. Tucker $10.00/hr.
105 Turnberry Lane
Lexington, SC 29072
803-931-0666
Stephen D. White $15.00/hr.
412 Two Notch Road, #15
Lexington, SC 29073
803-356-4147
Norman R. Williams $35,000.00/annual
3127 Cimarron Trail
West Columbia, SC 29170
803-796-1027
SCHEDULE 1.7
CONTRACTS
1. The ADT Security Systems Contract dated December 22, 1994, a copy of
which is attached hereto as 1.7(a).
2. Buyer is assuming Seller's obligations under the purchase orders
identified on the attached 1.7(b) to purchase the items which have not been
delivered to Seller and are not included in the definition of Inventory,
except purchase orders for servers, items needed to support or related to the
servers, or items which are not components usable to manufacture the Kiosks
to be offered for sale to Seller as contemplated under the Kiosk Agreement,
which shall remain the obligation of Seller.
3. Buyer is assuming the obligation to pay for the Recent Inventory,
provided Buyer shall not be obligated to pay for any portion of the Recent
Inventory which is servers, items needed to support or related to the
servers, or items which are not components usable to manufacture the Kiosks
to be offered for sale to Seller as contemplated under the Kiosk Agreement.
SCHEDULE 1.9
Inventory Determined by Physical Inventory
See List of Inventory attached hereto.
SCHEDULE 9
SHIPPING SCHEDULE FOR INITIAL KIOSK ORDER
The Initial Kiosk Order as agreed by Inter*Act and Coleman is
attached as Schedule 1 to this Agreement. The Initial Kiosk Order is for 5,000
Kiosks to be Shipped during the 18 months following the date of this Agreement.
The Shipping Schedule for these Kiosks shall be determined as follows:
A. Until the 5,000 Kiosks have been Shipped under the Initial
Kiosk Order, the Shipping Schedule shall be based on a continuous three (3)
month rolling firm Shipping commitment as agreed by Coleman and Inter*Act and an
additional three (3) month rolling Shipping estimate submitted by Inter*Act. As
the first month of the three (3) month rolling firm commitment ends, Inter*Act
and Coleman must agree on the Shipping Schedule for the new third month of the
three (3) month rolling firm Shipping commitment and Inter*Act must submit the
next three (3) month rolling Shipping estimate to Coleman. The three (3) month
rolling firm Shipping commitment shall not be changed without the written
consent of Coleman and Inter*Act.
B. To commence the operation of A, above, the three (3) month
rolling firm Shipping commitment and three (3) month rolling Shipping estimate
are as follows:
THREE (3) MONTH ROLLING FIRM SHIPPING COMMITMENT
Month Kiosks
September, 1996 139
October, 1996 518
November, 1996 551
Total 1208
THREE (3) MONTH ROLLING SHIPPING ESTIMATE
Month Kiosks
December, 1996 341
January, 1997 695
February, 1997 619
Total 1655
In continuation of A, prior to the end of September 1996,
Coleman and Inter*Act must agree to a firm commitment for the Shipment for
December, 1996 to replace September, 1996 and Inter*Act must submit a new three
(3) month rolling Shipping estimate for January, 1997, February, 1997 and March,
1997. This same process shall continue each month thereafter until the Initial
Kiosk Order is satisfied by both Coleman and Inter*Act.
29