LICENSE AGREEMENT
ENTERED INTO IN MONTREAL, this 8th day of September, 1999.
BETWEEN: XXXX-XXX.XXX, INC., a Florida corporation duly constituted
under the laws of Florida, having its head office or principal
place of business at 000-000 X.Xxxxxx Xx., Xxxxxxxxx, XX, X0X
0X0
(hereinafter referred to as the "LICENSOR")
AND: G.T.C. TRANSCONTINENTAL GROUP LTD., a corporation duly
constituted under the laws of Canada, having its head office
or principal place of business at 0 Xxxxx Xxxxx Xxxxx, Xxxxx
0000, Xxxxxxxx, Xxxxxx, X0X 0X0
(hereinafter referred to as the "LICENSEE")
PREAMBLE
--------
WHEREAS the Licensor has created and is the owner of the "Direct Connect"
software (the "Software") that enables a detailed description of the Software's
functionalities and specifications being attached to this License Agreement (the
"Agreement") and identified as Schedule A;
WHEREAS Licensee intends to use the Software in conjunction with Licensee's
other licensed software enabling coupon data capture in its Xx-xxx.xx business
operations;
WHEREAS the Licensor agrees to license the Licensee with the Software, subject
to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the aforementioned premises and the mutual
covenants hereinafter set forth, the Preamble forming integral part of this
Agreement, the parties agree as follows:
SECTION 1
DEFINITIONS
-----------
1.1. For the purposes of the Agreement, unless otherwise expressly provided,
the following terms shall have the meaning set forth below:
"Effective Date" means the date referred to at the
beginning of the present Agreement;
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"License Fee" means the costs charged to the Licensee as
described in section 3 and Schedule B
hereof;
"Licensed Know-How" means and includes any and all technical
information, processes, uses, compositions,
detailed design information and any and all
modifications, improvements and
developments thereof owned by the Licensor
and necessary for the use of the Software;
"Licensee's Core Business" means Licensee's business of allowing
manufacturers, retailers, product and
service marketers and packaged goods
companies to distribute secure targeted
coupons and targeted promotions to
consumers via the Internet and, more
particularly, providing the necessary
products and services to (i) allow
consumers to use an internet browser
plug-in to access client promotion coupon
from any web site or banner advertisement
and to download and print associated
household targeted and secure coupons (ii)
aggregate relevant electronic flyer offers
to consumers based on living area (iii)
design online advertising to reach
consumers in a specific area and (iv)
connect consumers to retailers by telephone
while viewing the retailer's web page;
"Territory" means Canada;
"User Database" means the database comprising of all
information generated through the use of
the Software pursuant to this Agreement,
during the term of this Agreement and any
renewal periods thereafter; and
SECTION 2
LICENSE AND RIGHTS PERTAINING TO THE SOFTWARE
---------------------------------------------
2.1. The Licensor represents and warrants that it has the rights to use and
license the Software, that the present license is granted to the Licensee
pursuant to and in respect of those foregoing rights and that the
Licensor has full power and authority to enter into and perform this
Agreement.
2.2. Subject to the terms and conditions of the present Agreement, the
Licensor grants to the Licensee during the term of this Agreement, the
exclusive right to use, market and sublicense the Software in the
Territory.
2.3 Licensee may later on enter into a non-exclusive license agreement to
use, market and sublicense the Software in the U.S.A. or any other
country under terms to be negotiated with Licensor. Licensee shall have a
right of first refusal for thirty (30) days to enter into an exclusive
license to use, market and sublicense the Software in other countries
than the U.S.A. and Canada in Licensee's Core Business under the same
terms as offered by a third party to Licensor, this to exclude the
countries of Japan, Korea, New Zealand, and Australia.
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SECTION 3
LICENSE FEE
-----------
3.1. For the duration of this Agreement and any renewal periods thereafter,
the Licensee shall pay to the Licensor, in Canadian funds, on a quarterly
basis, the License Fee, the amount and particulars of which are further
detailed in Schedule B annexed hereto and forming part of this Agreement.
SECTION 4
TERM AND TERMINATION
--------------------
4.1. Unless otherwise terminated and subject to subsection 4.2 hereof, this
Agreement shall end two (2) years from the date of execution of this
Agreement.
4.2. The Licensee may, in its sole discretion, renew the term of this
Agreement for an additional one (1) year period from the expiry of the
term provided for at subsection 4.1 hereof or any lesser or greater term
as may be agreed to by the parties, by providing at least thirty (30)
days written notice to the Licensor prior to the expiry of the term
provided for at subsection 4.1 hereof.
4.3. The Licensor or the Licensee may terminate this Agreement at any time,
after written notice, for breach or default by the other party, unless
the other party has remedied such breach or default to the satisfaction
of the party complaining, within thirty (30) days after receipt by the
breaching party of said written notice of such default. A waiver by a
party of its right to terminate this Agreement due to any particular
breach or default shall be construed as a continuing waiver. In the event
where the Licensor has breached the exclusivity granted to the Licensee
under subsection 2.2 hereof, the Licensee, after having provided a
written notice to the Licensor detailing the breach and providing a
reasonable period to cure such breach, shall be relieved from paying the
License Fee, until such a time where the Licensor has provided to the
Licensee assurances and evidence that such breach has been cured.
4.4. This Agreement shall be terminated as of right, without notice or
formality if (a) either party proceeds to a liquidation of its assets;
(b) either party hereto makes an assignment of all its property for the
general benefit of its creditors, or if a bankruptcy petition is filed
against it and a final judgment is rendered pronouncing its bankruptcy;
(c) if a receiver, trustee, liquidator or any person possessing similar
powers is appointed to administer or liquidate either party's assets.
4.5. No termination of this Agreement shall prejudice the Licensor's rights
hereunder to the License Fee provided for in subsection 3.1 and to the
User Database Royalties provided for in section 8, in respect of sales or
licensing agreements which have been concluded prior to the termination
of this Agreement but for which an invoice has not been issued or payment
has not been received, as the case may be.
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SECTION 5
CONFIDENTIALITY
---------------
5.1. The Licensor and the Licensee agree to treat as confidential any
information disclosed to the other as it relates to the system use and
marketing of the Software both during and after the duration of this
Agreement. The Licensor and the Licensee shall use reasonable care,
consistent with the measures taken to safeguard each of their own
confidential information, to ensure that, each of their directors,
officers, employees, agents, representatives and customers to whom
confidential information needs to be disclosed to allow full execution of
this Agreement, shall keep all such information confidential.
5.2. Additionally and notwithstanding the standard of confidentiality provided
for in subsection 5.1 hereof, the Licensee's actual and future business
strategy as it relates to the Software shall be treated as confidential
information by the Licensor in compliance with the terms and conditions
set forth in a certain confidentiality and non-use agreement executed on
June 21, 1999.
SECTION 6
OTHER OBLIGATIONS AND REPRESENTATIONS
-------------------------------------
6.1. Nothing in this Agreement shall be construed as:
(a) granting any license or rights to the Licensee other than those
rights granted hereby with respect to the Software; or
(b) creating a partnership or employer/employee relationship, but the
relationship between the parties is acknowledged and agreed to be
that of arm's length independent contractors contracting with each
other.
6.2. The Licensor warrants that within the Territory, the Software is not
infringing on any existing copyrights, patents or trade-marks owned by
third parties; if any claim is made against the Licensee or a sublicensee
concerning a possible infringement on existing similar software, the
Licensor agrees to forthwith indemnify and save the Licensee harmless of
and from any consequences that may reasonably flow therefrom in the form
of any actions or proceedings taken by third parties or others effected
as a result thereof. Without limiting the generality of the above, the
Licensor hereby expressly agrees to assume liability for, and to
indemnify, protect, and hold harmless the Licensee and its agents,
employees, and sublicensees against any and all losses, damages
(including punitive, special and consequential damages), liabilities,
expenses, costs (including reasonable attorneys' fees), penalties and
obligations, loss of expected revenues, arising out of or incurred in
connection with any reasonable claim, demand, action, suit or proceeding
of any kind by any third party in any way relating to the Software. For
the duration of this agreement, Licensor shall maintain an insurance
coverage of at least $1,000,000 to cover for third party claims of any
nature including copyright infringement, and will name Licensee as a
co-insured.
6.3. The Licensor represents and warrants that the Software is and shall be
fully Year 2000 Compliant in accordance with industry standards. Year
2000 Compliance means that the
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Software can accurately process date/time data (including, calculating,
comparing and sequencing) from, into and between the twentieth and
twenty-first centuries including the years 1999 and 2000 and leap year
calculations.
If the Software is not Year 2000 Compliant, the Licensee shall instruct
the Licensor to replace or modify, at the Licensor's expense, all
relevant elements so that the Software and its use by the Licensee
becomes Year 2000 Compliant within thirty (30) calendar days of notice to
the Licensor and the Licensor shall compensate the Licensee forthwith of
any loss of expected revenues linked, directly or indirectly, from the
inability of the Software to be Year 2000 Compliant.
6.4. The Licensor warrants that the Software shall be free from defects in
material and workmanship, and shall conform to the specifications and
functionalities set forth in Schedule A hereof. Furthermore, the Licensor
warrants that the Software shall conform to any other specifications,
drawing, samples or instructions given at any time and from time to time
by the Licensee, provided that conformity, as defined with consideration
to accepted industry standards, is achievable and provided the Licensor
is afforded the time necessary to complete the required work. The
Licensor shall compensate the Licensee forthwith of any loss of expected
revenues stemming from the inability of the Software to perform up to the
specifications described in Schedule A hereof and those required from
time to time by the Licensee.
6.5. During the term of this Agreement and any renewal periods thereafter, the
Licensor will provide to the Licensee, free of charge, any new updates of
the Software as well as any improvements made to the Software as soon as
those updates and improvements are completed and in any event no later
than two business days from their commercial release, or other official
release within any stage of the development process. As well, the
Licensor will provide the Licensee with the required level of support and
training.
6.6. During the term of this Agreement and any renewal periods thereafter, the
Licensee will be responsible for data entry, sales materials,
implementation, monitoring and maintaining a sales plan/program for the
Software, designing, building and managing a web site through which the
Software may be accessed via the Internet.
SECTION 7
RIGHTS TO THE USER DATABASE
---------------------------
7.1. The parties to this Agreement agree that the User Database and all
copyright and other intellectual and proprietary rights therein are and
will remain, through the duration of this Agreement and after its expiry,
the property of the Licensee.
7.2 Upon execution and during the term of this License Agreement, the
Licensor shall deposit, at its own costs, the most current version of
the source code and any supporting documentation in paper or other
suitable fixed form developed for the software (the "Materials") with a
trust company. In addition, the Licensor shall provide the trust company
from time to time improvements, modifications, updates or changes to the
Materials. In the event of a default such as bankruptcy, insolvency or
breach by Licensor, Licensor agrees to guarantee Licensee full and
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complete access to Software server based in Toronto for the full term of
the contract and any renewal periods of the contract. Licensee will
always be able to use to their fullest capacity the Software in the
listed territory for the duration of the contract. The Trust Company
will have access to the Materials to ensure 100% term use.
SECTION 8
REPRESENTATION AND CONTACT
--------------------------
8.1 Both the Licensee and the Licensor will designate a contact person
responsible for regular reviews of data and projections between the
Licensor and the Licensee in order for both parties to adequately perform
their respective obligations.
SECTION 9
GENERAL PROVISIONS
------------------
9.1. Any notices or requests which the parties may be required to give
pursuant to this Agreement shall be sent by telecopier or by registered
mail, postage prepaid, to the addresses set out below:
IF TO THE LICENSOR, AT:
-----------------------
Xxxx-Xxx.xxx, Inc.
000-000 X.Xxxxxx Xx.
Xxxxxxxxx, XX
X0X 0X0
Attention: Xxxxx Xxxxxxx
President and CEO
Telephone: (000) 000-0000
Fax: (000) 000-0000
IF TO THE LICENSEE, AT:
-----------------------
G.T.C. Transcontinental Group Ltd.
0 Xxxxx Xxxxx-Xxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Director, Marketing and Development
Telephone: (000) 000-0000
Fax: (000) 000-0000
WITH A COPY TO:
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Xx. Xxxx Xxxxxx, Vice-President, Legal Affairs and Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
and shall be deemed to have been received three (3) days after the date
of mailing or fax.
9.2. This Agreement sets forth the entire agreement and understanding between
the parties as to the subject matter hereof and neither of the parties
shall be bound by any conditions, definitions, warranties or
representation with respect to the subject matter hereof, other than as
expressly provided in this Agreement.
9.3. This Agreement shall be governed by and interpreted in accordance with
the laws of Quebec and the laws of Canada applicable therein.
9.4. In the event that any section or subsection is held to be invalid or
unenforceable or inapplicable by a court of competent jurisdiction, such
invalidity or unenforceability shall not affect the remainder of the
provisions hereof, but such part shall be fully severable, and this
Agreement shall be construed and enforced as if such invalid or
unenforceable or inapplicable part had never been inserted herein and the
parties do hereby agree that they would have signed this Agreement
without such invalid or unenforceable part included herein.
9.5. This Agreement will be binding upon the respective parties hereto, and
their assignees, provided that neither party shall assign this Agreement
or any rights herein without the other party's written consent. It is
understood however that Licensee shall have the right to assign this
Agreement to one of its affiliates upon written notice to Licensor.
9.6. The obligations in section 5 and in subsections 6.2 and 6.4 shall survive
the termination of this Agreement.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their respective officers duly authorized, as of the date first mentioned in
this Agreement.
(Licensor) XXXX-XXX.XXX, INC.
Per: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President and CEO
(Licensee) G.T.C. TRANSCONTINENTAL GROUP LTD.
Per: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Director, Marketing and Development
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SCHEDULE A
----------
SPECIFICATIONS OF THE SOFTWARE
------------------------------
The DIRECT CONNECT software, developed by XXXX-XXX.XXX and Quad-Linq Software is
designed to:
1) Allows CONSUMERS, using a single line phone/modem connection to the
Internet, to utilize the features of the DIRECT CONNECT software.
2) Allows BUSINESSES, using a DIRECT CONNECT license (one-year term), to
set up DIRECT CONNECT icons on their business web pages, allowing
consumers to utilize the features of the DIRECT CONNECT software.
CONSUMERS FEATURES AND BENEFITS INCLUDE:
---------
- DIRECT CONNECT software is free to all consumers.
- DIRECT CONNECT software installs the first time the icon is used.
- DIRECT CONNECT software will automatically upgrade to the newest version when
clicked any time after the initial installation. - DIRECT CONNECT features a
direct (voice) connection, allowing consumers to connect to businesses from the
Internet by placing a regular phone call with their single line phone/modem
connection while viewing the business' web page. Specifically:
a) Controls modem/phone connection.
b) Auto dials the business.
c) Alerts you to pick up the phone.
d) Allows the consumer to view the web page and talk to
business simultaneously.
e) When finished, the consumer hangs up and clicks the "DONE"
button.
f) The Internet link is re-established.
g) The Consumer can now talk to businesses without logging on
or off the Internet.
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- DIRECT CONNECT also features an email option for consumers to receive an email
of the business' specials, promotions, coupons, and/or information from a
business by using the e-commerce (email) button. The consumer is able to enter
any email address to receive the e-commerce email from the business. - DIRECT
CONNECT'S Voice mail feature, when used by the consumer is identical to the
direct (voice) connection, except the call is placed to the business' message
service or/and answering machine.
- Consumers will have free technical support (during designated business
hours) available Toll free in Canada and the USA.
DOWNLOAD SPEED COMPARISONS
--------------------------
Current Size of Direct Connect: 348 KB
MODEM MAXIMUM RATE APPROXIMATE TIME TO DOWNLOAD IN MINUTES
AND SECONDS (MM:SS)
RATING OF DOWNLOAD * ACTUAL SIZE DOWNLOAD SIZE **
56,600 ** 6.5 KB/second 00:54 01:24
33,600 4.2 KB/second 01:24 02:06
28,800 3.6 KB/second 01:36 02:30
BUSINESS FEATURES AND BENEFITS INCLUDE:
--------
- The business will receive a one-year license for each DIRECT CONNECT account.
- Unlimited use of each DIRECT CONNECT account on business web pages.
- Easy to set up by a virtual on-line program.
- 24 hr. a day, 7 days a week access to each DIRECT CONNECT account with complete control over account
information and features.
- Illustrated printable instruction manual.
- Technical support (during designated business hours) available toll free in Canada and the USA.
- Technical support and/or training (during designated business hours) as
required, will be provided for Xxxxx.xx and the staff of Xxxxx.xx.
Each account will include the features of:
- A direct (voice) connection to any telephone number used by the business. A
second telephone number option is available and will be used by the
software if the consumer should get a busy signals from the primary
telephone number.
- Email specials of unlimited length can be composed in standard ASCII
characters by the business for consumers to request and receive.
- Voice mail: any telephone number and/or answering service may be used by business.
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Development of new value added features for the DIRECT CONNECT software will
include, but will not be limited to: a ten telephone number memory call back
button and a ten telephone number, consumer programmable phone book. A release
date for these new features is not currently available.
DIRECT CONNECT is designed to work with a consumer's existing hardware. No
guarantee of service is offered if the consumer has no data modem with a regular
touch tone phone, or if single phone line is shared with a fax and/or custom fax
software, or if Internet connection is by ISDN, ADSL and/or cable modem, or if
computer is part of a LAN (Local Area Network) or WAN (Wide Area Network), or
any other hardware/software not identified as common for consumers. If a
consumer does not meet the pre-requisites needed to utilize the Direct Connect
software, the Direct Connect software, upon not find a modem, will assume the
consumer has a phone line available, and will display the business phone number
attached to the Direct Connect license.
INTERFACE AND INSTRUCTIONS for the Direct Connect software will be modified
jointly by both parties for clarity and understanding from the consumer's point
of view.
DIRECT CONNECT software is designed and tested to work with Windows 95 and
Windows 98 only. All operating systems including Unix and Macintosh may work
when running Microsoft Windows, however the software is not tested or supported
for alternative operating systems.
DIRECT CONNECT is designed to work with Java enabled Microsoft Internet Explorer
and Netscape Navigator. Pre-Java versions will not function properly with the
software.
ALTHOUGH DIRECT CONNECT MAY WORK WITH UNCOMMON AND/OR CUSTOM HARDWARE/SOFTWARE
------------------------------------------------------------------------------
USED BY CONSUMERS, DIRECT CONNECT IS DESIGNED FOR STANDARD COMPUTERS, STANDARD
------------------------------------------------------------------------------
DIAL-UP CONNECTIONS, AND A TOUCH TONE PHONE (CONNECTED TO THE MODEM
-------------------------------------------------------------------
AND/OR SAME TELEPHONE NUMBER).
------------------------------
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SCHEDULE B
----------
PARTICULARS OF THE LICENSING FEE
--------------------------------
Distributors/Sub-distributors selling DIRECT CONNECT licenses to businesses will
have a distributor account with as many as required number of blank accounts set
up to distribute to the businesses. All accounts will be available to
view/control by the Distributors/Sub-distributors on a master log-on screen.
XXXX-XXX.XXX reserves the right to access all master log-on screens to verify
accounts purchased/invoiced.
PURCHASE PRICE
--------------
Transcontinental can purchase each unit for $80.00 CDN Funds, per year plus
taxes if applicable.
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SCHEDULE C
----------
COMPARISON OF CLOSEST COMPETITOR
--------------------------------
===============================================================================================================
XXXX-XXX.XXX'S VOICE OVER IP
DIRECT CONNECT ALTERNATIVE
===============================================================================================================
SETUP Easy. Easy.
350kb - 2 minute download using 56k modem. 1250kb - 10 minute download using 56k modem.
Automated software (instant install). Manual software (activated by user)
NO REGISTRATION REQUIRED. Registration required (name, address and a
NO CREDIT CARD REQUIRED. lot of personal information).
NO PREPAYMENT REQUIRED. Credit card required.
===============================================================================================================
COST SOFTWARE - free to consumers. SOFTWARE - free to consumers. Account must
NO ACCOUNT NECESSARY. have $100 minimum to start.
Businesses charged an annual fee of Businesses charged an annual fee of $US
$US 149.95 (or less, depending on $US 500.00 (or more, depending on size of call
promotions) to put a direct-link icon center) to put a direct-link icon on Web page.
on Web page.
Consumer uses current telephone company Long distance charges to anyone using
while viewing web page. system with rates controlled by the company
and charged to your credit card.
LOCAL CALLS - FREE. Local calls - 4.9 cents per minute*.
Long distance calls - As per consumer's long Long distance calls - 4.9 cents per minute*.
distance carrier.
Toll free (1-800) calls - MOST are free,
otherwise 4.9 cents per minute*.
TOLL FREE (1-800) CALLS - FREE
===============================================================================================================
HARDWARE USES EXISTING HARDWARE. Requires a sound card, speakers and
& SOFTWARE Software is small and quick to download. microphone.
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===============================================================================================================
REQUIREMENTS Easy to install and use. Software is bulky and takes up to 5-6 times
longer to download.
Easy to install and use.
===============================================================================================================
SECURITY USES CONSUMER'S OWN PHONE TO PLACE THE CALL. Uses Internet, platform and company's phone
switches.
Purchases are secure.
Internet security issues still relevant.
===============================================================================================================
UPDATES INSTANT AND AUTOMATED. Notification of changes for long distance
charges are dependent on the company
e-mailing consumer with information.
Updates are not guaranteed.
===============================================================================================================
SOUND USES CONSUMER'S OWN PHONE. Filters through the Internet and switches.
QUALITY CALLS ARE AS CRISP AND CLEAR AS CAN NORMALLY Comparable to a static radio phone.
BE EXPECTED.
===============================================================================================================
SUMMARY FREE TO CONSUMERS. 24 hour voice mail.
Directly connect to business. Easy installation.
24 hour voice mail. Although software is free, revenue is
E-specials available. created through long distance and local
Auto-notification before commencing any long charges.
distance (toll) call. Cost of long distance and local calls is
Easy installation. controlled by this company.
Small and automated (works like a plug-in). Registration required.
Toll-free technical help desk. Credit card required.
Instantaneous updates. When asked about the poor sound quality of
the call, answer was "the system is new and
will be improved at a later date."
===============================================================================================================
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