NOTE: MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATEMENT. THE
This Marketing Agreement (this “ Agreement ”), dated as of April 7, 2006 (the “ Effective Date ”), is between EDENTIFY, INC., a Delaware corporation located at 74 W. Broad Street, Suite 350, Bethlehem, Pennsylvania 18018 (“ Edentify ”), and TRILEGIANT CORPORATION, a Delaware corporation located at 100 Connecticut Avenue, Norwalk, Connecticut 06850 (“ Trilegiant ”).
W I T N E S S E T H
WHEREAS , Edentify has developed the IDAssess™, IDScreen™ and IDAlert™ products, which are automated systems that detect, analyze and score inconsistencies in a consumer’s personal information profiles (each, a “ Product ” and, collectively, the “ Products ”); and
WHEREAS , Edentify desires Trilegiant to, and Trilegiant desires to, market the Products to members (collectively, the “ Members ”) of its membership programs (including, but not limited to, PrivacyGuard, PC Safety, ID Secure, Identity Sweep, Hotline and any program(s) established by Trilegiant on or subsequent to the Effective Date, collectively, the “ Programs ”), subject to the terms and conditions of this Agreement.
NOW , THEREFORE , in consideration of the premises and of the mutual covenants and conditions contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Edentify and Trilegiant hereby agree as follows:
1. Non-Solicitation; Non-Competition; Acquisition Notification .
(a) At any time during the Term (as defined herein), Edentify shall not, either by itself or in conjunction with any third party, use direct mail, outbound telemarketing, inbound telemarketing, internet marketing or marketing via email to knowingly solicit or knowingly permit the solicitation of a Member for any Product until the earliest of the following: (i) such Member’s membership in the related Program expires, (ii) such Member’s membership in the related Program is cancelled by Trilegiant or pursuant to Trilegiant’s written instruction, or (iii) for one hundred and eighty (180) days after such Member’s membership in the related Program is cancelled by such Member.
(b) At any time during the Term, Edentify shall not, either by itself or in conjunction with any third party, without Trilegiant’s prior written consent, market, sell or otherwise agree to provide any Product, or license any Edentify Intellectual Property (as defined herein), to or through (i) any of Trilegiant’s clients listed on Schedule 1(b)-1 attached hereto (each, a “ Trilegiant Restricted Client ” and, collectively, the “ Trilegiant Restricted Clients ”) in respect of consumer marketing, or (ii) any of Trilegiant’s competitors listed on Schedule 1(b)-2 attached hereto (collectively, the “ Trilegiant Competitors ”). Trilegiant shall have the right, during the Term, to add three (3) additional entities (“ Trilegiant Additional Entities ”) to each list of entities set forth on each of Schedule 1(b)-1 and Schedule 1(b)-2 by providing thirty (30) days’ advance written notice to Edentify in respect thereof. Notwithstanding anything herein to the contrary, subject to the following sentence, Trilegiant shall not be permitted to add any entity as a Trilegiant Additional Entity if Edentify has an existing business relationship with such entity as of the date that Trilegiant seeks to add such entity. Edentify shall notify Trilegiant, in writing, within five (5) business days of receiving notice from Trilegiant of the proposed Trilegiant Additional Entities in the event that such a business relationship exists, and such written notice shall attach documentation, reasonably satisfactory to Trilegiant, supporting the existence of such business relationship.
(c) At any time during the Term, Trilegiant shall not, either by itself or in conjunction with any third party, without Edentify’s prior written consent, market, sell or otherwise agree to provide any Product (other than any MyPublicInfo, Inc. (“ MPI ”) product containing a Product or Products or data in respect of a Product or Products), or license any Edentify Intellectual Property (as defined herein), to or through (i) any of Edentify’s clients listed on Schedule 1(c)-1 attached hereto (each, an “ Edentify Restricted Client ” and, collectively, the “ Edentify Restricted Clients ”) in respect of consumer marketing, or (ii) any of Edentify’s competitors listed on Schedule 1(c)-2 attached hereto (collectively, the “ Edentify Competitors ”). Edentify shall have the right, during the Term, to add three (3) additional entities (“ Edentify Additional Entities ”) to each list of entities set forth on each of Schedule 1(c)-1 or Schedule 1(c)-2 by providing thirty (30) days advance written notice to Trilegiant in respect thereof. Notwithstanding anything herein to the contrary, subject to the following sentence, Edentify shall not be permitted to add any entity as an Edentify Additional Entity if Trilegiant has an existing business relationship with such entity as of the date that Edentify seeks to add such entity. Trilegiant shall notify Edentify, in writing, within five (5) business days of receiving notice from Edentify of the proposed Edentify Additional Entities in the event that such a business relationship exists, and such written notice shall attach documentation, reasonably satisfactory to Edentify, supporting the existence of such business relationship.
Notwithstanding anything contained in this paragraph 1(d), Edentify shall not be obligated to take any actions that would cause Edentify to be in violation of Nevada Corporate Code, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the regulations thereunder or other applicable federal or state securities laws or regulations.
2. Marketing; Branding .
(a) Trilegiant shall, in its sole discretion, market the Products to Members. Trilegiant’s agreement to market the Products is non-exclusive, and, therefore, (i) subject to Sections 1(a) and 1(b) hereof, Edentify may engage third parties to market the Products and (ii) Trilegiant may offer other products and/or services, whether or not the same or substantially similar to a Product, at any time during or after the Term. The application of a link on Program websites to websites owned or managed by MyPublicInfo, Inc. (“ MPI ”), and the use of a Product as a benefit in respect of a Program or as a stand-alone product for a newly-established Program shall be determined by Trilegiant in its sole discretion. Trilegiant shall consult with, and obtain the written consent of, Edentify in the event that Trilegiant desires to apply a link on Program websites to www.edentify.us (the “ Edentify Website”) . If requested, Edentify shall consult with Trilegiant in the development of a plan for marketing the Products to Members, whether such assistance is directly with Trilegiant or any of its clients or partners.
(b) Trilegiant shall have the right, in its sole discretion, to establish and create, during the Term, multiple unique branding or co-branding of the Products (such unique brand and co-branded names, collectively, the “ Trilegiant Brand Names ”). If requested, Edentify shall consult with Trilegiant in connection therewith. Trilegiant shall have the right, in its sole discretion, to market the Products to Members under the Trilegiant Brand Names. To the extent Trilegiant is working directly with Edentify in respect of the Products, the parties hereto shall mutually agree upon the development, use and implementation of the Trilegiant Brand Names.
3. Provision of Services; Service Level Standards; Source Code .
(a) Edentify shall provide to (A) all Members that purchase the Products as contemplated pursuant to this Agreement, (B) all Members that are entitled to use of the Products as Members of a Program offering the Products as a benefit of such Program and (C) all Members of a newly-established Program offering the Products as a stand-alone benefit the following:
(i) the Products as described on the Edentify Website;
(ii) Scoring services substantially meeting the functional and technical specifications of Edentify solutions as set forth on the attached Schedule 3(b); and
(iii) all intellectual property licenses set forth and described herein (including, without limitation, Section 11).
(c) Edentify shall notify Trilegiant, in writing, ninety (90) days prior to the effective date of any material modification of the functional specifications of any Product. Except as may be required by law, Edentify shall not materially diminish the benefits of any Product without the prior written approval of Trilegiant. To the extent any obligation of Edentify under this Section 3(b) is qualified by the contrary requirements of applicable law or regulation, Edentify shall use its best efforts to minimize the amount and/or effect of any such restrictions (to the extent permitted by applicable law or regulation) and shall reasonably cooperate with Trilegiant in connection therewith.
(d) Each Product shall comply with the standards and requirements set forth in this Agreement. Edentify shall provide the Products through qualified personnel and shall appoint a designated project manager as a primary point of contact for Trilegiant. Edentify shall provide the Products with due diligence and in a professional and workmanlike manner. Except as otherwise specifically stated in this Agreement, each Product shall be provided to Members with the same warranty as is provided to other Edentify customers of such Product. Edentify shall use its best efforts continuously throughout the Term to ensure that each Product is substantially and in the aggregate no less valuable to Members than such Product is to other Edentify consumers on the Effective Date.
(e) In performing its obligations hereunder, Edentify shall comply with the service level standards set forth below and elsewhere herein (collectively, the “ Service Level Standards ”). Edentify shall ensure sufficient capacity and system redundancy to ensure ninety-nine point five percent (99.5%) uptime of the Edentify Website as measured on a monthly basis; provided , however , that the uptime measurement shall not include downtime attributable to scheduled maintenance of which Edentify has provided Trilegiant with at least seven (7) days advance written notice (“ Uptime Requirement ”). Scheduled maintenance outages will be limited to two 2-hour outages per month and will be scheduled between 2:00 a.m. — 6:00 a.m. EST. Edentify shall use its best efforts to ensure that downtime for scheduled maintenance will minimize disruption of service. In the event that the Edentify Website is not functional, Edentify will promptly notify MPI. The material failure by Edentify to meet the Uptime Requirement in two consecutive calendar months shall be deemed a material breach of this Agreement. In addition, Edentify shall (1) use best efforts to ensure compliance with a mutually agreed-upon file format, and to the extent Edentify does not so comply, Edentify shall have twenty-four (24) hours to cure such non-compliance in all respects, and (2) use best efforts to achieve a goal of a maximum of two (2) hours for disaster recovery (i.e., resumption of basic business functionality).
(f) No later than fifteen (15) business days following the Effective Date and, to the extent any material changes have been made thereto, on each anniversary of the Effective Date during the Term, Edentify shall deliver to an independent third-party escrow agent, to be mutually agreed upon by the parties hereto (the “ Escrow Agent ”), a copy of the source code form of each Product’s software (including any comments or documentation available with respect thereto), a listing thereof, batch processes and database schemas (collectively, the “ Delivered Material ”). The Delivered Material shall be provided in a sealed package which shall only be delivered to Trilegiant pursuant to the terms of the Escrow Agreement among Edentify, as depositor, Trilegiant, and beneficiary, and the Escrow Agent (the “ Escrow Agreement ”). If the Release Condition (as defined in Section 3(g) below) occurs, Edentify shall use its best efforts to instruct Trilegiant in the operation of the Products and the Delivered Material. Such efforts shall include, but not be limited to, (i) identifying to Trilegiant any third party service providers who provide services with respect to operation and functioning of the Products, (ii) upon the request of Trilegiant and to the extent not prohibited by Edentify’s contractual confidentiality obligations, providing a copy of any agreements with such third party service providers and any related documentation to Trilegiant, and (iii) upon the request of Trilegiant, making best efforts to organize meetings between a Trilegiant representative and a Edentify representative and/or third party service provider representative with respect to the operation and functioning of the Products. Furthermore, in the event that the Release Condition occurs, Edentify shall use its best efforts in assisting Trilegiant in obtaining similar support for the Products and the Delivered Material from such third party provider as Edentify is receiving prior to such Release Condition.
(g) Edentify hereby grants to Trilegiant a perpetual, limited, non-transferable, non-exclusive, royalty-free license to use the Delivered Material for the purpose of providing the Products to Members if Edentify ceases doing business and its business is not continued by another entity (the “ Release Condition ”). Pursuant to the Escrow Agreement, upon the occurrence of a Release Condition, Trilegiant shall send the Escrow Agent a release request (the “ Release Request ”). Upon receipt of the Release Request, the Escrow Agent shall, within five (5) business days, deliver a written notice of such request to Edentify (the “ Notice of Release Request ”). Pursuant to the Escrow Agreement, Edentify shall have ten (10) business days to deliver contrary instructions to the Escrow Agent (“ Contrary Instructions ”). Upon receipt of Contrary Instructions, if any, the Escrow Agent will be required to send a copy of the Contrary Instructions to Trilegiant and store the Delivered Material without release pending either (i) joint instructions from Edentify and Trilegiant that accept release of the Delivered Material or (ii) receipt of an order from a court of competent jurisdiction.
(h) All rights and licenses granted under or pursuant to this Agreement by Edentify to Trilegiant are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the “ Code ”), licenses to rights to “intellectual property” as defined under the Code. The parties hereto agree that Trilegiant, as a limited licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Code. The parties hereto further agree that, in the event of the commencement of bankruptcy proceedings by or against Edentify under the Code, Trilegiant shall be entitled to retain all of its rights under this Agreement.
4. Customer Service Obligations . Members entitled to use the Products as a Member of a Trilegiant Edentify Program (as defined below) shall be directed to Trilegiant’s customer service department regarding all questions or problems relating to the Products. Edentify agrees to provide training as of the Effective Date and on an ongoing basis throughout the Term to Trilegiant’s customer service department staff on Edentify and the Products needed by such staff to provide adequate customer service to Members. The dates, location and amount of training shall be jointly determined. Edentify reserves the right, however, to charge for such training in the event that such costs become greater than incidental to Edentify. In such event, Edentify will provide Trilegiant with forty-five (45) days advance written notice thereof. As used herein, a “ Trilegiant Edentify Program ” shall mean (i) any Program containing a Product as one of many, or as the sole, benefit offered to Members of such Program, (ii) any Program, the website of which provides a link to the Edentify Website or otherwise contains other marketing materials relating to Edentify.
5. Confidentiality .
(b) Confidential Information . Each party agrees that the marketing materials, information and techniques provided by the other party (the “ Disclosing Party ”) with respect to marketing of the Products hereunder, and all other proprietary non-public information provided by the Disclosing Party to the other party (the “ Receiving Party ”) hereunder, whether oral or written, and whether or not labeled as confidential by such party (“ Confidential Information ”), is confidential and proprietary to the Disclosing Party and is received in confidence by the Receiving Party, and the Receiving Party will not, directly or indirectly, use, disclose, reproduce, dispose of, sell or otherwise transfer such information in any manner except as required to perform such party’s obligations hereunder or as otherwise expressly provided herein. Notwithstanding the foregoing, Confidential Information does not include information which: (i) is in the public domain at the time of the Disclosing Party’s communication to the Receiving Party; (ii) entered the public domain through no fault of the Receiving Party subsequent to the time of the Disclosing Party’s communication thereof to the Receiving Party; (iii) was in the Receiving Party’s possession, free of any obligation of confidence, at the time of the Disclosing Party’s communication thereof to the Receiving Party; (iv) was rightfully communicated to the Receiving Party free of any obligation of confidence subsequent to the time of the Disclosing Party’s communication thereof to the Receiving Party; or (v) was developed by employees or agents of the Receiving Party, independently of and without reference to the Confidential Information.
(c) Confidentiality Obligation . Each Disclosing Party’s Confidential Information shall at all times remain the sole and exclusive property of such Disclosing Party, and each Receiving Party shall indefinitely: (i) exercise the same degree of care and protection (but no less than a reasonable degree of care and protection) with respect to the Confidential Information of the other as such Receiving Party exercises with respect to its own information of a like nature; (ii) not directly or indirectly disclose, copy, transfer or allow access to any of the Confidential Information; and (iii) not utilize any of the Confidential Information for any purpose other than as authorized in this Agreement. Notwithstanding the foregoing, a Receiving Party may, in turn, disclose the Confidential Information of a Disclosing Party to those of its employees or third-parties performing services for the Receiving Party directly related to the purposes of this Agreement that have both a need to know, and a legal duty to the Receiving Party to protect, said Confidential Information, and to its professional advisors. Because of the unique nature of the Confidential Information, each party acknowledges that the other may suffer irreparable harm in the event of a breach by it of any obligation provided in this Section 5 and that any remedy at law for any breach of any obligation provided in this Section 5 may be inadequate. In the event of such a breach, the non-breaching party will, in addition to any other remedies at law, be entitled to seek injunctive or other equitable relief, without the necessity of posting bond. The exercise of any of the foregoing rights and remedies are cumulative and not exclusive of any other rights or remedies.
(d) Limited Exceptions . Nothi