EXHIBIT 10.7
SERVICES AGREEMENT
AGREEMENT made as of this 9th day of October, 2008 by and between
Sungame Corporation, a Delaware Corporation (the "Company"), located at 000
Xxxxxxxxxx Xxxx Xxxxx 000, Xxxxxxxxxx, XX 00000, XXX , and Diamond Star Exports
LTD. located at _________________________________ (the Service Provider, "SP").
WHEREAS, the Company desires professional guidance and advice regarding
development of its business model and desires SP to aid it in business matters;
and
WHEREAS, SP has reasonable expertise, directly or through its SBU's,
holdings, affiliates and sub contracting providers, in the area of Sungame's
business; and is willing to act as a Service Provider to the Company upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein contained, the parties hereto agree as follows:
1. DUTIES, SCOPE OF AGREEMENT, AND RELATIONSHIP OF THE PARTIES
(a) SP shall provide commercially reasonable efforts to provide
services as engaged for the following:
1. Resources at junior programmer/animator(1-2 year programming
or animation experience)/customer care staff at USD10/hour
2. Resources at experienced programmer/animator (3-5 years
programming or animation experience) at USD15/hour
3. Resources at expert programmer/animator level (over 5 years
programming or animation experience) at USD20/hour
4. More experienced resources whom participates in the creative
phase and contribute to the overall solution, at USD30/hour
5. Of the above development resources, 10%-20% resources would be
used for the maintenance, development and up gradation of the
current version of Sungame and the rest would be utilized
towards software development, testing and other requirements
for building the next generation of Sungame Virtual World.
6. The resources availability would expire at the end of forty
eight (48) months of the date of signing of this letter
irrespective of Sungame utilizing them completely or
partially. The group will make all efforts to support Sungame
in the provisioning of the development resources during this
time frame.
7. Every cost mentioned above for resources would incur an
incremental increase of seven and one half percent (7.5%)
every 6 months starting with the first increment in Jul 09.
The total of USD$625,000 would be calculated at all times
based on the costs applicable at that time.
8. During 2009, Sungame shall engage SP for various separate
outsourced services, outside the scope of and in addition to
the above mentioned USD$625,000, and commits to a minimum of
USD$100,000 of these services during 2009 (price to be in line
with the hourly rates as defined above and as aligned with the
scope therein and for those additional services where the
scope is not defined to be separately defined and the rates to
be agreed between the parties).
9. Purchaser also will have a first right of refusal for
providing development and other substantially similar services
on a paid basis required by Sungame (over and above the scope
of the above mentioned USD$625,000 and USD$100,000) from the
date of signing of this letter. In other words the process to
be followed would be as follows: whenever Sungame needs
development or other substantially similar services, Sungame
shall send out RFQ and RFP from various external agencies as
well as entities within the group that can provide the
service. SP will win the order if it agrees to match a bona
fide offer to provide the services by an equally qualified
provider and provide the service or provide better terms and
conditions to implement the same. If SP does not match the
bona fide quote and Sungame does not initiate the services
with the other provider at exactly the same terms as presented
to SP within thirty days, then Company must restart the
procedure referenced herein. The detailed purchase process
10. It is also hereby understood that specific terms and
conditions regarding delivery timelines, approval cycles and
parameters, payment timelines and other service level
parameters would be later defined in a service level agreement
and/or in specific work orders mutually by both the parties in
accordance with the spirit of this agreement. The Company
would also consult with SP and use reasonable efforts to
provide the SP with time budgets for the Services so that SP
can reasonably plan and allocate it's resources.
(b) The services rendered by consultant to the company pursuant to this
Agreement shall be as an independent contractor, and this Agreement does not
make SP the employee, agent, or legal representative of the Company for any
purpose whatsoever, including without limitation, participation in any benefits
or privileges given or extended by the Company to its employees. No right or
authority is granted to SP to assume or to create any obligation or
responsibility, express or implied, on behalf of or in the name of the company,
expect as may be set forth herein. The company shall not withhold for SP any
federal or state taxes from the amounts to be paid to consultant hereunder, and
SP agrees that he will pay all taxes due on such amounts. For every delivery
made by the SP which is accepted by the Company, the Company would automatically
indemnify and hold harmless SP, its, affiliates, service providers, SBU's,
officers, directors, employees, agents and representatives from and against any
and all claims, damages, costs, judgments, penalties and expenses of any kind
(including reasonable legal fees and disbursements) which may be obtained
against, imposed upon or suffered by any of them, arising out of any further
deployment and usage of the accepted work
2. COMPENSATION
(a) The Company will pay SP a retainer of 1,600,000 shares of common
stock fully paid and non-assessable as a retainer herefore and shall deposit
900,000 shares of common stock, in escrow, or any other mutually agreeable
holding format, for SP, subject to providing services herein described, which
shares shall be subject to earning by performance of the specified services to
Company. The Company shall release the shares from escrow in monthly increments
as services are performed, delivered and accounted for to the Company with a
minimum release of 50000 shares every month committed by the Company. However,
on completion of 18 months from the signing of this contract, the Company shall
release all pending shares from the escrow to the SP irrespective of the stage
of utilization of these development services. The Company shall continue to
avail of the development services, as agreed above, from the SP even after this
allotment and till the expiry or mutually agreed renewal of this contract. Also,
if the listed price for the Company share remains at or below $0.25 per share
for a majority part, 75% and above, of a period of 6 months, then the SP would
be relieved of all obligations to provide further services as part of this
contract and the Company would release all pending shares from the escrow, even
if they are not due to the SP, unequivocally to the SP on due notification from
the SP.
(b) Other forms of compensation may occur depending on the nature of a
specific transaction and only upon the separate written mutual agreement of both
parties.
3. EXPENSES
The Company shall reimburse SP for all pre-approved reasonable and necessary
expenses incurred by it in carrying out its duties under this Agreement. SP
shall submit related receipts and documentation with his request for
reimbursement
4. RENEWAL; TERMINATION
(a) This Agreement shall continue in effect until terminated by the
parties, but not longer than 48 months from the date is signed.
(b) Subject to the continuing obligations of SP under Section 5 below,
either party may terminate this Agreement at any time if the other party shall
fail to fulfill any material obligation under this Agreement and shall not have
cured the breach within 30 days after having received notice thereof.
(c) Such termination shall take place 60 days after the above mentioned
notice and without any cure. The Company agrees to compensate fully for all the
active resources deployed by the SP for the Company for the full 60 days from
the notice of termination. The Termination or expiration of this agreement shall
not extinguish any rights of compensation that shall accure prior to the
termination of the SP.
5. CONFIDENTIAL INFORMATION
(a) "Confidential Information," as used in this Section 5, means
information that is not generally known and that is proprietary to the Company
or that the Company is obligated to treat as proprietary. This information
includes, without limitation:
(i) Trade secret information about the Company and its products;
(ii) Information concerning the Company's business as the Company
has conducted it since the Company's incorporation or as it
may conduct it in the future; and
(iii) Information concerning any of the Company's past, current, or
possible future products, including (without limitation)
information about the Company's research, development,
engineering, purchasing, manufacturing, accounting, marketing,
selling, or leasing efforts.
(b) Any information that SP reasonably considers Confidential
Information, or that the Company designates or treats as Confidential
Information, will be presumed to be Confidential Information (whether SP or
others originated it and regardless of how it obtained it).
(c) Except as required in its duties to the Company, SP will never,
either during or after the term of this Agreement, use or disclose confidential
Information to any person not authorized in writing by the Company to receive
it.
(d) If this Agreement is terminated, SP will promptly turn over to the
Company all records and any compositions, articles, devices, apparatus and other
items that disclose, describe, or embody Confidential Information, including all
copies, reproductions, and specimens of the Confidential Information in its
possession, regardless of who prepared them. The rights of the Company set forth
in this Section 5 are in addition to any rights of the Company with respect to
protection of trade secrets or confidential information arising out of the
common or statutory laws of the State of Delaware or any other state or any
country wherein SP may from time to time perform services pursuant to this
Agreement. This Section 5 shall survive the termination or expiration of this
Agreement.
6. LIMITED LIABILITY
(a) Except as provided in sections 1 through 4 and except for any
breach by either party of its confidentiality obligations pursuant to section 5
above, neither party will be liable to the other party for incidental or
consequential damages or the loss of anticipated profits arising from any breach
of this agreement by such party, even if such party is notified of the
possibility of such damages and regardless of whether any remedy set forth
herein fails of its essential purpose.
(b) Damages Cap. SP's liability for direct damages, if any, whether in
an action in contract or based on warranty, in law or equity shall not exceed
the original arrived/cash value of the fees paid by Company to SP for that
particular work order
7. MISCELLANEOUS
(a) SUCCESSORS AND ASSIGNS. This Agreement is binding on and ensures to
the benefit of the Company, its successors and assigns, all of which are
included in the term the "Company" as it is used in this Agreement and upon SP,
its successors and assigns. Neither this Agreement nor any duty or right
hereunder will be assignable or otherwise transferable by either party without
the written consent of the other party, except that the Company shall assign
this Agreement in connection with a merger, consolidation, assignment, sale or
other disposition of substantially all of its assets or business. This Agreement
will be deemed materially breached by the Company if its successor or assign
does not assume substantially all of the company's obligations under this
Agreement.
(b) MODIFICATION. This Agreement may be modified or amended only by a
writing signed by both the Company and SP.
(c) GOVERNING LAW. The laws of Delaware will govern the validity,
construction, and performance of this Agreement. Any legal proceeding related to
this Agreement will be brought in an appropriate Delaware court, and both the
Company and SP hereby consent to the exclusive jurisdiction of that court for
this purpose.
(d) CONSTRUCTION. Wherever possible, each provision of this Agreement
will be interpreted so that it is valid under the applicable law. If any
provision of this Agreement is to any extent invalid under the applicable law,
that provision will still be effective to the extent it remains valid. The
remainder of this Agreement also will continue to be valid, and the entire
Agreement will continue to be valid in other jurisdictions.
(e) WAIVERS. No failure or delay by either the Company or SP in
exercising any right or remedy under this Agreement will waive any provision of
the Agreement, nor will any single or partial exercise by either the Company or
SP of any right or remedy under this Agreement preclude either of them from
otherwise or further exercising these rights or remedies, or any other rights or
remedies granted by any law or any related document.
(f) CAPTIONS. The headings in this Agreement are for convenience only
and do not affect this Agreement's interpretation.
(g) ENTIRE AGREEMENT. This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and understandings
between the parties concerning the matters in this Agreement.
(h) NOTICES. All notices and other communications required or permitted
under this Agreement shall be in writing and sent by registered first-class
mail, postage prepaid, and shall be effective five days after mailing to the
addresses stated below. These addresses may be changed at any time by like
notice.
(i) In the event of a dispute hereunder, for which legal action is
brought, the prevailing party in such action shall be entitled to an award of
legal fees and costs hereunder.
In the case of the Company:
In the case of SP:
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"The Company" "Service Provider"
Sungame Corporation Diamond Star Exports LTD.
By: By:
------------------------- ------------------------
