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EXHIBIT 10.01
MARKETING AND SERVICE AGREEMENT
THIS MARKETING AND SERVICE AGREEMENT (this "Agreement") is entered into
effective as of the 1st day of November, 1999, by and between EZConnect, Inc.,
a Nevada corporation with its principle business located at 716 East 4500
South Suite N-142, Murray, Utah 84107 (the "Company"), Tavat.com, LLC
("Tavat") and Prudential California Realty, a California corporation with its
principle offices located at 1901 Olympic Boulevard, Third Floor, Walnut
Creek, California 94596 ("Prudential").
Premises
a) The Company has developed a proprietary process whereby it assist
individuals in disconnecting and reconnecting utility and other services.
b) Prudential is an independently owned and operator of the Prudential Real
Estate Affiliates, Inc. and is interested in providing marketing and other
assistance to the Company.
c) The Company and Prudential agree that certain synergism exist in their
organizations and that each can benefit by working together on a joint
marketing plan. Accordingly, the parties wish to set forth in this Agreement
the terms and conditions of their understandings
Agreement
Based on the forgoing premises, and for and in consideration of the mutual
promises and covenants hereinafter set forth, the benefits to the parties to
be derived therefrom and other good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, it is agreed as follows:
1. Services. The Company hereby retains Prudential and Prudential hereby
agrees to assist the Company in creating a co-branding and marketing program
designed to introduce the Company's products and services to Prudential's real
estate agents and to encourage those agents to market the Company's products
to their clients. Prudential will also assist the Company with the
introduction and eventual use of the Company's products and services by title
companies, including but not limited to those title companies which are
related to Prudential through common ownership. This marketing and co-
branding will be performed first in the State of California and then on a
national basis. Prudential will also assist the Company with integrating its
web site with Prudential's web site.
2. Term. This Agreement shall remain in full force and effect from the date
set forth above and terminate upon the completion of the Services.
3. Compensation. The Company shall pay, and Prudential and Tavat shall
accept, for the Services performed (i) an option to purchase up to one hundred
seventy thousand (170,000) shares of the Company's common stock, par value
$0.001 per share (the "Common Stock") at any time within two years from the
date of this Agreement at an exercise price of one dollar and forty seven
cents ($1.47) per share, (ii) an option to purchase up to four hundred thirty
three thousand (433,000) shares of Common Stock any time within two years from
the date of this Agreement at an exercise price equal to the ten day average
closing bid price for shares of Common Stock immediately prior to the date of
this Agreement, and (iii) Prudential shall receive sixty percent (60%) of all
transaction fees derived from use of the Company's system and products when
used at Prudential or its related title company Orange Cost Title. The shares
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of Common Stock receivable on exercise of the above options shall carry
standard "piggy back" registration rights. The exercise price for the option
to purchase one hundred seventy thousand (170,000) shares will be reduced by
five dollars ($5.00) per transaction for every client, entity or organization
who uses the Company's system to change their utilities where such client was
referred to the Company or used the Company's system set up through
Prudential, its sister companies and any client obtained through the marketing
efforts of Prudential.
4. Directorship. Ed Krafchow, the president of Prudential shall be appointed
to the Company's board of directors to serve until the Company's next annual
shareholder meeting and until his successor is duly elected and qualified.
Mr. Krafchow shall receive options to purchase up to fifty thousand (50,000)
shares of Common Stock at an exercise price equal the ten day average closing
bid price for shares of Common Stock immediately prior to the date of this
agreement. The exercise period of the options shall be five years. Mr.
Krafchow's options shall carry standard "piggy back" registration rights and
if permitted be included in any registration statement on form S-8. Mr.
Krafchow may assign his options to Tavat or any of his "estate and retirement
planning vehicles."
5. Reimbursement for Costs. The Company and Prudential shall each pay their
own expenses related to this Agreement.
6. Compliance with Securities Laws. The consummation of this Agreement and
the transactions herein contemplated, including the sale of options and Common
Stock (the "Securities") by the Company to Prudential as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act of 1933,
as amended, and certain state statues. Such transactions shall be consummated
in reliance on exemptions from the registration and prospectus delivery
requirements of such statutes which depend, inter alia, upon the circumstances
under which Prudential acquires such Securities. In connection with reliance
upon exemptions from the registration and the prospectus delivery
requirements for such transactions, Prudential shall provide the Company with
such representations and assurances as the Company may reasonably request.
The parties shall cooperate and utilize their best efforts to document
reliance on exemptions from registration under applicable federal and state
securities laws. Prudential understands that the Securities have not been
registered under the Securities Act and must be held indefinitely without any
transfer, sale, or other disposition unless such shares are subsequently
registered under the Securities Act or registration is not required under the
Securities Act in reliance on an available exemption. The Securities to be
acquired upon exercise of options by Prudential under the terms of this
Agreement will be acquired for Prudential's own account, for investment, and
not with the present intention of resale or distribution of all or any part of
the Securities. Prudential agrees that it will refrain from transferring or
otherwise disposing of any of the Securities, or any interest therein, in such
manner as to violate the Securities Act or any applicable state securities law
regulating the disposition thereof. Prudential is an "accredited investor"
within the meaning of Regulation D promulgated under the Securities Act and
has adequate means for providing for its current needs and possible personal
contingencies and has no need now and anticipates no need in the foreseeable
future to sell the Securities. Prudential understands that the Securities are
being offered and sold in reliance on specific exemptions from the
registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of Prudential's
representations, warranties, agreements, and understandings set forth herein
to determine Prudential's suitability to acquire the Securities.
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7. Representation's of the Company.
a) Private Offering. The offer, offer for sale, and sale of the Securities
have not been and will not be registered with the Securities and Exchange
Commission (the "Commission"). The Securities shall be offered for sale and
sold pursuant to the exemptions from the registration requirements of Section
5 of the Securities Act provided by Sections 3(b) and/or 4(2) thereof. The
Company shall, insofar as its own actions are concerned, conduct the offer and
sale in compliance with the requirements of Regulation D of the general rules
and regulations under the Securities Act, and the Company will file
appropriate notices of the offer and sale on Form D with the Securities and
Exchange Commission.
b) Approval of Agreement. The Company has full corporate power, authority,
and legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, and otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated including the
issuance of the options and underlying shares of Common Stock. The board of
directors of the Company has authorized and approved the execution, delivery,
and performance of this Agreement and the transactions contemplated hereby
including the issuance of the Securities.
c) Legal Right. The performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a material breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute (except federal and state securities laws, compliance with
which is elsewhere provided for in particular detail), indenture, mortgage or
other agreement or instrument to which the Company is a party or by which it
is bound by any order, rule or regulation directed to the Company or its
affiliates by any court or governmental agency or body having jurisdiction
over them; and no other consent, approval, authorization or action is required
for the consummation of the transactions herein contemplated other than such
as have been obtained.
d) Organization. The Company has been duly organized and is now, and always
during the period of the offer and sale will be, a validly existing
corporation under the laws of the state of Nevada lawfully qualified to
conduct the business for which it was organized and which it proposes to
conduct.
8. Representations of Prudential. Prudential has full corporate power,
authority, and legal right and has taken, or will take, all action required by
law, its articles of incorporation, bylaws, and otherwise to execute and
deliver this Agreement and to consummate the transactions herein contemplated.
9. Independent Contractor. Prudential is retained under the terms of this
Agreement as an independent contractor and nothing herein shall be construed
as creating an employer/employee relationship, partnership or joint venture
between the parties. Prudential shall be solely liable for the payment of any
taxes imposed or arising out of the payment of the compensation to it by the
Company as set forth in this Agreement.
10. Authority to Act. Prudential shall not have the authority to act on
behalf of the Company or to enter into agreements on behalf of the Company.
11. Nondisclosure of Proprietary and Confidential Information. Recognizing
that the Company is presently engaged, and may hereafter continue to be
engaged, in the research and development of processes, the manufacturing of
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products or performance of services, which involve experimental and inventive
work and that the success of the Company's business depends upon the
protection of the processes, products and services by patent, copyright or by
secrecy and that Prudential has had, or during the course of its engagement
may have, access to Proprietary and Confidential Information, as herein
defined, of the Company or other information and data of a secret or propriety
nature of the Company which the Company wishes to keep confidential and
Prudential has been furnished, or during the course of its engagement may be
furnish, such information to the Company, Prudential agrees and acknowledges
that:
a) The Company has exclusive property rights to all Proprietary and
Confidential Information and Prudential hereby assigns all rights it might
otherwise possess in any Proprietary and Confidential Information to the
Company. Except as required in the performance of its duties to the Company,
Prudential will not at any time during or after the term of its engagement,
which term shall include any time in which Prudential may be retained by the
Company as a consultant, directly or indirectly use, communicate, disclose or
disseminate any Proprietary or Confidential Information of a secret,
proprietary, confidential or generally undisclosed nature relating to the
Company, its products, customers, processes and services, including
information relating to testing, research, development, manufacturing,
marketing and selling.
b) All documents, records, notebooks, notes, memoranda and similar
repositories of, or containing, Proprietary and Confidential Information or
any other information of a secret, proprietary, confidential or generally
undisclosed nature relating to the Company or its operations and activities
made or complied by Prudential at any time or made available to it prior to or
during the term of its engagement by the Company, including any and all copies
thereof, shall be the property of the Company, shall be held by it in trust
solely for the benefit of the Company, and shall be delivered to the Company
by it on the termination of its engagement or at any other time on the request
of the Company.
c) Prudential will not assert any rights under any inventions, trademarks,
copyrights, discoveries, concepts or ideas, or improvements thereof, or know-
how related thereto, as having been made or acquired by it prior to it being
engaged by the Company or during the term of its engagement if based on or
otherwise related to Proprietary or Confidential Information.
12. Assignment of Inventions.
a) All Inventions shall be the sole property of the Company, and Prudential
agrees to perform the provisions of this Section 12 with respect thereto
without the payment by the Company of any royalty or any consideration
therefor other than the regular compensation paid to Prudential under this
Agreement.
b) Prudential hereby assigns to the Company all of its rights to such
Inventions, and to applications for United States and/or foreign letters
patent or copyrights and to United States and/or foreign letters patent or
copyrights granted upon such Inventions.
c) Prudential shall acknowledge and deliver promptly to the Company, without
charge to the Company, but at its expense, such written instruments (including
applications and assignments) and do such other acts, such as giving testimony
in support of Prudential's inventorship, as may be necessary in the opinion of
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the Company to obtain, maintain, extend, reissue and enforce United States
and/or foreign letters patent and copyrights relating to the Inventions and to
vest the entire right and title thereto in the Company of its nominee.
Prudential acknowledges and agrees that any copyright developed or conceived
of, by Prudential during the term of its work for the Company which is related
to the business of the Company shall be a "work for hire" under the copyright
law of the United States and other applicable jurisdictions.
d) Prudential represents that its performance of all the terms of this
Agreement and as a consultant to the Company does not and will not breach any
trust prior to its this Agreement. Prudential agrees not to enter into any
agreement either written or oral in conflict herewith and represents and
agrees that it has not brought and will not bring with it to the Company or
use in the performance of its responsibilities at the Company any materials or
documents of a former Company which are not generally available to the public,
unless it has obtained written authorization from the former Company for their
possession and use, a copy of which has been provided to the Company.
The terms used above shall have the following meanings:
"Confidential Information" means information (i) disclosed to or known by
Prudential as a consequence of or through its work with the Company, (ii) not
generally known outside the Company, and (iii) which relates to the Company's
business. Confidential Information includes, but is not limited to,
information of a technical nature, such as methods and materials, trade
secrets, inventions, processes, formulas, systems, computer programs, and
studies, and information of a business nature such as project plans, market
information, costs, customer lists, and so forth.
"Developments" means all Inventions, whether or not patentable, computer
programs, copyright works, mask works, trademarks, Confidential Information,
Works of Authorship, and other intellectual property, made, conceived or
authored by Prudential, alone or jointly with others, while working for or
with the Company; whether or not during normal business hours or on the
Company's premises, that are within the present or reasonably contemplated
scope of the Company's business at the time such Developments are made,
conceived, or authored, or which result from or are suggested by any work
Prudential or others may do for or on behalf of the Company;
"Invention" means discoveries, concepts, and ideas, whether or not patentable
or copyrightable, including but not limited to improvements, know-how, data,
processes, methods, formulae, and techniques, as well as improvements thereof,
or know-how related thereto, concerning any past, present or prospective
activities of the Company which Prudential makes, discovers or conceives
(whether or not during the hours of his engagement of with the use of the
Company's facilities, materials or personnel), either solely or jointly with
others during its engagement by the Company or any affiliate and, if based on
or related to Proprietary Information, at any time after termination of such
engagement.
"Intellectual Property" means Inventions, Confidential Information, Works of
Authorship, patent rights, trademark rights, service mark rights, copyrights,
know-how, Developments and rights of like nature arising or subsisting
anywhere in the world, in relation to all of the foregoing, whether registered
or unregistered.
13. Shop Rights. The Company shall also have the royalty-free right to use
in its business, and to make, use and sell products, processes and/or services
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derived from any inventions, discoveries, concepts and ideas, whether or not
patentable, including but not limited to processes, methods, formulas and
techniques, as well as improvements thereof or know-how related thereto, which
are conceived of or made by Prudential during the period it is engaged by the
Company or with the use or assistance of the Company's facilities, materials,
or personnel.
14. Design Rights. Any design, name, mark or other tangible material in
final form that is delivered or prepared by Prudential for the Company
pursuant to this Agreement will become the exclusive property of the Company.
15. Non-Compete. Prudential hereby agrees that during the term of this
Agreement and for the period of two years from the termination thereof, that
Prudential will not:
a) Within any jurisdiction or marketing area in the United States own,
manage, operate, or control any business of the type and character engaged in
and competitive with the Company or any subsidiary thereof;
b) Solicit any similar business to that of the Company's for, or sell any
products that are in competition with the Company's products to, which is, as
of the date hereof, a customer or client of the Company or any of its
subsidiaries, or was such a customer or client thereof within two years prior
to the date of this Agreement; or
c) Solicit the employment of, or hire, any full time employee employed by the
Company or its subsidiaries as of the date of termination of this Agreement.
16. Admission of Prudential. By signing this Agreement, Prudential expressly
recognizes and acknowledges:
a) Admission of Need. The Company has great need in protecting its
proprietary interest in and goodwill associated with the business of the
Company;
b) Admission of Reasonableness. The restrictive provisions contained herein
are reasonable and acceptable to Prudential, including those provisions
relating to time and geographical coverage; and
17. Assignment. The Contractor may not assign the obligations set forth
herein.
18. Entire Agreement. This Agreement is supersedes and supplants all prior
agreements between the parties. This Agreement is the only agreement or
understanding between the parties hereto with respect to the advice and
services to be provided by Contractor to the Company. All negotiations,
commitment, and understandings of both parties have been incorporated herein.
This Agreement cannot be modified except by a written document signed by both
parties to this Agreement.
19. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Utah and venue shall be in the State
of Utah.
20. Attorneys' Fees. In the event that either party hereunder institutes any
legal proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party, all costs incurred in connection with such
proceeding, including reasonable attorneys' fees and costs .
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21. Severability. If, and to the extent that, any court of competent
jurisdiction holds any provision of this Agreement to be invalid or
unenforceable, such holding shall in no way affect the validity of the
remainder of this Agreement.
22. Waiver. No failure by any party to insist on the strict performance of
any convenient, duty, agreement, or condition of this Agreement, or to
exercise any right or remedy consequent on a breach thereof, shall constitute
a waiver of any such breach or any other covenant, agreement, term, or
condition.
23. Confidential Nature. This Agreement is confidential in nature and,
accordingly, neither Prudential nor the Company or their officers, directors,
employees and agents shall disclose its terms or conditions to any other
parties unless required to do so pursuant to an order of a court or
administrative body having proper jurisdiction over the parties and this
Agreement. The parties may, however, agree on a mutually agreeable press
release to discuss the new relationship.
EZConnect, Inc.
By: /s/ Frank Gillen, CFO
Prudential California Realty
By: /s/ Ed Krafchow, President