Exhibit 3.17
CONTINUING SERVICES AGREEMENT
-----------------------------
THIS AGREEMENT (the "Agreement") is made as of June 17, 1997 by and between
XXXXXX'X INTERACTIVE ENTERTAINMENT COMPANY, a Nevada corporation ("HIEC"), and
SKY GAMES INTERNATIONAL LTD., a Bermuda exempted company ("SGI").
Recitals
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A. Prior to the date hereof, Xxxxxx'x Interactive Investment Company
("HIIC") an affiliate of HIEC, and a subsidiary of SGI were 20% and 80% owners,
respectively, of Interactive Entertainment Limited, a Bermuda exempted company
("IEL"), the day to day business of which was managed by HIEC, pursuant to a
management agreement dated as of December 30, 1994 between and among HIEC and
IEL (the "Management Agreement").
B. Pursuant to the Plan and Agreement of Merger and Amalgamation dated as
of May 13, 1997 (the "Amalgamation Agreement"), IEL was merged into a subsidiary
of SGI, effective June 17, 1997, with such subsidiary as the surviving company,
which was then merged into SGI, with SGI as the surviving company (the
"Amalgamation").
C. Pursuant to the Amalgamation Agreement, HIEC and SGI agreed to
terminate the Management Agreement effective June 17, 1997 and further agreed
that HIEC would provide certain continuing administrative and support services
to SGI after the Amalgamation.
D. Pursuant to the Amalgamation and that certain Termination and Release
Agreement dated June 17, 1997, the Management Agreement has been terminated
effective June 17, 1997.
Agreement
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NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Term. The term of this Agreement shall commence on the date hereof and
shall continue from month to month thereafter, provided that either party may
terminate this Agreement as to any or all component(s) of the Continuing
Services (as hereinunder defined) upon 90 days prior written notice to the other
party, except as to those Continuing Services described in Schedule AI, for
which 150 days prior notice must be given; subject to, in the case of SGI
serving such notice to terminate on HIEC, the payment of certain of HIEC's
termination costs (the "Termination Costs") by SGI as provided in Schedule B.
2. Continuing Services.
(a) HIEC shall provide to SGI the services set forth in Schedule A
attached hereto and incorporated herein (the "Continuing Services").
(b) The Continuing Services shall be rendered in a timely and professional
manner consistent with the standards for the provision of such services by HIEC
to SGI pursuant to the Management Agreement.
3. Fees. In consideration of HIEC providing the Continuing Services SGI
will pay HIEC the fees therefore as set out in Schedule B attached hereto and
incorporated herein (the "Fees"). The Fees shall be paid monthly, in arrears,
on or before the fifteenth day of each month, following receipt of HIEC's
invoice therefore.
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4. Maintenance. It is understood that regular maintenance and testing may
be required in order to assure the smooth operation of the various systems and
equipment used to provide the Continuing Services, and each party shall
schedule, to the greatest extent possible, all systems maintenance and testing
at times reasonably agreed upon by both SGI and HIEC which shall be selected to
minimize interference with regular operations. If the two parties are unable to
agree on such times, maintenance and testing shall be scheduled at times
consistent with the practices of HIEC and SGI prior to the date hereof.
5. Default. Each of the following events shall constitute an "Event of
Default" hereunder:
(a) either party breaches any covenant set forth in Section 8 hereof; or
(b) either party breaches any other covenant, warranty or agreement
hereunder and such breach continues for 15 days after receipt of written
notice thereof.
6. Remedies. If any Event of Default shall occur, the non-defaulting
party shall have the right to: (i) suspend its obligations hereunder; or (ii)
terminate this Agreement without any liability to the defaulting party for such
termination and shall have all other rights and remedies available to it at law
or in equity.
7. Force Majeure. HIEC shall be excused for any failure or delay of
performance hereunder in the event such is caused by natural disaster, fire,
flood, act of God or other occurrence beyond the reasonable control of such
party and which has resulted in HIEC's or its affiliates' inability to perform
for itself those services which constitute Continuing Services.
8. Confidentiality. All non-public information concerning either party or
its business activities communicated to or otherwise acquired by the other party
at any time, shall be held in confidence and shall be used only for the purpose
of providing or receiving the Continuing Services as set forth herein, except to
the extent that such information can be shown to have been (a) in the public
domain through no fault of the other party, its affiliates, agents or employees,
or (b) lawfully acquired from other sources by the other party. Such information
shall not be disseminated by the other party other than to those persons who
have responsibility for carrying out or receiving the Continuing Services or as
may be otherwise required by law.
9. Disclaimer of Warranty: Limitation of Liability.
(a) HIEC shall not be liable to SGI for any liability, claim, loss,
damage or expense of any kind or nature (including strict liability in
tort) caused directly or indirectly, by the provision of Continuing
Services, regardless of source, or any inadequacy thereof for any purpose,
or any deficiency or defect therein; or any interruption or loss of
Continuing Services, or for any loss of business, loss of anticipated
profits or any special, indirect, incidental, consequential or exemplary
damages whatsoever caused.
(b) HIEC shall not be liable to SGI for any loss of business, loss of
anticipated profits or any indirect, incidental, consequential or exemplary
damages arising from any cause whatsoever, including, without limitation,
any breach of this Agreement.
(c) Any and all express and implied warranties including, but not
limited to, warranties of merchantability or fitness for any purpose or
use, are expressly excluded and disclaimed. It is agreed that the sole
obligations of HIEC to SGI are limited to those expressly set forth in this
Agreement.
10. Cooperation and Dispute Resolution. The parties hereto acknowledge
that certain scheduling conflicts may arise with respect to certain matters,
including scheduling of out-of-service times for certain equipment and systems
for testing and upgrading. The parties agree to cooperate with respect to such
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matters so as to effect the minimum disruption to the business of each party.
If the parties are unable to agree on such items, resolution of the dispute
shall be achieved as follows:
(a) Xxx Xxxxx of HIEC and Xxxxxx Xxxxxxxx of SGI shall meet and attempt to
resolve any such dispute. If such dispute is not resolved by them within 5
days, the dispute shall proceed to step (b).
(b) Xxxx Xxxxxx of HIEC and Xxxxxxxx Xxxxxx of SGI shall meet and attempt
to resolve such dispute not resolved in step (a). If such dispute is not
resolved by them within 5 days, the parties agree that such dispute shall
be submitted to arbitration pursuant to Section 11 hereof.
11. Arbitration.
(a) Any arbitration of disputes hereunder shall be conducted in accordance
with the following procedures:
(i) The parties shall mutually agree upon a single qualified and
disinterested arbitrator who is not an affiliate of either party (except as
noted below) who shall render a decision within 30 days of such
appointment.
(ii) If the parties cannot agree on a single arbitrator within 20 days
after an election to submit the matter to arbitration, then each party
shall appoint one arbitrator within 10 days following such 20-day period.
The two appointed arbitrators shall within 10 days of such referral appoint
a third arbitrator, and if such arbitrators are not able to agree on such
third arbitrator, shall apply to the branch of the American Arbitration
Association nearest to Memphis, Tennessee, to designate and appoint such
third arbitrator. The three arbitrators shall reach a decision within 20
days after the appointment of the third arbitrator.
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(A) If either party fails to appoint an arbitrator, then the single
arbitrator designated by the other party shall act as the sole
arbitrator and shall be deemed to be the unanimously approved
arbitrator to resolve such dispute. The decision and award of such
sole arbitrator shall be binding upon the parties.
(iii) The fees and expenses of the arbitrators shall be paid by the party
whose position is not adopted by the arbitrators. The award of any
arbitrators made in accordance with this Section 11 shall be binding on the
parties and enforceable in any court of competent jurisdiction.
(b) In all arbitration proceedings submitted to the arbitrators, the
arbitrators shall be required to agree upon and approve the substantive
position advocated by one party with respect to the dispute. All
proceedings by the arbitrators shall be conducted in accordance with the
Uniform Arbitration Act, except to the extent the provisions of such Act
are modified by this Agreement or the mutual agreement of the parties.
Unless otherwise agreed, all arbitration proceedings shall be conducted in
Memphis, Tennessee.
12. Assignment. This Agreement may not be assigned, in whole or in part, by
either party without the prior written consent of the other party.
13. Notice. All notices and demands which may be or are required to be
given by either party to the other hereunder shall be in writing and shall be
personally delivered or sent by facsimile, United States certified or registered
mail, postage prepaid, or by prepaid express mail or overnight courier. Notices
and demands delivered personally or by facsimile shall be deemed given on the
date of delivery, notices and demands delivered by mail shall be deemed given
three business days after deposit in the United States mail, and notices and
demands delivered by express mail or overnight courier shall be deemed given one
business day after deposit.
Notices sent to SGI shall be addressed as follows:
Sky Games International Ltd.
000 Xxxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
With a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx XxXxxx, Esq.
or to such other person or place as SGI may from time to time designate in a
written notice to HIEC.
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Notices sent to HIEC shall be addressed as follows:
Xxxxxx'x Interactive Entertainment Company
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
With a copy to:
Xxxxxx'x Interactive Entertainment Company
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. XxXxxxxx
or to such other person or place as HIEC may from time to time designate in a
written notice to SGI.
14. Applicable Law. This Agreement shall be governed and construed in
accordance with the internal laws of the State of Tennessee without regard to
conflict of laws provisions.
15. Waiver of Breach. Waiver by either party of nonperformance or any
other breach of any provision of this Agreement shall not operate as a waiver of
any subsequent nonperformance or other breach of the same or any other
provision.
16. Relationship Between the Parties. Nothing contained herein is
intended to create a relationship between the parties other than as independent
contractors. Neither party hereto has undertaken to perform any obligation of
the other party to assume any responsibility for the business or operations of
the other. Nothing herein shall be construed to allow either party to bind the
other.
17. Severability. Should any provision of this Agreement be declared or
found to be illegal, unenforceable or void, both parties shall be relieved of
all obligations arising under that provision. If the remainder of this
Agreement is capable of substantial performance, the remainder of this Agreement
shall remain in full force and effect.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
19. Complete Agreement. This Agreement, when executed by both parties,
constitutes the final written expression of all the terms of the agreement
between the parties with respect to the subject matter hereof, and is a complete
and exclusive statement of those terms. It supersedes all understandings and
negotiations concerning the matters specified in this Agreement. Any
representations, promises, warranties or other statements made by either party
not expressly set forth herein shall be given no force or effect. No addition
to or modification of any provision of this Agreement be binding upon either
party unless made in writing and signed by a duly authorized representative by
both parties.
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Sky Games International Ltd. Xxxxxx'x Interactive Entertainment Company
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
-------------------------- --------------------------
Title: Chairman Title: President
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Schedule A
I. Data Network and Voice Telecommunications
Overview:
IEL will use various voice and data telecommunications network and
equipment services provided by or controlled by HIEC. These voice and data
telecommunications network and equipment services will be provided only
while IEL is a sub-lessee of HIEC at 000 Xxxxxxxxx Xxxx, Xxxxx X-000,
Xxxxxxx, Xxxxxxxxx 00000.
Services:
Local telephone access and usage via BellSouth
. Point to Point T1 0000 Xxxxxx Xxxx to 000 Xxxxxxxxx Xxxx
. Voice Mail
Long distance telephone access and usage via AT&T (or HIEC current long
distance service provider.)
. Includes network charges, D channel usage, T1 usage, and
BellSouth Smartpath.
Telephone equipment
. Telephones
. 21 phones (combination of new and existing equipment)
. PBX equipment
. 1 AT&T Definity G3S
. 4 Digital Line Cards
. 1 Aux Trunk Interface
. 2 16 Port Analog Line Cards
. 1 DS1 Card
. 1 715 BCS Terminal
. All telephone and PBX installation and maintenance billing for the
000 Xxxxxxxxx Xxxx equipment is on a separate account. The invoice
will be forwarded to IEL each month for their direct payment.
Data Network Router, HUB, DSU/CSU and Maintenance
. Network access to HIEC network using the following equipment
housed at 000 Xxxxxxxxx Xxxx
. CNX 500
. Dual TR
. Quad Serial
. Series 90
. 4 TR Modules
. Uninterrupted power supply system
Maintenance and support of voice telecommunications network and equipment
includes HIEC telecommunication engineering services not to exceed 8 hours
per month. Additional hours may be requested and billed separately if the
request can be accommodated.
Maintenance and support of data network and equipment includes HIEC network
engineering services not to exceed 8 hours per month. Additional hours may
be requested and billed separately if the request can be accommodated.
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Intervals and other charges for Maintenance and support of voice
telecommunications network and equipment including adds, moves, and changes
of voice terminals are as follows:
Where equipment is available:
1 to 3 stations 3 working days
4 to 10 stations 7 working days
11 to 15 stations 14 working days
16+ stations Must be scheduled
Where equipment is not available:
1 to 5 stations 7 working days
6 to 10 stations 14 working days
11 to 15 stations 17 working days
16 + stations Must be scheduled
Internet Access:
IEL will be able to use their current Internet services (World-Wide-
Web access, email) after the transition occurs. HIEC will provide
troubleshooting, email set-up and server configuration services. HIEC
will not provide web site hosting or unique domain registration for
email services unless negotiated in a separate agreement. HIEC will
not provide support for individual PC networking problems.
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II. Xxxxxx'x Systems Support
Overview:
IEL will use customer help desk services provided by HIEC to report
problems with equipment used to provide the Services contained herein,
including data network connectivity, voice telecommunications, and data
center based servers. Specifically excluded from the HIEC Systems Support
services are PC-related questions typically resolved by end-user
consultants.
Services:
HIEC will provide 24 hour-per-day, 7 day-per-week telephone support to all
users of HIEC Transitional Services. Support will be consistent with the
services provided to IEL prior to the merger. This includes answering
trouble calls from IEL users, opening trouble tickets, performing initial
trouble-shooting, and when necessary, escalating the problem to the
appropriate engineering group.
HIEC System Support staff will not provide PC support for end-user
applications, user errors, or PC problems not related to the Transitional
Services.
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III. Client/Server Engineering
Overview:
IEL will use client/server engineering services provided by HIEC to perform
server configuration and support, game programming design review and
troubleshooting, client/server messaging design review and troubleshooting,
network analysis on laboratory and on-board systems, and general
consulting. These services have been commonly performed by Xxxxx Xxxxxxx,
but may be performed by engineers with the requisite technical skills.
Services:
IEL will give HIEC notice via email or letter to HIEC (Attention: Xxx
Xxxxx) four weeks in advance of any overseas travel requirements. Within
five working days HIEC will respond whether staff can be provided for the
trip.
IEL will give HIEC notice via email or letter to HIEC (Attention: Xxx
Xxxxx) two weeks in advance of any domestic travel requirements. Within
three working days HIEC will respond whether staff can be provided for the
trip.
HIEC may, at its discretion, substitute personnel provided that all
personnel provided have the requisite skill sets if project schedules or
resource scheduling require. HIEC will attempt to provide continuity of
personnel where possible to ensure that transition times are minimized.
HIEC will provide engineering services up to 40 hours/month (with excess
hours billable dependent upon resource availability).
HIEC Client/Server Workstation Engineering will provide support to IEL's
development servers (while the systems meet HIEC supported hardware and
software standards), the game development servers and game test equipment.
HIEC Client/Server Workstation Engineering will not provide support to
IEL's individual workstations.
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Description of Client/Server services/skill set:
=========================================================================================================================
Location Category Description Skill Set Timeframe
-------------------------------------------------------------------------------------------------------------------------
Memphis & Development Meetings/planning Project management Ad-hoc
Irvine
-------------------------------------------------------------------------------------------------------------------------
Memphis Architecture review Systems architecture Ad-hoc
SCO UnixWare
Windows Networking
Client/Server prog.
IEL Game familiarity
IEL Txn Server
Token Ring networks
TCP/IP protocol
-------------------------------------------------------------------------------------------------------------------------
Memphis Problem Determination & Systems architecture Ad-hoc
Irvine Resolution SCO UnixWare
Singapore Windows Networking
Client/Server prog.
IEL Game familiarity
IEL Trxn Server
Token Ring networks
TCP/IP protocol
Network Sniffer
LanMeter
-------------------------------------------------------------------------------------------------------------------------
Memphis Support NT Server & Workstation Windows NT Ad-hoc
Irvine Windows Networking
-------------------------------------------------------------------------------------------------------------------------
Memphis Windows/DOS PC Windows 3.11 Ad-hoc
Irvine Windows Networking
-------------------------------------------------------------------------------------------------------------------------
Memphis UnixWare server PC hardware
Irvine SCO UnixWare
Windows Networking
Client/Server prog.
IEL Game familiarity
IEL Trxn Server
Token Ring networks
TCP/IP protocol
Network Sniffer
LanMeter
-------------------------------------------------------------------------------------------------------------------------
Memphis MASC systems PC hardware Ad-hoc
Irvine SCO UnixWare
MASC applications
Token Ring networks
TCP/IP protocol
Network Sniffer
LanMeter
-------------------------------------------------------------------------------------------------------------------------
Memphis Internet Email & www Standard Internet services Ad-hoc
-------------------------------------------------------------------------------------------------------------------------
Memphis File transfer Local storage for externally Ad-hoc
Irvine accessed files
Directed-access to external
(Quest) internet sites
-------------------------------------------------------------------------------------------------------------------------
Singapore Testing Networking Token Ring networks As scheduled
& Other TCP/IP protocol and approved
=========================================================================================================================
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=========================================================================================================================
Location Category Description Skill Set Timeframe
-------------------------------------------------------------------------------------------------------------------------
Network Sniffer
LanMeter
-------------------------------------------------------------------------------------------------------------------------
Server operation SCO UnixWare As scheduled
MASC applications and approved
-------------------------------------------------------------------------------------------------------------------------
Game operation Windows Networking As scheduled
Client/Server prog. and approved
IEL Game familiarity
IEL Trxn Server
Token Ring networks
TCP/IP protocol
Network Sniffer
LanMeter
=========================================================================================================================
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IV. Data Center Operations
Overview:
IEL will use data center operations support provided by HIEC to monitor
equipment used to provide the Services contained herein, including
premises-based network hardware, communications servers, and file servers.
Operations staff will also back-up computer programs and files located on
file servers on a schedule similar to one followed prior to the spin-off.
Services:
HIEC will provide 24 hour-per-day, 7 day-per-week data center operations
support to IEL. Support will be consistent with the services provided prior
to the merger. This includes assisting HIEC System Support staff with
troubleshooting, providing tape back-ups of data files and programs on
servers at the center, and monitoring equipment for performance.
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V. Unix Engineering
Overview:
IEL will use Unix Engineering support provided by HIEC troubleshoot and
maintain IEL owned equipment operating at the HIEC Data Center.
Services:
HIEC will provide 24 hour-per-day, 7 day-per-week Unix Engineering on-call
support to users of HIEC SkyServer. Support will be consistent with the
services provided prior to the merger. This includes assisting HIEC System
Support staff with troubleshooting, routine maintenance, and technical
consulting. Total baseline Unix Engineering support includes 8 hours per
month.
SkyServer software license fees will be billed under the separate Software
License Agreement dated August 1, 1996.
SkyServer hardware assets (specifically the NCR model S40 3438-1000-8090;
Serial No. 36-30122150 (the "Computer") and the U.S. Robotics modem) will
be transferred to IEL at a cost of $12,500, effective June 17, 1997. HIEC
will, at the request of IEL, execute any documents necessary to effect such
transfer. Ongoing maintenance fees and hardware expenses will be the
responsibility of IEL. IEL will pay HIEC the sum of $12,500 on June 17,
1997.
SkyServer purchased software (i.e., UNIX Operating System and Informix data
base) loaded on the Computer will be transferred to IEL, at a cost of
$19,695.84, assuming that the term of the license for each such software
program permit such assignment. If assignment is not permitted, HIEC will
seek such an assignment and IEL will execute any documents reasonably
necessary to effect such assignment. Ongoing maintenance fees and upgrades
will be the responsibility of IEL. IEL will pay HIEC the sum of $19,695.84
on June 17, 1997.
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VI. Xxxx X'Xxxxxx Consulting
Overview:
IEL will use consulting support provided by HIEC employee Xxxx X'Xxxxxx.
Services:
HIEC will provide consulting services of employee Xxxx X'Xxxxxx to transfer
his current responsibilities and knowledge specific to IEL development
efforts to IEL employees designated by IEL.
HIEC will provide such services up to 90 days after the spin-off. Pricing
includes up to 40 hours per week for the first 4 weeks, then up to 20 hours
per week for the next 4 weeks in a consulting role with IEL and "on call"
for the next 4 weeks. Additional hours may be used and billed separately
based on availability.
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Schedule B
Fees
Methodology:
I. Data Network and Voice Telecommunications - $5,000 per month
. Includes equipment depreciation and maintenance.
. Includes telecommunication engineering support up to 8 hours per month.
. Includes network engineering support up to 8 hours per month.
. Includes telephone local and long distance usage charges up to $1,000 per
month. Charges in excess of $1,000 will be billed separately.
. Telephone equipment moves or additions may be expedited for an additional
$800 per day.
. Any services over the noted maximum hours per month will be billed at $80.00
per hour.
II. HIEC System Support - $550 per month
. Includes HIEC's System Support up to 10 hours per month.
. Any services over the noted maximum hours per month will be billed at $55.00
per hour.
III. Client/Server Engineering - $4,000 per month
. Client/Server Engineering up to 120 hours per quarter.
. Any services over the noted maximum hours per quarter will be billed at $150
per hour.
IV. Data Center Operations - $1,200 per month
. Data Center Operations support up to 20 hours per month.
. Any services over the noted maximum hours per month will be billed at $55 per
hour
V. Unix Engineering - $800 per month
. Includes SkyServer depreciation, maintenance, and software maintenance.
. Unix Engineering support up to 24 hours per quarter.
. Any services over the noted maximum hours per quarter will be billed at $150
per hour
VI. Xxxx X'Xxxxxx Consulting
. Includes up to 160 hours (40 hours per week) for the first 4 weeks - $12,800
. Includes up to 80 hours (20 hours per week) for the second 4 weeks - $6,400
. "On call" and any services over the noted maximum hours per month will be
billed at $100 per hour.
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Termination Costs
HIEC's actual cost of removing equipment and disconnecting connections to be
billed at $100 per hour for time spent in such activities.
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