Agreement
Between
PRECYSE CORPORATION
- and -
THE CYBERBINGO CORPORATION
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS 1
1.1 DEFINITIONS 1
"Confidential Information" 1
"Intellectual Property" 2
"Product Specification(s)" 2
"Related Materials" 2
"Software" 2
1.2 SCHEDULES 2
ARTICLE 2 - LICENSE GRANT 2
ARTICLE 3 - LICENSE FEES AND REPORTING 3
ARTICLE 4 - OBLIGATIONS OF THE LICENSOR 3
ARTICLE 5 - USERS OF THE SOFTWARE 3
ARTICLE 6 - SUPPORT AND MAINTENANCE 4
ARTICLE 7 - TERM 5
ARTICLE 8 - TERMINATION 5
ARTICLE 9 - ESCROW OF SOURCE CODE 5
ARTICLE 10 - WARRANTIES 6
ARTICLE 11 - INDEMNIFICATION 7
ARTICLE 12 - LIMITATION OF LIABILITY 8
ARTICLE 13 - GOVERNING LAW 8
ARTICLE 14 - CONFIDENTIALITY 8
ARTICLE 15 - ASSIGNABILITY 9
ARTICLE 16 - OWNERSHIP 9
ARTICLE 17 - GENERAL PROVISIONS 9
ARTICLE 18 - ARBITRATION 11
SCHEDULE "A" - DESCRIPTION OF SOFTWARE
SCHEDULE "B" - ESCROW AGREEMENT
TECHNOLOGY LICENSE AND MAINTENANCE AGREEMENT
THIS AGREEMENT made as of the 4th day of December, 1997.
B E T W E E N:
PRECYSE CORPORATION, a corporation incorporated pursuant to the laws of
Ontario
(hereinafter referred to as the "Licensor")
OF THE FIRST PART;
- and -
THE CYBERBINGO CORPORATION, a corporation incorporated pursuant to the laws
of Antigua
(hereinafter referred to as the "Licensee")
OF THE SECOND PART.
WHEREAS the Licensee wishes to operate an Internet-based "bingo" operation
on a Web server to be located in Antigua;
AND WHEREAS the Licensee wishes to license the Software and the Related
Materials (as hereinafter defined) and obtain related technical and advisory
services from the Licensor.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants contained in this Agreement, the parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 DEFINITIONS
The parties agree that, the following terms have the following meanings:
(a) "Confidential Information" means the information provided by one party
to the other and designated as confidential in writing. Confidential
Information does not include information which is: publicly available
or becomes so other than by acts of a party; in lawful possession of a
party prior to it being provided by the other party; or, received by a
party from a third party where the third party is not in breach of a
duty not to disclose such information, and includes the Software and
the Related Materials.
(b) "Intellectual Property" means the intellectual property, or other
rights licensed under this Agreement including, the copyrights
subsisting in the Software, the Confidential Information, and all of
the above as they are embodied in the Software and the Related
Materials.
(c) "Product Specification(s)" means the functional and technical
specifications for the Software previously provided by the Licensor to
the Licensee and includes such further functional and technical
specifications as may be agreed upon by the Licensor and the Licensee
from time to time.
(d) "Related Materials" means any and all human readable documentation
which is produced in relation to, and which is to be delivered with,
the Software, and such other documentation which may thereafter be
provided by the Licensor and includes such documentation that is
necessary for use of the Software by the Licensee.
(e) "Software" means the computer programs licensed to the Licensee
hereunder in machine-executable object code form only and as set out
in Schedule "A" to this Agreement, and each copy of, up-date of,
variation or enhancement to such computer programs.
1.2 SCHEDULES
The following are the schedules attached to and incorporated into this
Agreement by reference, and deemed to be a part hereof:
Schedule "A" - Description of Software and Description of
Support and Maintenance Services
Schedule "B" - Escrow Agreement
ARTICLE 2 - LICENSE GRANT
2.1 The Licensor hereby grants a world-wide non-exclusive license to the
Licensee to use the Software and the Related Materials associated therewith
for the term of this Agreement on a single server connected to the Internet
and located in Antigua or in another country with the consent of the
Licensor, not to be unreasonably withheld, subject to the terms and
conditions of this Agreement. The foregoing license granted may not be
revoked by the Licensor except at the termination of this Agreement.
2.2 The parties acknowledge that the license of the Software and the Related
Materials associated therewith is non-exclusive, and the Licensor may grant
further licenses for the use of the Software, the Related Materials, any
derivative works, or the Intellectual
Property in relation thereto, anywhere world-wide.
ARTICLE 3 - LICENSE FEES AND REPORTING
3.1 The Licensee agrees to pay the Licensor a licensing fee of United States
One Thousand Five Hundred Dollars (U.S.$1,500.00), payable on the execution
of this Agreement (the "Initial Fee").
3.2 In addition to the Initial Fee, the Licensee agrees to pay to the Licensor,
the sum equal to fifty percent (50%) of its gross cash sales, such amount
to be remitted to the Licensor within ninety (90) days of each fiscal
quarter (the "Royalty"). The Royalty shall be accompanied by a quarterly
statement income, showing the total gross sales during the period, prepared
in accordance with GAAP.
3.3 The parties agree that the Licensor shall be authorized to charge
additional fees, which shall be negotiated by the parties from time to time
when new Software and related materials are required by the Licensee (the
"Additional License Fee"). At no time shall the Additional License Fee be
more than FIFTY THOUSAND DOLLARS ($50,000.00) for any single modification
to the Software or Related Materials.
3.4 During the term hereof, the Licensor shall also provide to the Licensee,
such support and maintenance for the Software and Related Materials as may
be required by the Licensee, from time to time. The parties agree that the
Licensor shall be authorized to charge additional fees for support and
maintenance, which shall be negotiated by the parties from time to time,
either on an hourly or monthly basis, as same are required from time to
time by the Licensee (the "Support Fee").
3.5 During the term hereof, the Licensor shall also provide to the Licensee,
such marketing, promotion and related advice as may be required by the
Licensee, from time to time. The parties agree that the Licensor shall be
authorized to charge additional fees for its marketing, promotion and
related services, which shall be negotiated by the parties from time to
time when same is required by the Licensee.
ARTICLE 4 - OBLIGATIONS OF THE LICENSOR
4.1 During the term hereof, the Licensor shall provide to the Licensee, at no
extra cost, such reasonable number of further copies of the Software and
the Related Materials as may be requested by the Licensee, from time to
time.
4.2 The Licensor agrees to make enhancements to the Software that are requested
by the
Licensee. The parties agree that the Licensor shall be authorized to charge
an additional one-time fee, which shall be negotiated by the parties when
enhancements to the Software and the Related Materials are requested by the
Licensee (the "Enhancement Fee"). The Enhancement Fee shall be based on a
rate of United States Two Hundred Fifty Dollars (U.S.$250.00) per hour with
a minimum of United States Twenty-Five Thousand Dollars (U.S.$25,000.00)
per request (which may include more than one (1) enhancement).
ARTICLE 5 - USERS OF THE SOFTWARE
5.1 The Licensee shall be entitled to receive and have installed copies of the
then current versions of the Software and the Related Materials. The
Software may be accessed by any number of users on the Internet.
5.2 The License shall be entitled to make and use additional copies of the
Software and the Related Materials as necessary to support its intended use
of the Software. The Licensee covenants and agrees that all copies of the
Software and the Related Materials must contain such copyright and
proprietary notices as reasonably specified by the Licensor.
5.3 Upon termination of this Agreement, the Licensee shall return to the
Licensor or destroy all copies of the Software and the Related Materials in
the Licensee's possession, and the Licensee shall provide to the Licensor a
certificate of an officer of the Licensee confirming that the Software and
all Related Materials have been returned or destroyed as required.
5.4 The Licensee acknowledges and agrees that the Software may contain
technical protection features, including the use of date dependent license
codes, and/or hardware serialization, to restrict unauthorized copying or
use of the Software.
ARTICLE 6 - SUPPORT AND MAINTENANCE
6.1 The Licensor agrees to provide support and maintenance services, as further
described in Schedule "A", (the "Support and Maintenance Services"), for
the duration of this Agreement.
6.2 If during the term of this Agreement the Software or the Related Materials
fail to perform in accordance with the Product Specifications, or exhibit a
major error which cannot be reasonably circumvented (the foregoing shall be
collectively referred to as "Defects"), the Licensee shall advise the
Licensor of the Defects.
6.3 The Licensor shall, within five (5) days of the communication of the
existence of
Defects referred to in section 6.2 from any source whatsoever, and at no
extra cost to the Licensee, correct the Defects.
ARTICLE 7 - TERM
7.1 This Agreement shall have an initial term of five (5) years (commencing on
the date first written above), and thereafter, shall automatically renew
for additional one (1) year terms unless written notice to terminate is
given by one party to the other at least ninety (90) days prior to the end
of the then current term.
ARTICLE 8 - TERMINATION
8.1 Either the Licensor or Licensee may terminate this Agreement immediately
upon the giving of written notice, to the defaulting party, upon the
occurrence of any of the following events:
(a) the insolvency of the defaulting party;
(b) the defaulting party executes an assignment for the benefit of its
creditors;
(c) the defaulting party dissolves, is wound up, ceases to carry on
business, or makes a bulk sale of its assets; or
(d) the defaulting party becomes subject to receivership, bankruptcy or
similar proceedings.
8.2 Upon the occurrence of a material default not otherwise specifically dealt
with under this Article 8, by either party, and the failure of such
defaulting party to cure such default within thirty (30) days after
receiving written notice thereof from the non-defaulting party, this
Agreement may be terminated by the non-defaulting party by giving written
notice of termination to the defaulting party, such termination to be
immediately effective upon the receipt of such notice of termination, and
without limitation to any other remedies available to the non-defaulting
party.
ARTICLE 9 - ESCROW OF SOURCE CODE
9.1 The parties hereto acknowledge that the Software source code, and
associated source code materials which are available or necessary to
generate, support or modify the machine-executable version of the Software,
shall be placed in escrow, pursuant to the provisions of the Escrow
Agreement attached as Schedule "B" to this Agreement, to be delivered to
the Licensee as provided for therein.
ARTICLE 10 - WARRANTIES
10.1 The Licensor and Licensee warrant to each other as follows:
(a) each is duly incorporated and subsisting under the laws of its place
of incorporation;
(b) each has the power to and is authorized to enter into this Agreement;
(c) the carrying out of this Agreement will not breach or interfere with
any other agreement which the respective party has entered into; and
(d) neither will enter into another agreement the carrying out of which
would cause a material breach under this Agreement.
10.2 The Licensor warrants as follows:
(a) the Licensor is the owner of, and no other person has the right to
acquire ownership of or the right to use or license use of, the
Intellectual Property, the Software and the Related Materials;
(b) the Software and the Related Materials are original works;
(c) the Licensor has the right to license the Intellectual Property, the
Software and the Related Materials pursuant to the provisions hereto,
free of any claims, liens or encumbrances;
(d) the use of the Software and the Related Materials does not infringe
upon the intellectual property rights, including but not limited to
copyright, patent, trade secret, trade-xxxx or other proprietary
right, of others in Canada or Antigua, or, to the knowledge of the
Licensor, anywhere outside of Canada and Antigua;
(e) there are no existing or threatened legal proceedings brought against
the Licensor, in respect of its ownership of the Intellectual
Property, the Software or the Related Materials or its ability to
license use of same;
(f) the Software does not contain any programs undisclosed to the Licensee
which are intended to permit unauthorized access, or cause damage to
other programs, data or hardware, nor does the Software contain any
feature designed for the destruction of such data (i.e., computer
viruses);
(g) the Licensor shall keep this Agreement, the Software and the Related
Materials free of any liens, claims and encumbrances;
(h) the Software shall, when properly operated and maintained, perform the
various functions and features without Defects, and shall operate in
accordance with the Product Specifications;
(i) the Related Materials accurately and completely describe the
operation, maintenance, performance and functionality of the Software,
and does so in sufficient detail to allow a user to install,
implement, integrate and operate the Software; and
(j) the Software is Year 2000 compliant and, more specifically, (i) is
designed to be used prior to, during and after the calendar year 2000
A.D. without error relating to date data, and shall operate
transparently to the user during such time periods, (ii) is capable of
operating without error relating to the product of date data which
represents or references different centuries or more than one century,
(iii) is designed such that all data fields, date-related user
interfaces and other interfaces include the indication of century, and
(iv) recognizes the Year 2000 as a leap year.
ARTICLE 11 - INDEMNIFICATION
11.1 The Licensor shall indemnify and save harmless the Licensee against all
claims (including liabilities and legal costs and disbursements) made
against the Licensee as a result of its rights under this Agreement,
alleging that any of the Software or the Related Materials constitutes
infringement or any copyright, patent, trademark, trade secret or other
intellectual property right of another.
11.2 The Licensee shall notify the Licensor as soon as possible upon any claim
being made against the Licensee, that use of the Software or the Related
Materials is alleged to be an infringement of the intellectual property
rights of another.
11.3 In the event that the Software or the Related Materials is finally held by
a court of competent jurisdiction to be an infringement of the intellectual
property rights of another or if a dispute is settled pursuant to which the
Licensee is prevented from using the Software or the Related Materials,
then the Licensor shall (without limiting the Licensee's rights pursuant to
this Agreement, at law or in equity):
(a) modify the Software or the Related Materials to make it non-
infringing;
(b) obtain a license for use of the Software or the Related Materials from
the other
party; or
(c) provide a functionally equivalent alternative to the Software or the
Related Materials.
11.4 Without limiting the indemnity provided by the Licensor in section 11.1
hereof, each party covenants and agrees to indemnify and save harmless the
other party from and against any direct loss or damage suffered by the
other party, including but not limited to business profits, as a result of
any material breach of, non- compliance with or untruth of any of the
warranties, representations or covenants of that party contained in this
Agreement, in any schedule hereto, in any documents to be executed and
delivered pursuant to this Agreement or in any documents delivered in
connection with this Agreement or any claims by any other person regarding
matters which rose prior to or as a result of the entering into of this
Agreement, including, without limiting the generality of the foregoing, all
reasonable costs and expenses (including legal fees incurred in connection
with any such loss or damage and in connection with any claim under this
section).
ARTICLE 12 - LIMITATION OF LIABILITY
12.1 Except as expressly provided herein, there are no representations,
warranties or conditions, express or implied, statutory or otherwise,
relating to the Software, the Related Materials, the Intellectual Property
or any services to be provided by the Licensor, including but not limited
to, any implied warranty or condition of merchantability or fitness for a
particular purpose.
12.2 In no event will either party be liable to the other for any special,
indirect, incidental or consequential damages, including but not limited
to, indirect lost profits and lost revenues.
12.3 Except for a breach relating to confidentiality payment obligations or
proprietary rights, each party's liability to the other party for any
claim, demand or cause of action, whether based on contract (including
fundamental breach), tort (including negligence) or otherwise, for any
losses or damages arising out of or resulting from this Agreement, shall
not in the aggregate exceed U.S.$10,000.
ARTICLE 13 - GOVERNING LAW
13.1 This Agreement shall be interpreted and governed by the laws of the
Province of Ontario and the laws of Canada applicable herein.
ARTICLE 14 - CONFIDENTIALITY
14.1 Each of the parties acknowledge that the other party's Confidential
Information is confidential, a trade secret, and is owned by the other
party. Each party will only use the other party's confidential information
for the purposes intended by this Agreement.
14.2 All parties to this Agreement will take all reasonable precautions to
maintain the confidentiality of any other party's Confidential Information
and to prevent the unauthorized disclosure to third parties of the
Confidential Information.
ARTICLE 15 - ASSIGNABILITY
15.1 This Agreement may not be assigned by either of the Licensor or the
Licensee in whole or in part except with the prior written consent of the
other party.
15.2 This Agreement is binding on the parties to this Agreement, their
successors, permitted assigns, heirs, executors and administrators.
ARTICLE 16 - OWNERSHIP
16.1 The Licensee acknowledges that the Licensor will at all times retain
ownership of the Software and associated Intellectual Property rights.
ARTICLE 17 - GENERAL PROVISIONS
17.1 This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof.
17.2 This Agreement cannot be modified or amended other than by written
modification made in writing and executed by the parties hereto.
17.3 All notices, requests, demands or other communications by the terms hereof
required or permitted to be given by one party to another shall be given in
writing by personal delivery, telecopy or by registered mail, postage
prepaid, addressed to such other party or delivered to such other party as
follows:
(a) to the Licensee at: The Cyberbingo Corporation
Xxxx #0 Xxx Xxxxxx Xxxxxxxx
Xx. Xxxx'x, Antigua
(b) to the Licensee at: Precyse Corporation
0 Xxxxxxxx Xxxxxx Xxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
or at such other address as may be given by either of them to the other in
writing from time to time and such notices, requests, demands or other
communications shall be deemed to have been received when delivered or
transmitted by telecopy or, if mailed, forty-eight (48) hours after 12:01
a.m. on the day following the day of the mailing thereof; provided that if
any such notice, request, demand or other communication shall have been
mailed and if regular mail service shall be interrupted by strikes or
other irregularities, such notices, requests, demand or other
communications shall be deemed to have been received forty-eight (48)
hours after 12:01 a.m. on the day following the resumption of normal mail
service. Where a notice is given by telecopy, the hard copy of the
original notice shall be sent by prepaid regular mail on the next business
day after the original notice was sent.
17.4 The waiver by any party of a breach of this Agreement does not constitute
a waiver or other breaches or rights under this Agreement.
17.5 Delays or non-performance of any obligations under this Agreement caused
by events beyond the reasonable control of the party having the
obligation, shall not be a breach of this Agreement. The time of carrying
out the obligation shall extend or a period equal to the time over which
the conditions existed.
17.6 The headings in this Agreement are for reference purposes only and cannot
be used to construe the terms of the Agreement.
17.7 This Agreement does not establish a joint venture or partnership between
the Licensor or Licensee.
17.8 All dollar amounts referred to in this agreement shall be in United States
funds.
17.9 Time is of the essence of this Agreement and each part thereof.
17.10 The provisions of section 5.3 and Articles 11, 12, 13 and 14 shall survive
expiration or termination of this Agreement for any reason and shall
remain in force and effect until such time as the parties may mutually
agree to the release of the obligations contained therein.
ARTICLE 18 - ARBITRATION
18.1 If at any time during the term of this Agreement any dispute, difference
or question shall arise between or among any of the parties hereto
concerning the construction, meaning or effect of this Agreement or the
termination of this Agreement (other than a matter dealt with in this
Agreement or any agreement or covenant entered into
pursuant thereto whereby such agreement or covenant specifically states
that a certain determination shall be final and binding), or the rights or
obligations of the parties hereto or their heirs, executors,
administrators, successors and assigns, then, every such dispute,
difference or question shall be submitted to and settled by arbitration and
the decision of the arbitrator, appointed as hereinafter provided, to deal
with such matters shall be accepted by all of the parties to such dispute,
difference or questions. The arbitration shall be conducted in Toronto,
Canada by a single arbitrator agreed upon by the parties to the matter. If,
within five (5) days after notice of the arbitration has been given by one
of such parties to the other or others, such parties cannot agree upon a
single arbitrator, then in such event, the arbitration shall be conducted
by a single arbitrator appointed by a Judge of the Ontario Court (General
Division) on the application of any such party with notice to the other or
others. The arbitration shall be conducted in accordance with the
provisions of the Arbitration Act (Ontario), as amended, or any successor
statute thereto, in force at the time of such dispute, difference or
question. The decision of the Arbitrator shall be final and binding upon
all parties to such dispute, difference or question, and there shall be no
appeal therefrom. The prevailing party shall be entitled to an award of
arbitration costs.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date and year first above written.
PRECYSE CORPORATION
By:
-----------------------------------
Authorized Signing Officer
By:
-----------------------------------
Authorized Signing Officer
THE CYBERBINGO CORPORATION
By:
-----------------------------------
Authorized Signing Officer
By:
-----------------------------------
Authorized Signing Officer
SCHEDULE "A"
DESCRIPTION OF SOFTWARE
"Software" means the "Cyberbingo" software and any other software developed for
the Licensor, or as a further enhancement, modification, upgrade or new version
of, "Cyberbingo". The Software shall correspond to the version of the Software
demonstrated to and tested by Licensee or its agents.
Attachment 1 to this Schedule A contains a more detailed description of the
Software.
DESCRIPTION OF SUPPORT AND MAINTENANCE SERVICES
Licensor shall:
provide Licensee with escalation procedures;
coordinate all third party on-site support contracts with local
service providers
remotely monitor and maintain the operation of the Web server and
associated systems (the "Cyberbingo System"), including installation
and use of remote control and notification agents;
respond within twenty-four (24) hours to any major problem or failure
of the Cyberbingo System and work continuously until the major problem
or failure is resolved so that the Cyberbingo System is operational
for commercial production purposes. In the event that a major problem
or failure of the Cyberbingo System cannot be resolved remotely within
forty-eight (48) hours then Licensee shall dispatch its personnel to
Licensee's premises (to arrive within a further forty-eight (48)
hours) in order to correct the major problem or failure;
make recommendations to the Licensee concerning the maintenance of
adequate replacement hardware in Antigua to permit local service
providers to rapidly restore the operation of the Cyberbingo System in
the event of a hardware failure; and
the Licensee shall be responsible to acquire, install and maintain the
recommended hardware configuration necessary for the operation of the
Cyberbingo System.
