EXHIBIT 10.20
THIS AGREEMENT made as of the 30th day of March, 2006,
BETWEEN:
FREE DA CONNECTION SERVICES INC., a corporation organized and
existing under the laws of Delaware
(hereinafter referred to as "FREE DA USA")
OF THE FIRST PART
AND:
FREE DA CONNECTION SERVICES INC., a corporation organized and
existing under the laws of British Columbia
(hereinafter referred to as "FREE DA")
OF THE SECOND PART
AND:
668158 B.C. LTD., of Surrey BC,
(hereinafter referred to as the "Vendor")
OF THE THIRD PART
AND:
XXXX XXXXXXXXXX, of Surrey BC
(hereinafter referred to as "Taschereau")
OF THE FOURTH PART
AND:
VIA VIS TECHNOLOGIES INC., a corporation organized and existing
under the laws of Canada,
(hereinafter referred to as "VV")
OF THE FIFTH PART
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WHEREAS:
A. The parties entered into a series of agreements in December, 2004
(hereinafter referred to as the "Agreements");
B. The parties entered into an Amendment Agreement dated December 30, 2005
(the "Amendment Agreement");
C. FREE DA USA, FREE DA, the Vendor, Taschereau and VV wish to amend the
Agreements to reflect the changes as indicated below, and to replace the
Amendment Agreement; and
D. The "Company" shall refer to FREE DA and FREE DA USA as appropriate.
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged by each of the
parties hereto), the parties make the binding agreements, amendments and
acknowledgements hereinafter set forth, the parties agree to replace the terms
of the Amendment Agreement with the following terms:
1. WITH RESPECT TO THE IP PURCHASE AND SALE AGREEMENT BETWEEN THE VENDOR AND
FREE DA CONNECTIONS SERVICES INC. PERCENTAGE OF GROSS REVENUE FEES
Pursuant to Section 4.1(a) of the IP Purchase and Sale Agreement, the Company
will pay Vendor 2% of the Gross Sales generated by the Company. The parties
have agreed amend Section 4.1(a) of the IP Purchase and Sale Agreement so that
the Company will generate the Gross Revenue Target and pay Vendor the Percentage
of Gross Revenue Fees as listed below for each calendar year from 2006 to 2010:
Year Gross Revenue Target Minimum Percentage of Gross Revenue Fees
2006 $1,250,000 $25,000
2007 $1,250,000 $25,000
2008 $5,000,000 $100,000
2009 $5,000,000 $100,000
2010 $12,500,000 $250,000
The Percentage of Gross Revenue Fees payable to the Vendor will be 2% of Gross
Revenue each year to a maximum of $500,000. If a Minimum Percentage of gross
Revenue Fees is not met in a particular calendar year, the Company, at its sole
discretion, may pay Vendor, no later then January 31 of the following calendar
year, an amount equal to the Minimum Percentage of Gross Revenue Fees payable to
Vendor for the
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calendar year, less the Percentage of Gross Revenue Fees already paid to the
Vendor for such calendar year. If the Company fails to pay the Minimum Gross
Revenue Fees to Vendor in a calendar year the Intellectual Property will be
transferred to the Vendor in accordance with the terms and conditions of the IP
Purchase and Sale Agreement.
FIELD
The parties agree that the definition of "Field" in Section 1.1(f) of the IP
Purchase and Sale Agreement will be amended to delete the term "PDA" and to add
the phrase "but excludes the technology known as Push to Get".
DIVISIONAL PATENT FILING
The parties agree that the Company will within 10 days of a request to file a
Divisional pursuant to Section 6.2 of the IP Purchase and Sale Agreement, act on
said request.
SALE OF ASSETS
The parties agree to amend Section 18.1 of the IP Purchase and Sale Agreement so
that Consent of Vendor is required before the sale of the all or substantially
all of the assets of the Company for any amount below $30,000,000.
IMPROVEMENTS
The parties agree that no Improvements pursuant to Section 1.1(g) of the IP
Purchase and Sale Agreement have been developed, invented or discovered at the
date of this Agreement.
2. TASCHEREAU EMPLOYMENT AGREEMENT WITH FREE DA CONNECTION SERVICES INC.
The parties have agreed to amend Section 3.11(b) of the Employment Agreement so
that the Employer will pay 2.0% of the gross revenue up to cumulative gross
revenue of $500,000,000 to Employee. Subsequent to the cumulative US$500
million of gross revenue, Employer will pay Employee 1.0% of the gross revenue
earned by the Company for the remaining 10 years after the date of the
Employment Agreement. The allowance pursuant to Section 3.11 of the Employment
Agreement shall terminate on June 30, 2015. Such allowance during the 10-year
period may not be cancelled by the Employer for any reason except in the event
that all or substantially all of the assets of the Employer are sold. Should
such an event take place, the Employer will pay Employee the difference between
the total allowances paid to Employee and Percentage of Gross Revenue Fees paid
to the Vendor under the provisions of the IP Purchase and Sale Agreement to that
date and the sum of 25% of the asset sale price; or $9,800,000, whichever is
less.
The parties further agree, that the Section 5.1 of the Employment Agreement
shall be amended such that the Employee's non-compete period is amended to 15
days.
3. PROMISSORY NOTE IN FAVOUR OF VV
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All parties have agreed to amend the promissory note held by VV to make monthly
payments of US$10,000 beginning June 1, 2006 until the principal of $300,000 and
interest is paid in full. Both parties agree that this promissory note will be
secured by a general security agreement.
4. IN ADDITION TO THE ABOVE BINDING CHANGES, ALL PARTIES ALSO AGREE TO THE
FOLLOWING TERMS AND CONDITIONS:
(a) With respect to the agreements between the parties, all parties hereto
agree that they shall not deem the others to be in default of any of the
agreements they have entered into as of the signing date of this Agreement.
(b) This Agreement and the rights, obligations and relations of the parties
hereto shall be conclusively deemed to be made under, and for all purposes,
governed by and construed in accordance with the laws of the province of British
Columbia and the federal laws of Canada applicable therein, but without giving
effect to any conflict of law rules.
(c) The parties hereto shall with reasonable diligence do all such things
and provide all such reasonable assurances as may be required to modify the said
agreements and consummate the transactions contemplated hereby, and each party
hereto shall provide such further documents or instruments required by the other
party as may be reasonably necessary or desirable to effect the purpose of this
Agreement and carry out its provisions.
(d) This Agreement shall be deemed to amend the Share Purchase Agreement
dated December 30, 2004 (the "Share Purchase Agreement") in accordance with the
terms of the Share Purchase Agreement. In all other respects, except for
amendments necessarily consequential to those provided for herein, the Share
Purchase Agreement is in full force and effect, unamended. All capitalized
terms used herein, unless otherwise defined, shall have the meanings ascribed
thereto in the Share Purchase Agreement.
(e) This Agreement may be executed in any number of counterparts, whether by
original or facsimile signature, and all such counterparts shall for all
purposes constitute one agreement, binding on the parties hereto, provided each
party hereto has executed at least one counterpart, and each shall be deemed to
be an original, notwithstanding that all parties are not signatory to the same
counterpart.
5. NO CLAIM OF BREACH
As at the date of this Agreement, the parties confirm to one another that
although some payments are late, neither party is claiming any breach.
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IN WITNESS WHEREOF the parties hereto have hereunto duly executed this Agreement
as of the day and year first above written.
FREE DA CONNECTION SERVICES INC. 668158 B.C. LTD.
Per: Per:
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Authorized Signatory Authorized Signatory
VIA VIS TECHNOLOGIES INC.
Per:
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Authorized Signatory XXXX XXXXXXXXXX
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