EXHIBIT 10.24
MAY 13 1999
PROTON WORLD INTERNATIONAL S.A.
AND
THE PATHWAYS GROUP, INC.
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PROTON LICENSE AGREEMENT
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CONTENTS
CLAUSE PAGE
1. INTERPRETATION.............................................................2
2. OBJECT OF THE AGREEMENT....................................................6
3. LICENCES...................................................................7
4. DELIVERY AND INSTALLATION OF THE LICENSEE SYSTEM..........................11
5. IMPLEMENTATION OF THE LICENSEE SYSTEM.....................................14
6. PW SERVICES...............................................................15
7. INTELLECTUAL PROPERTY RIGHTS..............................................16
8. OTHER UNDERTAKINGS AND OBLIGATIONS........................................17
9. FINANCIAL TERMS AND CONDITIONS............................................18
10. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION...........................22
11. MISCELLANEOUS PROVISIONS..................................................25
12. TERM AND TERMINATION......................................................28
13. GOVERNING LAW AND DISPUTE RESOLUTION......................................30
Schedule 1 - Reference Functional Specifications (RFS)
Schedule 2 - User Requirements Document (URD)
Schedule 3 - Detailed Functional Specifications (DFS)
Schedule 4 - Equipment and Third Party Equipment
Schedule 5 - Software and Third Party Software
Schedule 6 - Project Plan
Schedule 7 - Fee Payments Schedule
Schedule 8 - Maintenance and Support Services
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Schedule 9 - Documentation
Schedule 10 - Local facilities
Schedule 11 - Main terms of Issuing Sub-License
Schedule 12 - Main terms of New Applications Operating Licence
Schedule 13 - Form of Completion Certificate
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This LICENCE AGREEMENT is entered into on May 13, 1999
BETWEEN
1. PROTON WORLD INTERNATIONAL S.A., a company incorporated under the laws
of Belgium, with its registered office at 0000 Xxxxxxxx, Xxxxxxx, 00
Xxx xx Xxxxxxx ("XX"),
AND
2. The Pathways Group, Inc., an American company incorporated under the
laws of the state of Delaware, with a registered xxxxxx xx Xxxxx Xxxx,
Xxxxxxxxxx XX 00000, XXX, 0000 Xxxxx Xxxxxx Xxxxxx (the "Licensee").
WHEREAS
A. PW has developed and owns a commercial smart card based technology
comprising several applications, including the intersector electronic
purse, the latter known under the name "Proton System".
B. The Licensee intends to launch an electronic purse program in the
United States of America including its territories and wishes in this
respect to issue smart cards and operate a smart card system based on
the Proton technology.
C. PW and the Licensee now wish to define, in this Agreement, the terms
and conditions under which PW shall make the Proton technology
available to the Licensee.
NOW IT HAS BEEN AGREED AS FOLLOWS:
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1. INTERPRETATION
1.1 In this Agreement, save as otherwise provided and unless the context
otherwise requires, the following terms and expressions shall have the
following meaning:
"ACCEPTANCE" means the express or implied acceptance of the System by
the Licensee, and completion of the process set out in Clause 4.3
Acceptance.
"AFFILIATE" means any person or entity controlling, controlled by or
under common control with a party hereto.
"BASIC ADAPTATIONS" means those basic technical adaptations to be made
by PW to the Proton System so as to allow it potentially to be used in
a Licensed Country; the Basic Adaptations include adaptations to the
currency of a Licensed Country, to local language (based on Latin
alphabet), local time and date conventions, power supply, nominal
authorisation, and clearing and settlement interfaces.
"BASIC DFS" means the first version of the DFS, being an adaptation of
the RFS taking into account the Basic Adaptations.
"DETAILED FUNCTIONAL SPECIFICATIONS" or "DFS" means the detailed
technical and functional specifications to be established jointly by PW
and the Licensee; the DFS shall be issued in two successive versions,
being the Basic DFS and the Final DFS, both of which shall, when
available, be attached as Schedule 3 hereto.
"DEFECT" means any failure of the Licensee System that would prevent it
from operating in material conformity with the DFS.
"DOCUMENTATION" means all specifications, documents, manuals, drawings
and other material (other than Equipment and Software) that may be made
available by PW to the Licensee hereunder; the Documentation is
described in Schedule 9.
"EQUIPMENT" means the hardware identified in Schedule 4.A, and which is
to be procured by the Licensee from PW.
"FINAL DFS" means the DFS adapted on the basis of the detailed
technical and operational requirements of the Licensee, as those
requirements are set out in the URD.
"INTELLECTUAL PROPERTY RIGHTS" means patents, trade marks, service
marks, registered designs, trade and business names, know-how,
unregistered trade marks and service marks, copy rights, rights in
designs, inventions, customer lists, trade secrets, computer programs
(including the applicable source code), computer data bases and related
documentation and manuals, rights under licences, consents, orders and
statutes, and rights of the same or similar nature, in any part of the
world, and applications for any of these rights.
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"ISSUING SUB-LICENCE" means a licence granted by the License, in
accordance with Clauses 3.2 USA ISSUING SUB-LICENCE or 3.4 NEW
APPLICATIONS ISSUING SUB-LICENCE, to third parties enabling such third
parties to issue smart cards based on the Proton System.
"PILOT LAUNCH" means the beginning of the pilot phase of the Licensee
System (being, at that gage the Proton System adapted on the basis of
the Basic DFS), such event being deemed to have happened upon
completion of the first successful transaction by a cardholder using
the Licensee System.
"LICENCE" means any licence validly granted to the Licensee hereunder.
"LICENSEE SYSTEM" means the Proton System as adapted, on the basis of
the DFS, to the requirements of the Licensee.
"LICENSED COUNTRY" means any country in respect of which the Licensee
holds a valid Operating Licence.
"MoU" means the memorandum of understanding between the parties dated
May, 6 1999.
"MICRO-CONTROLLER DISPOSABLE CARD" means disposable cards based on the
Proton System.
"NEW APPLICATIONS" means any and all applications other than the Proton
System, marketed by Proton World (including, but not limited to,
loyalty programmes, Internet commerce, JAVA API capabilities and access
control).
"NEW APPLICATIONS ISSUING SUB-LICENCE" means a licence granted by the
Licensee, in accordance with Clause 3.4 NEW APPLICATIONS ISSUING
SUB-LICENCE, to third parties enabling such third parties to issue
smart cards based on the Proton System and intended for New
Applications.
"NEW APPLICATIONS OPERATING LICENCE" means a licence granted to the
Licensee, in accordance with Clause 3.3 NEW APPLICATIONS OPERATING
LICENCE, enabling the Licensee to use the Proton System for New
Applications.
"NEW RELEASE" means any amendment to the Proton System which is
determined by PW as constituting a new generation of the Proton System
or a significant improvement in is performance.
"NEW SYSTEM" means any change to the Proton System that results, in
PW's reasonable opinion, in a fundamental change in the nature,
functionality or applications of the Proton System.
"PROJECT" means the definition, delivery, installation, testing and
implementation of the Licensee System.
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"PROJECT PLAN" means the planning chart setting out the details, timing
and responsibilities for the Project, as set out in Schedule 6. "PROTON
SYSTEM" means the Proton commercial electronic stored value payment
system of PW, whose functionality and specifications are set out in the
RFS.
"REFERENCE FUNCTIONAL SPECIFICATIONS" or "RFS" means the functional and
technical specifications of the Proton System, as set out in Schedule
1.
"RELEASE FEE" means the fee payable by the Licensee in consideration
for a New Release of the Proton System.
"RESTRICTED COUNTRIES" means the countries to which any global licence
granted hereunder will not extend, and where the Licensee shall not be
entitled to use the Licensee System. The Restricted Countries are the
countries in which PW has granted exclusive licenses to parties other
than the Licensee.
"ROLL-OUT LAUNCH" means the wide-scale implementation of the Licensee
System (being, at that stage, the Proton System adapted on the basis of
the Final DFS), such event being deemed to have happened as soon as
1,000 terminals and 15,000 cards are in use in connection with the
Licensee System.
"SECURITY MODULE" means hardware and software relating to the security
of the Proton System and the Licensee System, comprising a Chip Card
Security Module (CSM), Secure Application Module (XXX) or Host Security
Module (HSM) and the related Analysis and Design Documentation (ADD).
"SOFTWARE" means the computer programmes listed in Schedule 5A, the use
of which is useful or necessary in connection with the Licensee System,
and which shall be procured by the Licensee from PW.
"THIRD PARTY EQUIPMENT" means the hardware listed in Schedule 4 B, the
use of which is useful or necessary in connection with the Licensee
System, and which shall be procured by the Licensee from third parties.
"THIRD PARTY SOFTWARE" means the computer programmes listed in Schedule
5 B, the use of which is useful or necessary in connection with the
Licensee System, and which shall be procured by the Licensee from third
parties.
"UPGRADES" means any minor amendment to the Proton System that
constitutes an improvement of its performance but does not amount to a
New Release.
"USER REQUIREMENTS DOCUMENT", or "URD" means the document setting out
the specific functional and operational requirements and constraints of
the Licensee, and which will be taken into account in the development
of the Licensee System; the URD will, when established, be attached as
Schedule 2 hereto.
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"WARRANTY PERIOD" means a period of 6 months from Acceptance.
1.2 In addition, in this Agreement:
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
Belgian public holiday; or a public holiday in the United States of
America, including the states of California and Washington.
"CONTROL" shall, in respect of a legal entity, mean the ability, de
facto or de jure, to exercise a decisive influence on the appointment
of a majority of its directors or on its management; and
any references to the "ISSUE OF SMART CARDS" shall be deemed to refer
also to the enabling and activation of New Applications on existing
Proton-compatible smart cards.
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2. OBJECT OF THE AGREEMENT
2.1 Subject to the terms and conditions of this Agreement, PW agrees to (a)
grant to the Licensee certain rights to use its technology, pursuant to
the licences referred to in Clause 3., (b) provide Equipment and
Software to the Licensee, and (c) provide certain services to the
Licensee in relation to the foregoing.
2.2 Such rights, products and services are provided by PW so that die
Licensee System may be used by the Licensee in an electronic purse
programme. The delivery, installation, testing and launch of such
programme shall be made in accordance with the Project Plan and with
the provisions of Clause 4.
2.3 In consideration for the rights, products and services granted and
provided by PW, the Licensee shall pay the fees and expenses set out in
Clause 8.
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3. LICENCES
3.1 USA OPERATING LICENCE
3.1.1 GRANT OF USA OPERATING LICENCE
PW hereby grants to the Licensee a non-exclusive, non-transferable
Licence to use the Licensee System in the United States of America
including its territories, subject to the terms and conditions set out
in Clause 3.1.2 TERMS AND CONDITIONS OF USA OPERATING LICENCE.
3.1.2 TERMS AND CONDITIONS OF USA OPERATING LICENCE
(a) FUNCTIONAL SCOPE. The USA Operating Licence entitles the
Licensee to use the Licensee System in connection with the
Proton System, to the exclusion of any other New Applications.
(b) CARD ISSUANCE. The USA Operating Licence also entitles the
Licensee to either (i) issue smart cards that are compatible
with the Licensee System and are intended for electronic purse
applications, or (ii) to grant to third parties the right to
issue such smart cards pursuant to the terms of an Issuing
Sub-Licence entered into in accordance with Clause 3.2 USA
ISSUING SUB-LICENCE or, as the case may be, Clause 3.4 NEW
APPLICATIONS ISSUING SUB-LICENCE., 3.5 ADDITIONAL OPERATING
LICENCES or 3.6.3 The Global Licence shall also entitle the
Licensee to grant Issuing Sub-Licences in respect of all
countries except the Restricted Countries. Such additional
Issuing SubLicences shall (a) be governed by the terms of an
Issuing Sub-Licence agreement to be entered into between the
Licensee and the relevant third party, and (b) each give rise
to payments of the fees determined, mutatis mutandis as set
out in Clause 9.1.4 USA ISSUING SUB-LICENCE FEE. Each Issuing
SubLicence shall be consistent with the requirements set out
in Schedule 11, and shall be reviewed and approved by PW prior
to its execution.
(c) GEOGRAPHICAL SCOPE. The Licensee shall be entitled to use the
Licensee System only in the United States of America including
its territories, and the Licensee may not use, develop, sell
or operate the Licensee System or any products or services
based thereon in any other country.
(d) NO EXCLUSIVITY. The USA Operating Licence is granted to the
Licensee on a non-exclusive basis and shall not prevent third
parties to (or prevent PW to allow third parties to) use,
develop, sell or operate products or services based on the
Proton System in the USA including its territories.
(e) USE AND ACCESS. The Licensee shall, pursuant to the USA
Operating Licensee, be entitled to:
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(i) receive and use, for its own purposes, the RFS and
Final DFS in respect of the Licensee System;
(ii) receive and use the application-related object code
software for the central host platform of the
Licensee System;
(iii) use and operate the Licensee System on a single
platform, to the exclusion of any other platform; the
Licensee may make back-up copies of the Licensee
System and may operate the Licensee System on a
redundant system utilising mirroring techniques,
solely in the event of a failure of the primary
system, but may not make copies that run on platforms
other than the aforementioned single platform.
(iv) purchase smart cards from third party vendors that
have been licensed and certified by PW;
(v) purchase terminals from third party vendors that have
been licensed and certified by PW;
(vi) purchase security devices (HSM for the central host
platform and CSM for the terminals) from PW; and
(vii) procure related services, such as card
personalisation, from third party vendors that have
been licensed and certified by PW.
(f) IMPROVEMENTS. The Licensee shall, under the USA Operating
Licence, be entitled to receive technological improvements of
the System, subject to the following:
(i) Upgrades shall be provided by PW to the Licensee free
of charge, PROVIDED THAT all services provided by PW
for the installation, implementation and training in
respect of any Upgrade shall be paid for by the
Licensee on the basis set out in Clause 9.2.3 OTHER
SERVICES;
(ii) New Releases shall be provided against payment of the
Release Fee and, as the case may be fees and expenses
of related services, calculated in accordance with
Clause 9.2.3 OTHER SERVICES;
(iii) New Systems shall not be available under the USA
Operating Licence, but may be provided to the
Licensee pursuant to a separate licence, the terms of
which shall be negotiated in good faith on a
case-by-case basis.
3.2 USA ISSUING SUB-LICENCE
3.2.1 The Licensee shall have the option, exercisable by written notice to
PW, to grant to third parties the right to issue smart cards compatible
with the Licensee System and intended for
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electronic purse applications. For the purposes of this Agreement, any
references to the "issue of smart cards" shall be deemed to refer also
to the enabling and activation of new applications on existing
Proton-compatible smart cards
3.2.2 The grant of each such right to third parties shall (a) be governed by
the terms of an Issuing Sub-Licence agreement to be entered into
between the Licensee and the relevant third party, and (b) in each case
give rise to payments of the fees referred to in Clause 9.1.4 USA
ISSUING SUB-LICENCE FEE. Each Issuing Sub-Licence shall be consistent
with the requirements set out in Schedule 11, and shall be reviewed and
approved by PW prior to its execution.
3.2.3 A third party is considered as a Sub-Licensee in case at least one of
the following conditions has been met:
(i) the third party maintains and uses its own
pre-personalisation key
(ii) the third party uses a specific issuer id
(iii) the third party manages its own float account
(iv) the third party is liable for any financial risk
associated to card usage by the card holders.
3.3 NEW APPLICATIONS OPERATING LICENCE
The Licensee shall have the option, exercisable by written notice to
PW, to purchase from PW the right to use the Licensee System in the USA
including its territories in connection with New Applications. Such
right shall be conditional upon agreement on the terms and conditions
of a New Applications Operating Licence agreement, substantially in the
form of Schedule 12 hereto.
3.4 NEW APPLICATIONS ISSUING SUB-LICENCE
3.4.1 In the event that the Licensee holds a valid New Applications Operating
Licence, it shall have the right either to issue smart cards or to
grant to third parties the right to issue smart cards intended for use
in connection with New Applications.
3.4.2 The grant of each such right to third parties shall (a) be governed by
the terms of a New Applications Issuing Sub-Licence agreement to be
entered into between the Licensee and the relevant third party, and (b)
in each case give rise to payments of the fees referred to in Clause
9.1.5 NEW APPLICATIONS LICENSE FEES AND NEW APPLICATIONS ISSUING
SUB-LICENCE. Each Issuing Sub-Licence shall be consistent with the
requirements set out in Schedule 11, and shall be reviewed and approved
by PW prior to its execution.
3.5 ADDITIONAL OPERATING LICENCES
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The Licensee shall have the option, exercisable by written notice to
PW, to acquire additional operating licences (the "ADDITIONAL OPERATING
LICENCES") in respect of one or more additional countries, which are
not Restricted Countries. Each of the Additional Operating Licences
shall be governed mutatis mutandis by the provisions of Clause 3.1 USA
OPERATING LICENCE above, and shall be subject to payment of an
Additional Operating Licence Fee as set out in Clause
9.1.6 ADDITIONAL OPERATING LICENCE FEES.
Clauses 3.2 USA ISSUING SUB-LICENCE, 3.3 NEW APPLICATIONS OPERATING
LICENCE and 3.4 NEW APPLICATIONS ISSUING SUB-LICENCE shall apply
MUTATIS MUTANDIS in respect of each country other than the USA
including its territories for which an Additional Operating Licence is
validly granted.
3.6 GLOBAL LICENCE
3.6.1 The Licensee shall have the option, exercisable by written notice to
PW, to purchase from PW an extension of the geographical scope of the
USA Operating Licence from a national basis to a global basis (the
"GLOBAL LICENCE"), PROVIDED HOWEVER THAT the Global Licence shall not
extend to any of the Restricted Countries. Such Global Licence shall be
governed mutatis mutandis by Clause 3.1.2 TERMS AND CONDITIONS OF USA
OPERATING LICENCE (but for sub-paragraph (c) GEOGRAPHICAL SCOPE. The
Licensee shall be entitled to use the Licensee System only in the
United States of America including its territories, and the Licensee
may not use, develop, sell or operate the Licensee System or any
products or services based thereon in any other country thereof), and
shall save in the circumstances referred to in Clause 3.6.2 A Global
Licence shall be deemed granted to the Licensee in the event that the
Licensee shall have acquired, in addition to the USA Operating Licence,
four (4) Additional Operating Licences and shall have paid all relevant
fees in respect thereof, be subject to payment of the fees set out in
Clause 9.1.7 GLOBAL LICENCE.
3.6.2 A Global Licence shall be deemed granted to the Licensee in the event
that the Licensee shall have acquired, in addition to the USA Operating
Licence, four (4) Additional Operating Licences and shall have paid all
relevant fees in respect thereof.
3.6.3 The Global Licence shall also entitle the Licensee to grant Issuing
Sub-Licences in respect of all countries except the Restricted
Countries. Such additional Issuing SubLicences shall (a) be governed by
the terms of an Issuing Sub-Licence agreement to be entered into
between the Licensee and the relevant third party, and (b) each give
rise to payments of the fees determined, mutatis mutandis as set out in
Clause 9.1.4 USA ISSUING SUB-LICENCE FEE. Each Issuing Sub-Licence
shall be consistent with the requirements set out in Schedule 11, and
shall be reviewed and approved by PW prior to its execution.
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4. DELIVERY AND INSTALLATION OF THE LICENSEE SYSTEM
4.1 CO-OPERATION IN RELATION TO DELIVERY AND INSTALLATION
4.1.1 CO-OPERATION
The parties agree to co-operate in good faith and to provide each other
with all support and assistance as may be required with a view to
completing the Project in accordance with the provisions of the Project
Plan.
4.1.2 PROJECT COMMITTEE
The parties shall forthwith upon execution of this Agreement establish
a committee (the "PROJECT COMMITTEE") comprised of one project manager
per party, each assigned with one (a more assistant as appropriate. The
initial project managers shall be Mr. Ludo Janssens for PW and Xx. Xxx
Xxxxxx for the Licensee.
The Project Committee shall have general responsibility for the
supervision and monitoring of the Project, and in particular for
assessing conformity of the progress of the Project with the Project
Plan.
If any party reasonably believes that the Project Manager appointed by
the other party is not able to successfully lead that other party's
efforts to comply with the Project Plan, the party may request the
replacement of such Project Manager.
4.1.3 FACILITIES
The Licensee hereby undertakes to make available to PW at no cost all
such equipment and facilities as may be reasonably required by PW for
the purposes of performing its obligations under this Agreement. The
Licensee undertakes in particular (a) to make available to the PW
Project Manager and any other PW representatives that may be providing
services on the Licensee's premises suitable office space equipped with
office automation and telecommunications equipment as described in
Schedule 10, (b) make available to PW all facilities and equipment
required for the purposes of installing, operating and testing the
Licensee Equipment during the Project, and (c) install at its premises,
at its costs and expenses, all other equipment referred to in Schedule
10, including an X.25 connection with PW or a connection with equal or
better security, approved by both parties.
4.2 DELIVERY AND INSTALLATION
The delivery and installation of the Licensee System shall be effected
in accordance with the provisions of the Project Plan.
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4.3 ACCEPTANCE
4.3.1 COMPLETION CERTIFICATE
Upon completion, to PW's satisfaction, of the installation process as
described in the Project Plan, PW shall perform a test (the "COMPLIANCE
TEST") for the purpose of verifying that the Licensee System, and any
related Equipment and Software, conforms the Final DFS in all material
respects. If the Compliance Test reveals any Defects, PW shall use all
best endeavours to remedy such Defects as soon as possible; if the
Compliance Test is satisfactory, PW shall confirm the complete and
satisfactory installation of the Licensee System by written notice to
the Licensee (the "COMPLETION CERTIFICATE"), substantially in the form
of Schedule 13 hereto.
4.3.2 OPERATING TESTS
After issuance of the Completion Certificate, the Licensee may during a
period of 30 calendar days (the "OPERATING TEST PERIOD") perform all
such tests as it shall deem appropriate for the purposes of assessing
compliance of the Licensee Equipment with the Final DFS under real
operating conditions. Within 10 Business Days from the end of the
Operating Test Period, the Licensee shall either (a) notify PW in
writing of the existence of a Defect, in which case PW shall use all
best endeavours to remedy such defects and, when resolved, shall issue
a new Completion Certificate, or (b) express its full and final
Acceptance of the Licensee System by returning to PW a copy of the
Completion Certificate, countersigned by the Licensee.
Irrevocable and unconditional Acceptance shall be deemed to have
occurred, and the Licensee System shall be deemed accepted without
qualifications or reservations, on the date that is 10 Business Days
after the end of the Operating Test Period, unless the Licensee has,
prior to such date, notified PW in writing of the existence of a
Defect.
4.4 SHIPMENTS AND PHYSICAL DELIVERIES
4.4.1 SHIPMENTS
In the event that any components of the Proton System, the Licensee
System or the Equipment are to be delivered to the Licensee in the
United States of America including its territories, such delivery shall
be effected by a carrier (the "Carrier") jointly chosen by the parties.
4.4.2 COST OF DELIVERIES
The costs and expenses of any such shipments shall be borne as follows:
(a) PW shall bear the cost of shipment of any training materials
and documentation referred to in Schedule 9, and of any
Software Updates;
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(b) The Licensee shall bear the cost of shipment of any other
items to be delivered pursuant to this Agreement.
4.4.3 TRANSFER OF RISKS
The Licensee shall be solely liable for any loss or damage to any
components of the Proton System, the Licensee System or the Equipment
as from their delivery by PW to the Carrier.
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5. IMPLEMENTATION OF THE LICENSEE SYSTEM
5.1 LAUNCH
The Licensee shall use all best efforts to ensure that (a) the Pilot
Launch of the licensee System occurs within 12 months of the execution
of this Agreement, and (b) the Roll-Out Launch of the Licensee System
occurs within 12 months of the occurrence of the Pilot Launch.
5.2 PROMOTION
The licensee shall use all best efforts to market, promote and
establish the Proton System (as implemented in the Licensee System) as
a leading electronic purse system in the retail banking,
telecommunications, transportation, EBT and prepaid medical sector in
the United States of America including its territories.
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6. PW SERVICES
6.1 MAINTENANCE SERVICES
PW shall, upon request from the Licensee, provide maintenance services,
as described in Schedule 8, part A. In consideration for the provision
of maintenance services, the Licensee shall pay the fees and expenses
set out in Clause 9.2.1 MAINTENANCE.
6.2 SUPPORT SERVICES
PW shall, upon request from the Licensee, provide support services, as
described in Schedule 8, part B. In consideration for the provision of
support services, the Licensee shall pay the fees and expenses set out
in Clause 9.2.2 SUPPORT.
6.3 OTHER SERVICES
PW may if so requested by the Licensee provide services other than
those referred to in Clauses 6.1 MAINTENANCE SERVICES
PW shall, upon request from the Licensee, provide maintenance services,
as described in Schedule 8, part A. In consideration for the provision
of maintenance services, the Licensee shall pay the fees and expenses
set out in Clause 9.2.1 MAINTENANCE.
6.2 SUPPORT SERVICES and 6.1 MAINTENANCE SERVICES above, against
payment of the fees and expenses set out in Clause 9.2.3 OTHER
SERVICES.
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7. INTELLECTUAL PROPERTY RIGHTS
7.1 OWNERSHIP OF SYSTEM AND RELATED MATERIALS
The Proton System, and any and all elements thereof included in the
Licensee System, as well as any other information, documentation,
software or other material in whatever form provided or made available
by PW to the Licensee hereunder shall remain the sole ownership of PW.
Any and all Intellectual Property Rights in respect of the foregoing
shall remain the sole ownership of PW. The Licensee shall acquire no
rights in respect of the foregoing other than as expressly provided in
this Agreement.
7.2 USE OF SYSTEM
The licensee shall only use the Licensee System in the manner and for
the purposes provided in this Agreement, and shall not reproduce any
part of the Licensee System otherwise than as expressly provided in
this Agreement. The Licensee shall not use the Licensee System in
conjunction with any hardware or software other than those expressly
approved by PW, which approval will not be unreasonably withheld.
7.3 VIOLATIONS
The Licensee shall notify PW immediately if it becomes aware of any
unauthorised use of the Licensee System or any part thereof or any of
the Intellectual property Rights relating thereto, and shall assist PW,
at PW's expense, in taking all steps to defend and protect PW's rights
therein.
7.4 IMPROVEMENTS
In the event that the Licensee would make improvements or additions to
the Proton System, the Licensee shall grant to PW a non-exclusive,
non-transferable, royalty-free licence in respect of such improvements
or additions, such licence being valid for the duration of this
Agreement.
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8. OTHER UNDERTAKINGS AND OBLIGATIONS
8.1 OBLIGATIONS AND UNDERTAKINGS OF THE LICENSEE
8.1.1 EXISTING EXCLUSIVITIES
The Licensee declares that it is aware that rights to use the Proton
System have been granted to third parties on an exclusive basis in the
Restricted Countries, and undertakes to refrain from using or
authorising the use of the Licensee System in any of the Restricted
Countries. The Licensee also acknowledges and accepts that certain
third parties have been granted non-exclusive rights to use the Proton
System on a global basis.
8.1.2 ACCESS TO INFORMATION
The Licensee undertakes to provide upon first demand by PW any
information which PW may reasonably require for the purposes of
assessing the due compliance by the Licensee with its obligations
hereunder and of determining the amounts payable by the Licensee
pursuant to Clause 9. Financial terms and conditions. The Licensee
shall, if so requested by PW, allow an independent auditor to audit all
relevant financial and accounting data, including the amounts of stored
value cards acquired from third parties. The Licensee shall fully
cooperate with such auditor and make available to it all books, records
and other information as may be relevant for the purposes of the audit.
The conclusion of the audit shall be binding on the parties, and any
adjustment to the fees payable arising from the audit shall be paid
forthwith. The costs and expenses of the audit shall be shared equally
between the parties, unless the results of the audit reveal a
discrepancy of 5 % or more with data previously supplied by the
Licensee, in which case the costs and expenses of the audit shall be
borne in full by the Licensee.
8.1.3 TECHNICAL OBLIGATIONS
The Licensee shall adhere to the Minimal Security Requirements set
forth in Schedule 14.
8.1.4 INSURANCE
The Licensee shall take out and maintain, with an insurance company of
prime repute, adequate coverage against any and all risks relating to
(a) the operation of the Licensee System and (b) the shipment and
delivery of components of the Licensee System, the equipment or the
Software. In respect of the latter risks, the Licensee shall procure
that PW be named in the relevant policies as a named insured party, and
that both PW and the Licensee be named as loss payees.
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9. FINANCIAL TERMS AND CONDITIONS
9.1 LICENCE FEES
9.1.1 INITIAL LICENCE FEES
FEE ADVANCE. PW hereby acknowledges receipt of a fee advance (the "FEE
ADVANCE") in the amount of USD 30,000 paid by the Licensee pursuant to
the MoU on account of the USA Operating Licence Fee.
9.1.2 USA OPERATING LICENCE FEE
In consideration for the Country Operating Licence, the Licensee shall
pay a fee (the "USA OPERATING LICENCE FEE") in an amount equal to USD
955,000 less the Fee Advance, corresponding to a card volume of up to
2,500,000 cards. The Licensee will give 90 days advance notice of an
anticipated increase in card volume, which will result in an additional
fee due in accordance with the schedule set forth below:
First additional 2,500,000 cards: additional fee of USD 540,000
Next additional 5,000,000 cards: additional fee of USD 460,000
Next additional 90,000,000 cards: additional fee of USD 1,500,000
Additional cards over 100,000,000: additional fee of USD 6,500,000
The USD 1,000,000 Operating License Fee is to be paid as follows:
30% within 30 days after signature of the License Agreement
(less the Fee Advance).
30% within 30 days after the Pilot Launch.
20% within 30 days after the Roll-out Launch.
The remaining 20% at Acceptance of the Roll-out Launch.
9.1.3 FEES PER CARD
(a) NDC FEE. The Licensee shall pay a fee per card in respect of
all nondisposable cards (the "NDC FEE") based on the Proton
System which are issued either by the Licensee or by third
parties pursuant to an Issuing SubLicence and procured by the
Licensee from sources other than PW but certified by PW. The
amount of the NDC Fee shall be based on the number of cards so
issued, as follows:
(i) From 0 to 3,000,000 cards: USD 0.33 per card;
(ii) From 3,000,001 to 10,000,000 cards: USD 0.30 per
card;
(iii) From 10,000,001 to 15,000,000 cards: USD 0.27 per
card; and
(iv) Above 15,000,001 cards: USD 0.25 per card.
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(b) MCDC FEE. The Licensee shall, in respect of Micro Controller
Disposable Cards based on the Proton System which are issued
pursuant to a Issuing Sub Licence and procured by the Licensee
from sources other than PW but certified by PW, pay a fee (the
"MCDC FEE") per card in the amount of USD 0.10.
(c) For the avoidance of doubt, in the event that the Licensee
would agree with a Sub-Issuer on fees per card higher than
those set out above, PW shall only be entitled to the NDC Fees
set out above, and the positive difference between such
minimum fees and the fees actually collected shall remain with
the licensee.
9.1.4 USA ISSUING SUB-LICENCE FEE
In consideration for the right to grant USA Issuing Sub-Licences, the
Licensee shall, in addition to the fees referred to in Clause 9.1.3
FEES PER CARD pay a fee (the "USA ISSUING SUB-LICENCE FEE") equal to
(a) 1,500,000 USD for each Issuing Sub-Licence granted to a
Co-Issuer with 6,000,000 or more accounts or customers;
(b) 1,250,000 USD for each Issuing Sub-Licence granted to a
Co-Issuer with 4,000,000 or more but less than 6,000,000
accounts or customers;
(c) 1,000,000 USD for each Issuing Sub-Licence granted to a
Co-Issuer with 3,000,000 or more but less than 4,000,000
accounts or customers;
(d) 750,000 USD for each Issuing Sub-Licence granted to a
Co-Issuer with 2,000,000 or more but less than 3,000,000
accounts or customers; and
(e) 500,000 USD for each Issuing Sub-Licence granted to a
Co-Issuer with less than 2,000,000 accounts or customers.
9.1.5 NEW APPLICATIONS LICENSE FEES AND NEW APPLICATIONS ISSUING SUB-LICENCE
FEES
The fees payable in respect of any New Applications Licenses and/or New
Applications Issuing Sub-Licenses shall be determined on a case-by-case
basis by mutual agreement between PW and the Licensee.
9.1.6 ADDITIONAL OPERATING LICENCE FEES
In consideration for each Additional Operating Licence, the Licensee
shall pay a fee (the "ADDITIONAL OPERATING LICENCE FEE") in the amount
of USD 2,000,000.
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9.1.7 GLOBAL LICENCE FEES
(a) GLOBAL LICENCE FEE. The extension of the geographical scope of
the operating Licence in the manner provided in Clause 3.6
GLOBAL LICENCE, shall be subject to payment of a fee (the
"GLOBAL LICENCE FEE") in an amount equal to (a) USD
10,000,000, less (b) the amount of the USA Operating Licence
Fee and of any Additional Operating Licence Fees.
(b) NDC FEES. In the event that the Licensee acquires a Global
Licence (whether pursuant to Clause 3 A.1 The Licensee shall
have the option, exercisable by written notice to PW, to
purchase from PW an extension of the geographical scope of the
USA Operating Licence from a national basis to a global basis
(the "GLOBAL LICENCE"), PROVIDED HOWEVER THAT the Global
Licence shall not extend to any of the Restricted Countries or
to Clause 3.6.2 A Global Licence shall be deemed granted to
the Licensee in the event that the Licensee shall have
acquired, in addition to the USA Operating Licence, four (4)
Additional Operating Licences and shall have paid all relevant
fees in respect thereof., the amount of the NDC Fees payable
to PW shall automatically be reduced to USD 0.25 per card.
(c) MCDC FEES. The MCDC Fees as set out in Clause (b) MCDC FEE
shall not be amended as a result of the Licensee acquiring a
Global Licence.
9.2 SERVICES
9.2.1 MAINTENANCE
In consideration for the card fee as set out in Clause 9.1.3, the
Licensee will automatically receive all Upgrades of the Reference
Functional Specifications.
Subject to the execution of a separate Maintenance Contract between the
parties, prior to the expiration of the Warranty Period, PW shall
provide Maintenance Services to the Licensee as described in Schedule
8B. The annual maintenance fee for such services shall be fifteen
percent (15 %) of the total Operating License Fee and shall be payable,
annually and anticipatively, commencing at the end of the Warranty
Period, or as mutually agreed in writing by the parties. The
maintenance fees under the maintenance contract may be revised after
three (3) years upon mutual agreement of the parties.
9.2.2 SUPPORT
In consideration for support services to be provided by PW pursuant to
Clause 6.2 SUPPORT SERVICES, the Licensee shall pay (a) fees equal to
1,400 USD multiplied by the relevant number of man-days, and (b) all
reasonable costs and expenses incurred by PW in the provision of such
support services, including but not limited to fees of sub-contractors
or third party suppliers of PW and out-of-pocket expenses such as
travel and accommodation, which may be incurred by PW or its
representatives in the provision of such services.
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9.2.3 OTHER SERVICES
In consideration for any services (including installation services) in
addition to the maintenance services and the support services, the
Licensee shall pay PW (a) fees equal to (i) 1,400 USD multiplied by the
number of man-days, if the services are provided within 12 months from
the date hereof and (ii) such other amount per man-days as PW shall
reasonably determine, if the services are provided thereafter, and (b)
all reasonable costs including as die case may be fees of
sub-contractors or third-party suppliers of PW) and out-of pocket
expenses such as travel and accommodation which may be incurred by PW
or its representatives in connection with the provision of such
services.
9.2.4 FREE SERVICES
Notwithstanding the above, the first 10 man days of service provided by
PW pursuant to this Agreement shall be provided free of charge.
9.3 PAYMENTS
9.3.1 INVOICES. All amounts payable to PW shall be invoiced by PW at the
relevant time, as specified in the payments schedule set out in
Schedule 7.
9.3.2 PAYMENTS. All invoices issued by PW shall be paid within 30 days from
the date of their issuance, by wire transfer to the account specified
on the invoice.
9.3.3 LATE PAYMENT INTEREST. Any amounts unpaid on their relevant due date
shall bear interest as of right and without notice at a rate of 10% per
annum from the due date until the effective date of full payment.
9.3.4 TAXES. All payments to be made by the Licensee hereunder shall be made
free and clear of and without deduction on account of tax unless such
deduction shall be required by applicable law, in which case the sum
payable by the Licensee shall be increased to the extent necessary to
ensure that after the making of the required deduction, PW receives and
retains a net sum equal to the sum which it would have received and
retained had no such deduction been required.
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10. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
10.1 REPRESENTATIONS AND WARRANTIES BY PW
10.1.1 REPRESENTATIONS AND WARRANTIES
PW represents and warrants to the Licensee as follows:
(a) GOOD STANDING; NO VIOLATION. PW is a SOCIETE ANONYME duly
incorporated and in existence under the laws of Belgium. The
entry by PW into this Agreement shall not result in any breach
of any law, regulation or contract by which PAW is bound.
(b) OWNERSHIP. PW owns or is otherwise entitled to license the
Licensee System to the Licensee in the manner set out in this
Agreement. To the best of PW's knowledge, the use of the
Licensee System by the Licensee shall, provided that the
Licensee complies with all its obligations hereunder, not
infringe the Intellectual Property Rights of any third
parties.
(c) CONFORMITY TO SPECIFICATIONS. On the date hereof, the Proton
System is conform in all material respects to the
specifications and functionality set out in the RFS, and the
Licensee System is conform in all material respects to the
specifications and functionality set out in the DFS.
(d) OPERATION. The Licensee System will operate in material
conformity to the DFS.
10.1.2 THE LICENSEE'S REMEDIES
The Licensee's remedies for any breach of the warranties set out in
Clause 10.1.1 REPRESENTATIONS AND WARRANTIES shall be subject to the
following terms and conditions:
(a) IN RESPECT OF THE WARRANTY SET OUT IN CLAUSE (B) OWNERSHIP. PW
owns or is otherwise entitled to license the Licensee System
to the Licensee in the manner set out in this Agreement. To
the best of PW's knowledge, the use of the Licensee System by
the Licensee shall, provided that the Licensee complies with
all its obligations hereunder, not infringe the Intellectual
Property Rights of any third parties (ownership), the
Licensee's remedies shall be subject to the following:
(i) The Licensee shall notify PW as soon as it shall
become aware of any infringement claim by any third
party (an "IP Claim");
(ii) The Licensee shall allow PW to conduct, at its
expense, the defence against any such IP Claim;
(iii) Subject to compliance by Licensee with sub-paragraphs
(i) and (ii) above, PW shall indemnify the Licensee
against any direct damages/liability which
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may be awarded against it, by an enforceable court
decision or arbitration award, as a result of the
Licensee System being held to infringe the
Intellectual Property Rights of a THIRD PARTY,
provided that the obligation of PW to indemnify the
Licensee pursuant to this sub-paragraph shall be
subject to a maximum amount which will be negotiated
and set forth in a separate addendum within six
months of the date of this License Agreement. The
parties agree that PW may not settle any such damage
claim without the consent of the Licensee, which
consent will not be unreasonably be withheld.
(iv) In the event that an IP Claim would result in the use
of all or part of the Licensee System being held
illegal in any relevant territory, PW undertakes
either (i) to obtain the right to use the Licensee
System in the relevant territory, or (ii) to amend
the Licensee System or replace any counterfeiting
components of the Licensee System so as to allow it
to be lawfully used in the relevant territory.
(v) Any liability of PW pursuant to this Clause 10.1.2
THE LICENSEE'S REMEDIES(a) In respect of the warranty
set out in Clause (b) OWNERSHIP. PW owns or is
otherwise entitled to license the Licensee System to
the Licensee in the manner set out in this Agreement.
To the best of PW's knowledge, the use of the
Licensee System by the Licensee shall, provided that
the Licensee complies with all its obligations
hereunder, not infringe the Intellectual Property
Rights of any third parties (OWNERSHIP), the
Licensee's remedies shall be subject to the
following: is expressly excluded if the IP Claim
results or is related directly or indirectly to usage
of the Licensee System by the Licensee in a manner
not consistent with the terms of this Agreement.
(b) In respect of all other warranties set out in Clause 10.1.1
REPRESENTATIONS AND WARRANTIES.
(i) PW expressly disclaims any liability for any Defects
which result directly or indirectly from either (x)
additions or amendments, by the Licensee, to the
Licensee System (unless such additions or amendments
have been expressly authorised by PW in writing), (y)
any usage of the Licensee System by the Licensee in a
manner not consistent with the terms of this
Agreement, or (z) any unauthorised use of the
Licensee System in conjunction with hardware or
software not provided by PW or authorised by it in
writing;
(ii) PW's obligations under the warranties shall be
subject to compliance by the Licensee with any and
all reasonable instructions issued from time to time
by PW to the Licensee in writing;
(iii) The Licensee's sole remedy in respect of a breach of
warranties shall be to request PW to replace or
repair (at PW's option) the component of the Licensee
System or the Equipment which has caused the breach
of the
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relevant warranty; Any such replacement shall first
be attempted remotely, via customary communication
links (in respect of Equipment malfunctions) or via
the network connection between PW and the Licensee
(in respect of Software); in the event that such
attempts fail to remedy the Defect, then PW shall at
its own costs send suitable personnel to the
Licensee's premises;
(iv) PW's obligations under the warranties shall expire at
the end of the Warranty Period. Any support or repair
services after such period shall be provided by PW
against payment of the fees set out in Clause 9.2.3
OTHER SERVICES.
10.1.3 OTHER LIABILITIES OF PW
PW expressly disclaims any liability to the Licensee other than as
expressly provided in Clause 10.1 REPRESENTATIONS AND WARRANTIES BY PW.
For the avoidance of doubt, PW (a) gives no representations and
warranties other than those expressly set out above, and (b) shall not
be liable for any indirect or consequential losses or damages incurred
by the Licensee in relation to the Licensee System.
10.2 REPRESENTATIONS AND WARRANTIES BY THE LICENSEE
The Licensee represents and warrants to PW that
(a) GOOD STANDING; NO VIOLATION. It is a limited liability company
duly incorporated and in existence under the laws of the
United States of America and its territories. The entry by the
Licensee into this Agreement and the performance of its
obligations hereunder shall not result in any breach of any
law, regulation or contract by which it is bound.
(b) RESOURCES. The Licensee has the necessary commercial,
financial, technical and human resources to successfully
operate an electronic purse programme in the United States of
America and its territories.
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11. MISCELLANEOUS PROVISIONS
11.1 CONFIDENTIALITY
11.1.1 For the purposes of this Agreement, "CONFIDENTIAL INFORMATION" means
any and all information of a confidential nature (including but not
limited to technical, commercial and financial data, know-how, software
and designs) disclosed or made available (whether in writing, in
electronic fomat, verbally or by any other means and whether directly
or indirectly) by one party to any other party (the "RECEIVING PARTY")
whether before or after the date of this Agreement.
11.1.2 Each party acknowledges that it may have or be given access to
Confidential Information of or regarding the other party. During the
term of this Agreement and for a period of 5 years after termination or
expiration of this Agreement for any reason whatsoever the Receiving
Party shall:
(a) keep the Confidential Information confidential;
(b) not disclose the Confidential Information to any other person
other than its employees, agents and advisors (in each case on
a need to know basis and subject to obtaining, where
reasonably practicable, adequate confidentiality undertakings
from such persons) without the prior written consent of the
other party; and
(c) not use the Confidential Information for any purpose other
than for the performance of this Agreement.
11.1.3 The obligations contained in Clauses 11.1.2 Each party acknowledges
that it may have or be given access to Confidential Information of or
regarding the other party. During the term of this Agreement and for a
period of 5 years after termination or expiration of this Agreement for
any reason whatsoever the Receiving Party shall: and 11.1.1 For the
purposes of this Agreement, "CONFIDENTIAL INFORMATION" means any and
all information of a confidential nature (including but not limited to
technical, commercial and financial data, know-how, software and
designs) disclosed or made available (whether in writing, in electronic
format, verbally or by any other means and whether directly or
indirectly) by one party to any other party (the "RECEIVING PARTY")
whether before or after the date of this Agreement shall not apply to
any Confidential Information which:
(a) is at the date of this Agreement or at any time after the date
of this Agreement comes into the public domain other than
through breach of this Agreement by the Receiving Party;
(b) can be shown by the Receiving Party to the reasonable
satisfaction of the other party to have been known to the
Receiving Party prior to it being disclosed by the other party
to the Receiving Party or to have been independently developed
or obtained by such party without making use of Confidential
Information of the Company; or
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(c) subsequently comes lawfully into the possession of the
Receiving Party from a third party.
11.1.4 The terms of this Agreement (including its Schedules) are confidential
and may not be disclosed to any third party except where such
disclosure is required by law or judicial order, PROVIDED in such case
that the party required to make the disclosure shall notify the other
party as soon as possible and, where possible in the circumstances,
prior to making the disclosure.
11.2 ANNOUNCEMENTS
11.2.1 Subject to Clause 11.2.2 Where the announcement, communication or
circular is required by law or a regulation of a stock exchange, the
party required to make it must if practicable first consult with, and
take into account the reasonable requirements of, the other party, no
public announcement, communication or circular concerning the
transaction referred to in this Agreement may be made at any time
(before or after Completion) by any party hereto without having first
obtained the written consent of the other party who shall not
unreasonably refuse, withhold or delay such consent. A party shall be
deemed to have granted such consent if it fails to reply to a request
for consent within two business days from the receipt of the notice.
11.2.2 Where the announcement, communication or circular is required by law or
a regulation of a stock exchange, the party required to make it must if
practicable first consult with, and take into account the reasonable
requirements of, the other party.
11.3 SEVERABILITY
The invalidity or unenforceability of any provision hereof shall not
affect the validity or enforceability of this Agreement or of any other
provision hereof. The provision held to be invalid and/or unenforceable
shall orgy be ineffective to the extent of such unenforceability or
invalidity.
11.4 COSTS
Except where this Agreement provides otherwise, each party hereto shall
pay its own costs relating to the negotiation, preparation and
execution and implementation by it of this Agreement and of all other
documents referred to herein.
11.5 NOTICES
All notices to be made in writing under this Agreement shall be given
in the English language by registered mail, express courier service or
telefax (confirmed by registered mail or express courier service) to
the following addresses or such other addresses as the parties may have
designated to each other by notice given in accordance with this
Clause:
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(a) PW, to Proton World International S.A., Xxx xx Xxxxxxx 00,
0000 Xxxxxxxx, Xxxxxxx, for the attention of Messrs. Xxxxxx
Xxxxxxx and Xxxxxx Xxxxx, telefax number x00 0000 00 00;
(b) The Licensee, to , The Pathways Group, Inc., 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, for the attention of Xx.
Xxxxx X. Xxxx XX and Mr. Xxxxxx Xxxxxx, telefax number +
1-707-546.4041.
11.6 OTHER AGREEMENTS - AMENDMENTS
This Agreement supersedes and replaces any and all prior negotiations,
arrangements and understandings, whether or not in writing, between the
parties with respect to the subject matter of the Agreement. No
variation of this Agreement is valid unless it is in writing and signed
by or on behalf of each party.
11.7 ASSIGNMENT
This Agreement shall be binding upon and inure for the benefit of the
successors of the parties but may not be assigned (other than by a
party hereto to an Affiliate and PROVIDED THAT, in such case, the
assignor shall be jointly and severally liable for the obligations of
the assignee pursuant to this Agreement) without the consent of the
other party.
11.8 NO PARTNERSHIP
This Agreement does not create and shall not be construed as creating
any partnership between the Parties, and each party hereto is acting in
its own name and for its own account.
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12. TERM AND TERMINATION
12.1 TERM
This Agreement is entered into for a period of 10 years from the date
of its execution, and shall then be automatically renewed for
successive periods of five years, provided that the Licensee has met
the performance goals to be negotiated and set forth in a separate
addendum within six months of the date of this License Agreement.
12.2 EARLY TERMINATION
This Agreement may be terminated by any party in the event:
(a) that the other party shall have been in material breach of its
obligations hereunder and shall have failed to remedy such
breach within 30 days of a written notice of breach; or
(b) that the other party shall have been declared bankrupt.
12.3 CONSEQUENCES OF TERMINATION
Upon termination of this Agreement, whether pursuant to Clause 12.1
TERM or Clause 12.2 EARLY TERMINATION
(a) All rights and obligations pursuant to this Agreement shall
terminate immediately, save for (i) this Clause 12.3
CONSEQUENCES OF TERMINATION which shall continue to apply
until all obligations thereunder shall have been satisfied,
and (ii) Clauses 11.1 CONFIDENTIALITY and
13. Governing Law and Dispute Resolution, which shall
continue to apply for a period of 5 years from the
date of termination;
(b) Any then Issuing Sub-Licences then existing shall, at PW's
option either (i) be terminated under the Licensee's
responsibility, or (H) be assigned in full to PW, in which
case the Licensee shall indemnify PW and keep it indemnified
against any and all claims of or liabilities towards the
sub-licensee to the extent that such claims or liabilities
relate to facts or circumstances having occurred prior to the
assignment of the Issuing Sub-Licence;
(c) the Licensee shall pay forthwith (i) any outstanding invoices,
and (ii) fees, cost and expenses in respect of products and
services in progress or already provided but not yet invoiced,
and for which PW shall issue a global invoice;
(d) the Licensee shall promptly return, at its expenses, all
material provided to it by PW hereunder (other than Equipment
duly paid for), including but not limited to all
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copies of the Proton System and the Licensee System and any
software incorporated therein or relating thereto and any
related documentation and materials.
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13. GOVERNING LAW AND DISPUTE RESOLUTION
13.1 GOVERNING LAW
This Agreement shall be governed by and interpreted exclusively in
accordance with the laws of Belgium.
13.2 DISPUTE RESOLUTION
13.2.1 MEDIATION. Any dispute between the Parties hereto arising in connection
with this Agreement shall first be resolved by mediation within the
Project Committee. Failing amicable resolution by the Project Committee
within 30 days, the matter may, at the request of any party to the
dispute, be escalated for mediation to the Chief Executive Officer of
the ultimate parent company of the parties to the dispute.
13.2.2 ARBITRATION. Failing amicable resolution by the CEOs within 30 days
from a request for mediation, the matter shall (without prejudice to
the right of any party to seek preliminary injunction in summary
proceedings ("EN REFERE"), in which case the courts of Brussels shall
have exclusive jurisdiction) be submitted for final decision to a panel
of three arbitrators, appointed and acting in accordance with the rules
of the CEPANI.
The arbitration tribunal shall sit in Brussels, Belgium; proceedings
shall be conducted in the English language.
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Done in Chicago on May 13 1999 in 2 originals, each party acknowledging
having received one signed original.
PROTON WORLD INTERNATIONAL S.A. THE PATHWAYS GROUP, INC.
/s/ XXXXXX XXXXXXX /s/ XXXXX X. XXXX XX
----------------------------- -----------------------------
Xxxxxx Xxxxxxx Xxxxx X. Xxxx XX
Managing Director President and CEO
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