EXHIBIT 10.6
[LOGO]
Xxxxxxx
Xxxxxx Xxxxxxxxx
Vice President
Corporate Development
Global Information
Technology
00 Xxxxx Xx Xxxx, 00xx
Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Tel 000.000.0000
Fax 000.000.0000
November 27, 1998
Xx. Xxxxxxxxxxx Xxxxxxxx
President
724 Solutions Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Sir:
RE: WAIVER OF EXCLUSIVITY RIGHT IN TECHNOLOGY LICENCE AGREEMENT
We are writing with respect to Section 2.4 ("Exclusivity") of that certain
Technology Licence Agreement between 724 Solutions Inc. and Bank of Montreal,
made as of April 30, 1998 (the "Agreement").
We understand that 724 Solutions Inc. proposes to enter into a joint
services relationship among 724 Solutions Inc., Bank of Montreal and Bell
Mobility Cellular Inc. as contemplated by a Memorandum of Understanding, a final
copy of which we have reviewed. It is contemplated that in addition to Bank of
Montreal, other Canadian Financial Institutions (as such term is defined in the
Agreement) may become members of a services organization that facilitates the
delivery of e-commerce to Canadians. In this regard, 724 Solutions Inc. may wish
to license certain or all of the 724 Technology (as such term is defined in the
Agreement) to such Canadian Financial Institutions in order to facilitate the
delivery of their products and services.
Bank of Montreal hereby agrees to waive its rights and release
724 Solutions Inc. from any ongoing obligations under Sections 2.4.1
("Exclusivity in Canada") and 2.4.2 ("Preferred Financial Partner in Canada") in
respect of any Canadian Financial Institution upon notice by 724 Solutions Inc.
that it requires that such waiver be provided by Bank of Montreal. In
consideration therefor, 724 Solutions Inc. shall refund to BMO, on a per
Canadian Financial Institution basis (the "Refund"), a portion of the technology
licence fee paid by Bank of Montreal to 724 Solutions Inc. in a Year (which is
defined as March 1 to the end of the last day in February of each calendar year)
equal to an amount that is a percentage of the up-front and renewal licence
fees, however structured, paid by each Canadian Financial Institution to
724 Solutions Inc. for the right to use the 724 Technology (excluding any other
amounts payable to 724 Solutions Inc., such as payments due to 724 Solutions
Inc. in respect of transactions conducted using the 724 Technology, maintenance
and time and materials services). Such amount is equal to:
(a) 20% for any licence with up-front and renewal fees, however structured
of $2.5 million or less received by 724 Solutions Inc. in each Year; and
(b) 25% for any such licences with fees above $2.5 million received by
724 Solutions Inc. in each Year.
Any Refund payable pursuant to this letter agreement is subject to the
following additional terms and conditions:
(i) any amounts received by 724 Solutions Inc. from Bank of Montreal are
excluded from the above calculation;
(ii) the aggregate of the Refunds payable in any Year is capped at $700,000;
(iii) Refunds will cease to be payable if Bank of Montreal terminates the
Continuing Alliance (as such term is defined in the Agreement);
(iv) each Refund will be paid to Bank of Montreal within 30 days of receipt
of the relevant up-front or renewal licence fee; and
(v) 724 Solutions Inc. and Bank of Montreal will use their best efforts
acting in good faith to characterize the Refund for tax purposes in a
manner that minimizes any tax exposure of both parties.
The forgoing constitutes the entire agreement between the parties hereto in
respect of the matters discussed herein.
Yours truly,
/s/ Xxxxxx Xxxxxxxxx
AGREED this 27(th) day of November, 1998
724 SOLUTIONS INC.
per: /s/ Xxxxxxxxxxx Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxxxxx
PRESIDENT
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