AGREEMENT
This Agreement is made as of this 4th day of October, 2002, by and between
UMDN, Inc., a Delaware corporation ("Provider"), and Leisure Services
Corporation, a Nevada corporation ("Leisure").
Leisure is a wholly-owned subsidiary of Leisure Industries Corporation, a
Nevada corporation ("Leisure Industries"), which owns and operates a time share
business including nine properties and land with approximately 75,000 owners as
of the date hereof.
Provider owns and operates a proprietary discount network business that
provides discounts from various national and local businesses to members of
affiliated groups. Provider has created such a network serving members of unions
and other affiliated groups in the Los Angeles metropolitan area.
Leisure desires that Provider create and manage a private branded discount
network to be utilized by timeshare and land owners of Leisure Industries in the
Las Vegas and Los Angeles metropolitan areas; and Provider is willing to do so
on the terms contained herein.
In consideration of the premises and of the mutual covenants and agreements
herein contained, the parties hereto do hereby agree as follows:
1. SERVICES.
1.1 Provider shall create a discount network of local business providers in
the Las Vegas metropolitan area and shall make available its existing network of
local and national business providers in the Los Angeles metropolitan area, in
each case for the benefit of the timeshare owners, land owners, employees,
lessees and tour participants of Leisure, its sister companies, parent company
and subsidiaries ("Leisure Members"). Leisure hereby acknowledges that Provider
is entitled to receive and retain all fees and commissions payable to Provider
from all local and national business providers that comprise its discount
networks, including any discount networks created specifically for the benefit
of the Leisure Members.
1.2 Provider shall create and manage a marketing program addressed
exclusively to the Leisure Members, that may be called "Club Leisure," and shall
advise the Leisure Members of the existence of Club Leisure, or other name that
may be mutually agreed upon, and the benefits to be derived therefrom. Such
marketing program shall include the creation of a website linked to the existing
Leisure website, the integration of the database of Leisure Members with the
database of Provider, the interfacing of such website and database with those of
both Provider and Leisure, improvements in existing tracking software, the
creation of marketing materials and the periodic updating of all marketing
materials consistent with the updating of the marketing materials used by
Provider with respect to its own proprietary subscribers. Provider shall use its
best efforts to make the Club Leisure marketing program distinctive and
consistent with the demographics of the Leisure Members.
1.3 To the extent possible or required under applicable law, including,
without limitation, the U.S. Copyright Act, the Club Leisure homepage and all
marketing materials specific to Club Leisure and the content and use thereof
(collectively "Leisure Materials") created hereunder shall be considered Works
Made For Hire or, if not legally capable of being considered as such, then and
in such event Provider hereby assigns to Leisure in perpetuity all right, title
and interest, including copyright, Provider may have in or to the Leisure
Materials throughout the universe free and clear of any and all claims for
royalties or other compensation other than that specified herein.
Notwithstanding the foregoing, in no event shall the Leisure Materials be deemed
to include any programs, protocols, software, hardware or firmware utilized by
Provider in its operations or in the creation or management of Club Leisure or
any improvements, modifications or enhancements thereof, whether or not such
improvements, modifications or enhancements are designed specifically or solely
for the purposes of creating or managing Club Leisure; Provider shall retain all
rights in such programs, protocols, software, hardware and firmware and in all
such improvements, modifications and enhancements.
1.4 Leisure shall cooperate with Provider and provide to Provider such
access to its data and personnel as Provider may reasonably request from time to
time to enable Provider to perform the services required hereunder.
1.5 Provider shall use its best efforts to complete a discount network for
the Las Vegas metropolitan area, including at least 100 business providers in
such area, and to complete the services contemplated by Section 1.2 hereof in a
manner sufficient for Leisure to launch Club Leisure to the Leisure Members
within 120 days following the date of this Agreement.
2. CONSIDERATION.
In consideration of the services provided by Provider to Leisure hereunder,
Leisure shall pay to Provider as follows:
2.1 From and including the date hereof through April 15, 2003, Leisure
shall pay to Provider, on the fifteenth day of each calendar month, the amount
set forth opposite such date on Schedule A annexed hereto and made a part
hereof.
2.2 From and including April 16, 2003, through the end of the term of this
Agreement, Leisure shall pay to Provider, on the fifteenth day of each calendar
month, an amount determined in accordance with Schedule B annexed hereto and
made a part hereof.
2.3 If any such payment is not made when due in accordance with Schedule A
or B, as the case may be, Leisure shall pay to Provider interest on the amount
not so paid when due at an annual rate of ten percent.
3. TERM. The term of this Agreement shall commence as of the date hereof and
shall terminate on the first to occur of the following: (i) October 15, 2005;
(ii) notwithstanding the provisions of Section 2.3 hereof, fifteen calendar days
following notice from Provider to Leisure that Leisure has not made a payment
when due hereunder if Leisure does not make such payment within five calendar
days following the date of such notice; and (iii) thirty calendar days following
notice from either party to the other of a breach of any term or provision of
this Agreement by the other (other than a failure of Leisure to make any payment
due hereunder) and the failure of the other to cure such breach within such
thirty day period. Upon termination of this Agreement for any reason whatsover,
Provider shall cease using all marketing materials that are specific to Club
Leisure and shall remove all links and other interfaces between the Club Leisure
website and its own facilities; and Leisure shall have the option to pay to
Provider an amount equal to the cost to Provider of all of the marketing
materials that are specific to Club Leisure. Upon receipt of such payment,
Provider shall deliver such marketing materials to Leisure.
4. INDEMNITY. Leisure acknowledges and agrees that the Leisure Members
utilizing Club Leisure will do so as Leisure Members and not as subscribers to
Provider's own services and that Provider shall have no responsibility or
liability with respect thereto. In no event shall Provider be deemed to have
sponsored, vouched for, endorsed or otherwise recommended any of the providers
included in the discount networks available to Leisure Members through Club
Leisure. Each party (an "indemnitor") shall indemnify, defend and hold harmless
the other party (an "indemnitee") from and against any and all demands, claims,
actions or causes of action, judgments, assessments, losses, damages, penalties,
costs (including reasonable attorneys' fees and related expenses) and all other
liability asserted against, imposed upon or incurred by the indemnitee by or as
the result of the actions, inactions or negligence of the indemnitor, or any
claim with respect thereto, in the performance of any of its responsibilities to
any Leisure Member. The indemnitee shall, within ten (10) days following receipt
of such claim, notify the indemnitor; the indemnitor shall defend such claim by
appropriate proceedings and shall pay all costs and expenses of such proceedings
and the amount of any judgment imposed on the indemnitee. The indemnitor shall
employ any counsel selected by it and reasonably acceptable to the indemnitee to
defend the claim or to compromise, settle or otherwise dispose of the same. In
no event shall either party be entitled to indemnity hereunder to the extent its
claim arises out of or occurs as the result of its negligent act or omission.
5. REPRESENTATIONS. Each party to this Agreement hereby represents and
warrants to each other party that the execution, delivery and performance of
this Agreement have been duly authorized by such party and do not violate the
organizational documents of such party or any other agreement to which such
party is a party or by which it is bound. This Agreement constitutes a legal,
valid and binding obligation of such party, enforceable against it in accordance
with its terms.
6. CONFIDENTIAL MATERIAL.
6.1 Each party hereto acknowledges that the performance of its obligations
hereunder may bring it and its employees into close contact with Confidential
Material of the other.
6.2 For the purposes of this Agreement, Confidential Material includes
information concerning the business of each party as currently conducted and
plans for the future conduct thereof, including, without limitation, customer
lists and files, marketing approaches and plans, methods of doing business,
potential acquisition candidates, proposed terms of potential acquisitions, cost
and pricing data, material contained solely in the personnel files of employees,
credit card information, other personal identifying information and all other
similar information. In the case of Leisure, its Confidential Material includes,
in particular and without limiting the foregoing, the identities of the Leisure
Members and all other information concerning the Leisure Members; and, in the
case of Provider, its Confidential Material includes, in particular and without
limitation, its methods of doing business and the terms of its business
arrangements with the business and service providers that become part of its
discount networks.
6.3 Each party acknowledges that the other has already expended, and
expects to expend, substantial sums and has devoted and expects to devote
substantial other resources to create the proprietary Confidential Material on
which its business depends and to create other Confidential Material to be
exploited by it and the business relationships and information related thereto
and has substantial proprietary interests and valuable trade secrets in the
Confidential Material. Each party further acknowledges the competitive value and
confidential nature of the Confidential Material and the damage that could
result to the other if information contained therein is disclosed to any third
party. Each party shall, and shall use its best efforts to cause its employees
to, at all times treat the Confidential Material of the other as its valuable
proprietary information and notify the other in writing if it or they learn of
the unauthorized use or disclosure of such Confidential Material. Each party
shall, and shall use its best efforts to cause its employees to, safeguard the
Confidential Material of the other with all due care. Each party hereby agrees
that the Confidential Material of the other will be used solely for the benefit
of the other and that it and its employees shall keep such information
confidential and not use it for any other purpose, publish it or disclose it to
any other party and shall deliver promptly to the other on termination of this
Agreement, or at any other time the other may so request, all memoranda, notes,
records, reports, manuals, drawings, blueprints and other documents and all
copies thereof in all media in which resident relating to the Confidential
Material or otherwise to the business of the other, and all property associated
therewith, which it or its employees may then possess or have under its or their
control. Notwithstanding the foregoing, the Confidential Material does not
include any material which (a) is or becomes publicly known through no fault of
a party or (b) is disclosed to a party under no obligation of confidentiality by
a third party or parties having the right to do so or (c) is developed
independently by either party without the use of Confidential Material.
7. NON-SOLICITATION; NON-DISPARAGEMENT. Each party further agrees that, during
the term of this Agreement and for a period six (6) months thereafter, it shall
not solicit or encourage to leave the employ of the other any person employed by
the other on the date hereof or during the term of this Agreement, either as an
employee or as an independent contractor, or hire any such person who has left
the employ of the other within one month following the termination of such
person's employment with the other. In addition, each party hereto hereby agrees
not thereafter to disparage or otherwise to seek to impair or impugn the
professional or personal character, integrity or reputation of the other or the
members, shareholders, officers or directors of the other.
8. ENFORCEMENT. Each party acknowledges that the provisions of Sections 6 and
7 hereof are essential to the goodwill and potential profitability of the other
and have provided a substantial inducement for the other to execute, and perform
its obligations under, this Agreement and that the application thereof will not
involve a substantial hardship upon such party's future business or livelihood.
Each party agrees that a violation of the covenants set forth in Sections 6 and
7 hereof, or any provision thereof, may cause irreparable injury to the other
and the other shall be entitled, in addition to any other rights and remedies it
may have, at law or in equity, to seek an injunction enjoining and restraining
such party and its employees from doing or continuing to do any such act and any
other violations or threatened violations of such covenants or provisions.
If any provision of Sections 6 or 7 hereof as applied to any circumstance
shall be adjudged by a court to be invalid or unenforceable, the same shall in
no way affect any other provision of Sections 6 or 7, the application of such
provision in any other circumstances or the validity or enforceability of
Sections 6 or 7 in any other jurisdiction. If any provisions of Sections 6 or 7
as applied to any circumstances shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision in any other
circumstances or the validity or enforceability of Sections 6 or 7 to be
enforced as written. If any provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, each party agrees that the court making such determination shall have
the power to reduce the duration or area, or both, of such provision or to
delete or blue-pencil specific words or phrases; and, in its reduced or
blue-pencilled form, such provision shall then be enforceable and shall be
enforced.
Each party intends to, and does hereby, confer jurisdiction to enforce the
covenants contained herein upon the courts of any state of the United States or
any other governmental jurisdiction within the geographical scope of such
covenants. If the courts of any one or more of such states or jurisdictions
shall hold such covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the parties hereto that such
determination shall not bar or in any way affect either party's right to the
relief provided above in the courts of any state or jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective states or jurisdictions, the above covenants as they relate to
each state or jurisdiction being, for this purpose, severable into diverse and
independent covenants.
9. Limitation on Liability of Provider. PROVIDER MAKES NO WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
SERVICES TO BE PERFORMED BY IT HEREUNDER. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS OR REVENUES TO
THE FULL EXTENT SUCH MAY BE DISCLAIMED BY LAW, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, LOST PROFITS OR LOST REVENUES.
10. NOTICES. All notices, requests and demands to or upon the respective
parties hereto shall be deemed to have been given or made when deposited in the
mail, first-class mail, registered and postage prepaid, or, in the case of
facsimile or electronic mail transmission, when sent addressed as set forth
below or to such other address as may be hereafter designated in writing by
either party to the other:
If to Provider, to:
217 Ashland Avenue
Santa Monica, California 90405
telecopier: 310-396-1485
email: kent@umdn.com
If to Leisure,to:
Leisure Services Corporation
4310 Paradise Road
Las Vegas, Nevada 89109
Telecopier: 702-369-8980
Email: dsteenman@leisureservices.com
11. NO WAIVER; Cumulative Remedies; Amendments. No failure to exercise and no
delay in exercising, on the part of either Leisure or Provider, any right, power
or privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law. No modification, or waiver
of any provision of this Agreement nor consent to any departure from the
provisions hereof, shall be effective unless the same shall be in writing from
the party so modifying, waiving or consenting and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it is given. No notice to either party shall entitle such party to any other or
further notice in other or similar circumstances unless expressly provided for
herein. No course of dealing between the parties shall operate as a waiver of
any of their respective rights under this Agreement.
12. CAPTIONS. The captions of the various sections of this Agreement have been
inserted only for the purposes of convenience and shall not be deemed in any
manner to modify, define, enlarge or restrict any of the provisions of this
Agreement.
13. SURVIVAL OF AGREEMENTS. All agreements, representations and warranties made
herein and in any reports or other documents delivered pursuant hereto shall
survive the execution and delivery of this Agreement and shall continue in full
force and effect.
14. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. This Agreement may not, however, be assigned
by either party without the prior written consent of the other.
15. PRONOUNS, PLURALS, NOMINEES. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the person, firm or corporation may require. Plurals of defined
terms shall include the singular.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Leisure and Provider with respect to the subject matter hereof; supersedes all
prior written agreements and negotiations and oral understandings, if any, and
may not be amended, supplemented or discharged except by performance or by an
instrument in writing signed by both of them.
17. COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but which, together,
shall constitute but one Agreement.
18. GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with and governed by the internal laws of the State of California applicable to
agreements made and to be performed entirely within the State of California
without giving effect to the conflicts of laws provisions thereof.
19. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
20. INTERPRETATION. Neither this Agreement nor any provision hereof shall be
construed or interpreted against any party on the basis that such party or such
party's attorney, drafted this Agreement or such provision.
21. Arbitration. EITHER PARTY HERETO MAY REQUIRE THE ARBITRATION OF ANY DISPUTE
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT. ANY SUCH ARBITRATION SHALL
BE CONDUCTED IN LOS ANGELES, CALIFORNIA. EITHER PARTY MAY INITIATE AND REQUIRE
ARBITRATION BY GIVING NOTICE TO THE OTHER PARTY SPECIFYING THE MATTER TO BE
ARBITRATED. IF LEGAL ACTION IS ALREADY PENDING ON ANY MATTER CONCERNING WHICH
THE NOTICE IS GIVEN, THE NOTICE SHALL NOT BE EFFECTIVE UNLESS GIVEN BY THE
DEFENDANT THEREIN AND GIVEN BEFORE THE EXPIRATION OF TWENTY (20) DAYS AFTER
SERVICE OF PROCESS ON THE PERSON GIVING THE NOTICE. EXCEPT AS PROVIDED TO THE
CONTRARY IN THESE PROVISIONS ON ARBITRATION, THE ARBITRATION SHALL BE IN
CONFORMITY WITH AND SUBJECT TO APPLICABLE RULES AND PROCEDURES OF THE AMERICAN
ARBITRATION ASSOCIATION (OR ANY SUCCESSOR THERETO). IF THE AMERICAN ARBITRATION
ASSOCIATION IS NOT THEN IN EXISTENCE AND THERE IS NO SUCCESSOR, OR IF FOR ANY
REASON THE AMERICAN ARBITRATION ASSOCIATION FAILS OR REFUSES TO ACT, THE
ARBITRATION SHALL BE IN CONFORMITY WITH AND SUBJECT TO THE PROVISIONS OF
APPLICABLE NEVADA STATUTES (IF ANY) RELATING TO ARBITRATION AT THE TIME OF THE
NOTICE. THE ARBITRATORS SHALL BE BOUND BY THIS AGREEMENT AND ALL RELATED
AGREEMENTS AND ANY REMEDY OF THE ARBITRATOR SHALL BE CONSISTENT THEREWITH.
PLEADINGS IN ANY ACTION PENDING ON THE SAME MATTER SHALL, IF ARBITRATION IS
REQUIRED AS AFORESAID, BE DEEMED AMENDED TO LIMIT THE ISSUES TO THOSE
CONTEMPLATED BY THE RULES PRESCRIBED ABOVE. EACH PARTY SHALL PAY THE COSTS OF
ARBITRATION, INCLUDING ARBITRATOR'S FEES, AS AWARDED BY THE ARBITRATOR(S). THERE
SHALL BE ONE ARBITRATOR SELECTED IN ACCORDANCE WITH THE RULES PRESCRIBED ABOVE,
EXCEPT THAT SUCH ARBITRATOR SHALL BE NEUTRAL AND FAMILIAR WITH THE PRINCIPAL
SUBJECT MATTER OF THE ISSUES TO BE ARBITRATED. THE TESTIMONY OF WITNESSES SHALL
BE GIVEN UNDER OATH, AND DEPOSITIONS AND OTHER DISCOVERY MAY BE ORDERED BY THE
ARBITRATOR(S). THE RULINGS OF THE ARBITRATORS SHALL BE FINAL AND BINDING ON THE
PARTIES.
NOTICE: BY EXECUTING THIS AGREEMENT EACH PARTY IS AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS ARISING UNDER THIS AGREEMENT DECIDED BY
NEUTRAL ARBITRATION AND IS GIVING UP ANY RIGHTS SUCH PARTY MIGHT POSSESS TO HAVE
THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY EXECUTING THIS AGREEMENT EACH
PARTY IS GIVING UP JUDICIAL RIGHTS TO APPEAL. IF EITHER PARTY REFUSES TO SUBMIT
TO ARBITRATION AFTER AGREEING TO THIS PROVISION SUCH PARTY MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE APPLICABLE STATE STATUTE. EACH PARTY'S
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
22. CONFIDENTIALITY. Leisure and Provider shall keep the terms and conditions
of this Agreement secret and confidential. Neither Leisure nor Provider shall
disclose any of such terms or conditions to any other person or entity without
the prior written consent of the other except pursuant judicial compulsion or to
the extent required by securities disclosure laws.
23. NO THIRD PARTY BENEFICIARIES. This Agreement is intended only for the
benefit of the parties hereto and their successors, assigns, estates, heirs,
legatees and devisees and not for the benefit of any other third party and shall
not be deemed to give any rights or remedies to any other third party whether
referred to herein or not.
24. PARTIES NOT PARTNERS. Provider is an independent contractor. Nothing
contained herein shall be deemed to constitute Provider a partner or employee
of, or joint venturer with, Leisure; and neither Provider nor Leisure shall take
any action from which others might infer that Provider is a partner or employee
of, or joint venturer with, Leisure.
IN WITNESS WHEREOF, Leisure and Provider have executed this Agreement as of
the date first set forth above.
UMDN, Inc.
By: /s/ Kent Keith
-----------------------------
Kent Keith, President
Date: October 04, 2002
-----------------------------
Leisure Services Corporation:
By: /s/ Diane Steenman
-----------------------------
Diane Steenman, President
Date: October 04, 2002
-----------------------------
LEISURE SERVICES - UMDN, INC. VENDOR CONTRACT
---------------------------------------------
Schedule A
Date Amount
October 15, 2002 $25,944
November 15, 2002 $42,883
December 15, 2002 $12,299
January 15, 2003 $53,103
February 15, 2003 $29,009
March 15, 2003 $16,785
-------
Total for Schedule A payments $180,023
Note: All payments under Schedule A are billed on the 15th day of each month,
payable by the first day of the following month.
LEISURE SERVICES - UMDN, INC. VENDOR CONTRACT
---------------------------------------------
Schedule B
Network Administration Fee Schedule beginning April 15, 2003:
The following fees are based on the total number of Club Leisure Members, per
Type*, who will have access to all established Discount Networks. For Type I
members, this includes access to future Networks as they are developed, and all
UMDN National Providers and Strategic Alliance products/services. Type II
members shall have access to limited Providers in a Network, as directed by
Leisure Services.
* Member Types are categorized as:
- Type I -VIP Members: Leisure Employees, Owners (Land & Vacation), and
Lessees
- Type II - Temporary Members: Tour Participants, including those booked on
Leisure Industries Vacation Specials.
Fee Matrix:
Type I Type II
- ------------------- ----------------- ----------------- ------------------ ----------------- ----------------
Number of VIP Cost per Member Total per 12 Number of Cost per Member Total per 12
Members per Year mo. period max. Temporary Members per Month mo. period
- ------------------- ----------------- ----------------- ------------------ ----------------- ----------------
Up to 50,000 $5.00 $250,000 max Up to 5,000 $1.50 $90,000 max
per/mo.
- ------------------- ----------------- ----------------- ------------------ ----------------- ----------------
Up to 100,000 $3.00 $300,000 max Up to10,000 $1.00 $120,000 max
per/mo.
- ------------------- ----------------- ----------------- ------------------ ----------------- ----------------
Up to 200,000 $2.00 $400,000 max Up to 20,000 $0.75 $180,000 max
per/mo.
- ------------------- ----------------- ----------------- ------------------ ----------------- ----------------
- Type I: Fees are calculated monthly and based on the total number of Club
Leisure "VIP" Members in our database, divided by 12.
- Type II: Fees are calculated monthly based on the total number of Club
Leisure "Temporary" Member Booklets tracked through PNA software,
printed and delivered.