Exhibit 10.7
Software Development and License Agreement dated September 20, 1999
between the Company and Sideware Systems, Inc.
SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT
THIS AGREEMENT is dated as of the 20th day of September, 1999.
BETWEEN:-
BRAINTECH, INC., a company subsisting under the laws of
Nevada and having its head office in British Columbia at
Xxxxx 000, 000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0
("BrainTech")
AND:
SIDEWARE SYSTEMS INC., a company duly incorporated under the
laws of the Province of British Columbia having its head
office at Xxxxx 000, 000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, X.X.
X0X 0X0
("SSI")
WHEREAS:-
A. BrainTech has proposed to develop the Software.
B. Sideware is the owner and developer of Xx. Xxxx, which facilitates
customer care and customer relations management for companies operating
e-business internet web sites.
C. One potential application of the Software is as a component of Xx.
Xxxx.
D. The parties wish to provide for the development and licensing of the
Software on the terms and conditions set out herein.
NOW THEREFORE WITNESSETH that in consideration of the premises and of
the mutual covenants and agreements set forth herein, the parties hereto
covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
DEFINITIONS
1.01 In this Agreement, including the recitals hereto, the following words
and phrases shall have the following meanings:-
(a) "Available Date" means the date on which a version of Xx. Xxxx
incorporating the Software becomes generally available for sale to the
public;
(b) "Xx. Xxxx" includes:
(i) the software application currently being marketed by
Sideware under the name "Xx. Xxxx";
(ii) any modifications or enhancements to the software described
in (i); and
(iii) any other software applications which may be developed or
marketed by Sideware which include functions similar to those
performed by the software described in (i);
(c) "Intellectual Property Rights" includes copyrights, patents, trade
marks, service marks, design rights (whether registered or unregistered),
moral rights, semiconductor topography rights, trade secrets and all
other similar proprietary rights;
(d) "Sideware" includes SSI, Sideware Corp., Sideware International S.R.L.,
and any other affiliates or subsidiaries thereof;
(e) "Software Developer" means any company whose business includes the
development and marketing of software applications;
(f) "Systems Integrator" means any company which is not a Software Developer,
and whose business includes the creation of customised computer systems
using software applications developed by other persons;
(g) "Know How" includes all technical information, procedures, programs,
codes, trade secrets, methods, concepts, ideas, practices, algorithms,
techniques, information, and specifications relating to the Software;
(h) "Software" means the Wizmaster computer program to be developed generally
in accordance with the Specifications; and
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(i) "Specifications" means the specifications for the Software set out
Schedule in "A".
CAPTIONS AND SECTION NUMBERS
1.02 The headings and section references in this Agreement are for
convenience of reference only and do not form a part of this Agreement and
are not intended to interpret, define or limit the scope, extent or intent of
this Agreement or any provision thereof.
EXTENDED MEANINGS
1.03 The words "hereof", "herein", "hereunder" and similar expressions used
in any clause, paragraph or section of this Agreement shall relate to the
whole of this Agreement and not to that clause, paragraph or section only,
unless otherwise expressly provided.
NUMBER AND GENDER
1.04 Whenever the singular or masculine or neuter is used in this
Agreement, the same shall be construed to mean the plural or feminine or body
corporate where the context of this Agreement or the parties hereto so
require.
SECTION REFERENCES AND SCHEDULES
1.05 Any reference to a particular "article", "section", "subsection" or
other subdivision is to the particular article, section or other subdivision
of this Agreement and any reference to a schedule by letter shall mean the
appropriate schedule attached to this Agreement and by such reference the
appropriate schedule is incorporated into and made part of this Agreement.
GOVERNING LAW
1.06 This Agreement and all matters arising hereunder shall be governed by,
construed and enforced in accordance with the laws of the Province of British
Columbia, Canada.
SEVERABILITY OF CLAUSES
1.07 In the event that any provision of this Agreement or any part thereof
is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
CURRENCY
1.08 All sums of money to be paid or calculated pursuant to this Agreement
shall be paid or calculated in currency of the United States of America
unless otherwise expressly stated.
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SCHEDULES
1.09 The following are the schedules attached to and incorporated in this
Agreement by reference and deemed to be part hereof:-
Schedule "A" - Specifications
Schedule "B" - Hourly charge out rates
ARTICLE 2
DEVELOPMENT OF SOFTWARE
DEVELOPMENT OF THE SOFTWARE
2.01 Following the execution and delivery of this Agreement, BrainTech
shall use diligent and continuous efforts to cause the Software to be
developed generally in accordance with the Specifications. SSI acknowledges
that some or all of the development work may be carried out through BrainWare
Systems Inc., as a sub-contractor to BrainTech.
SSI TO PAY DEVELOPMENT COSTS
2.02 SSI will pay for the development of the Software in accordance with
the following procedure.
(a) At the end of each month, BrainTech shall be entitled to submit an
invoice to SSI in an amount equal to:
(i) the costs incurred by BrainTech during the month in the
development of the Software; plus
(ii) a 10% allowance for profit.
(b) In calculating the costs incurred in the development of the Software,
BrainTech shall be entitled to charge for work done by personnel in the
categories described in Schedule "B" at the charge out rates set out in
Schedule "B".
(c) For work done by personnel not included in the categories set out in
Schedule "B", BrainTech shall include in its invoices such time charges
as it considers reasonable. SSI shall be entitled to dispute the
reasonableness of any such charges by giving notice to BrainTech within
30 days of receiving the invoice. If the parties are unable to resolve
their disagreement within 30 days of SSI giving
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such notice, then any dispute shall be resolved by arbitration pursuant
to section 7.07.
(d) BrainTech shall be entitled to include in its invoices other out of
pocket expenses incurred in the development of the Software, plus a 10%
allowance for profit.
(e) SSI shall pay all invoices within 30 days of receipt. If SSI disputes
the amount of any invoice, it shall be entitled either to:
(i) pay such amount as may be in dispute into a lawyer's trust
account pending resolution of the dispute; or
(ii) pay such amount as may be in dispute to BrainTech, subject
to the right of SSI to recover the amount in dispute subsequently,
if the dispute is resolved in SSI's favour.
AUDIT RIGHTS
2.03 SSI shall at any time have the right on reasonable notice to BrainTech
to audit the books and records of BrainTech in respect of the amounts charged
to SSI pursuant to this Agreement for any period. The costs of the audit
shall be borne by BrainTech if the results of such audit disclose that
BrainTech overcharged SSI by 10% or more in respect of the period under
audit. Any dispute arising out of such audit shall be resolved by
arbitration in accordance with section 7.07.
MONTHLY REPORTS
2.04 At the end of each month, BrainTech shall give SSI a report on the
development of Software, which report shall include:
(a) a description of the development work completed to date;
(b) an estimated date for completion of the development; and
(c) an estimated cost for completion of the development.
TERMINATION OF DEVELOMENT
2.05 SSI shall be entitled at any time prior to delivery of the Software to
give notice to BrainTech terminating its involvement in development of the
Software. If SSI gives such notice:
(a) SSI's payment obligations pursuant to section 2.02 shall terminate;
(b) BrainTech's development obligations pursuant to section 2.01 shall
terminate;
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(c) Sideware shall not be entitled to any license rights under Article 3; and
(d) If BrainTech subsequently sells or licenses the Software to any other
person, BrainTech shall repay to SSI the amounts paid by SSI pursuant to
section 2.02, except that BrainTech's liability pursuant to this
subsection shall be limited to the greater of:
(i) the total of the amounts paid by SSI pursuant to section 2.02; and
(ii) the total sales and license revenue received by BrainTech
from such third party sales or licenses.
TESTING AND DE-BUGGING OF SOFTWARE
2.06 BrainTech shall notify SSI when development of the Software has
reached the stage where integration of the Software with Xx. Xxxx, and
testing and de-bugging thereof, is feasible. The parties thereafter will
co-operate to complete integration of the Software with Xx. Xxxx as soon as
reasonably practicable.
DELIVERY OF SOFTWARE
2.07 Upon completion of the integration of the Software with Xx. Xxxx, and
provided that SSI shall have paid to BrainTech all amounts owing pursuant to
section 2.02, BrainTech shall deliver to Sideware:
(a) the source code for the Software; and
(b) such other technical data and information relating to the Software
as Sideware may require.
Use of such source code and technical data by Sideware shall be subject to
Article 3.
EXPLOITATION OF SOFTWARE BY SIDEWARE
2.08 Following delivery of the Software to Sideware, Sideware shall use
reasonable commercial efforts to achieve the Availability Date as soon as
reasonably practicable.
SUPPORT FOR SOFTWARE
2.09 Following delivery of the Software BrainTech shall, upon request from
Sideware, give such assistance to Sideware as BrainTech is reasonably able to
give in respect of:
(a) further development or enhancement of the Software by Sideware; and
(b) correcting any defects or errors in the Software.
Sideware will pay BrainTech for the reasonable personnel charges in rendering
such assistance on the same basis as set out in section 2.02.
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ARTICLE 3
GRANT OF LICENSE
GRANT OF LICENSE
3.01 Upon completion of the integration of the Software with Xx. Xxxx, and
provided that SSI shall have paid to BrainTech all amounts owing pursuant to
section 2.02, Sideware shall have and hold a perpetual, irrevocable,
world-wide, fully pre-paid license to use the Software on the terms and
conditions set out herein.
PERMITTED USE AND SUB-LICENSEING
3.02 Sideware may:
(a) use the Software as a component of its Xx. Xxxx application;
(b) sub-license directly and indirectly the Software to licensees and
purchasers of Xx. Xxxx for use as part of Xx. Xxxx;
(c) use the Software and the Know How to develop further enhancements
and modifications of the Software and Xx. Xxxx; and
(d) use the Software and the Know How for any purposes incidental to
(a) to (d), above.
MODIFICATIONS AND ENHANCEMENTS DEVELOPED BY SIDEWARE
3.03 Any modifications or enhancements to the Software developed by Sideware
will belong to Sideware.
MODIFICATIONS AND ENHANCEMENTS DEVELOPED BY BRAINTECH
3.04 Any modifications or enhancements to the Software developed by
BrainTech will belong to BrainTech. Sideware shall be entitled to acquire
license rights in respect of such modifications or enhancements in accordance
with the following procedure.
(a) Forthwith upon completing any material modification or enhancement to
the Software, BrainTech shall give notice to SSI thereof. Such notice
shall describe in reasonable detail the functions performed or enhanced
by the modifications or enhancements, and shall state the cost incurred
by BrainTech in developing the modifications or enhancements, calculated
as nearly as practicable in accordance with section 2.02.
(b) Sideware shall have 30 days following receipt of any notice delivered
pursuant to (a) to consider whether it wishes to purchase license rights
in the modification or enhancement. During such 30 day period, BrainTech
shall give Sideware such technical and other information as Sideware may
reasonably request concerning the modification or enhancement.
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(c) At any time during the 30 day period described in (a), SSI may give
notice to BrainTech that Sideware wishes to acquire license rights in the
modification or enhancement. Concurrently with giving such notice, SSI
must pay the cost stated by BrainTech in the notice given pursuant to
(a) plus a 10% allowance for profit.
(d) Upon giving notice pursuant to (c), Sideware shall acquire license rights
in the modification or enhancement on the same terms and conditions as
set out in sections 3.01 to 3.03.
RESTRICTION ON LICENSING BY BRAINTECH
3.05 For a period of one year following the Availability Date, BrainTech
shall not license the Software to any Software Developer other than Sideware.
For greater clarity, this section shall not prevent BrainTech from licensing
the Software to any Systems Integrator. The restrictions set out in this
section shall also apply to any modification or enhancement to which Sideware
acquires license rights pursuant to section 3.04, except that in such case
the one year period specified in this section shall commence, in respect of
such modification or enhancement, on the date Sideware gives notice pursuant
to subsection 3.04(c).
OWNERSHIP OF SOFTWARE AND KNOW HOW
3.06 Except as expressly set out herein, no provision of this Agreement
shall or shall be construed to assign, transfer, or otherwise convey to
Sideware any ownership right of any sort in the Software or the Know How.
ARTICLE 4
PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
ACKNOWLEDGEMENTS OF BRAINTECH
4.01 BrainTech acknowledges that Xx. Xxxx is the property of Sideware
solely and exclusively, and that:
(a) Xx. Xxxx and the know how related thereto constitute valuable trade
secrets of Sideware;
(b) all Intellectual Property Rights relating to Xx. Xxxx (except for those
rights Sideware has licensed from third parties) are the property of
Sideware; and
(c) all technical data relating to Xx. Xxxx is confidential information
belonging to Sideware and, to the extent that such information is
disclosed to BrainTech, it is disclosed to BrainTech in confidence.
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PROTECTION OF CONFIDENTIALITY
4.02 BrainTech shall adopt internal operating procedures and shall take all
other reasonable steps to protect and ensure the confidentiality of
Sideware's confidential information relating to Xx. Xxxx. Without limiting
the generality of the foregoing, the steps taken by BrainTech shall include
compliance with sections 4.03 to 4.05 of this Agreement.
PROHIBITION ON USE AND DISCLOSURE
4.03 Except as expressly authorized by this Agreement, or except as
expressly authorized in writing in advance by Sideware, BrainTech shall not:-
(a) disclose, provide, or make available any information relating to Xx. Xxxx
to any person, except to employees of BrainTech for whom access to the
information is necessary to enable BrainTech to perform its obligations
or exercise its rights under this Agreement;
(b) copy, disassemble, decompile, translate or convert into human readable
form, or reverse engineer, all or any part of Xx. Xxxx;
(c) use Xx. Xxxx or any information relating to Xx. Xxxx for any purpose
other than to facilitate development of the Software pursuant to this
Agreement; or
(d) remove any proprietary, copyright or trade secret legend from any copy of
Xx. Xxxx or from any copy of any technical written material relating to
Xx. Xxxx.
QUALIFICATION TO SECTION 4.03
4.04 Section 4.03 shall not prevent the disclosure of information which (i)
is or becomes part of the public domain through no act or omission of
BrainTech, (ii) BrainTech receives from a third party acting without any
obligation or restriction of confidentiality in favor of Sideware, (iii)
Sideware releases from confidential treatment by written consent, or (iv)
BrainTech is required by any applicable law or court order to disclose.
CONFIDENTIALITY AGREEMENTS
4.05 Prior to permitting any employee of BrainTech (or any other person, if
access by such other person is authorised by this Agreement) to have access
to Xx. Xxxx or any technical information relating thereto, BrainTech shall
cause such employee or other person to enter into a confidentiality agreement
pursuant to which the employee (or other person) covenants to protect the
confidentiality of Xx. Xxxx.
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PROTECTION OF CONFIDENTIALITY OF BRAINTECH
4.06 Except as expressly provided in this Agreement, SSI shall keep (and
shall cause the other entities included within Sideware to keep) confidential
all confidential information, trade secrets, or know-how of BrainTech which
is in its possession or hereafter becomes known to Sideware as a result of
this Agreement (the "BrainTech Confidential Information"). Prior to
permitting any employee of SSI (or any other person, if access by such other
person is authorised by this Agreement) to have access to the BrainTech
Confidential Information, SSI shall cause such employee or other person to
enter into a confidentiality agreement pursuant to which the employee (or
other person) covenants to protect the confidentiality of the BrainTech
Confidential Information.
QUALIFICATION TO SECTION 4.06
4.07 Section 4.06 shall only apply to such information relating to the
affairs of BrainTech that BrainTech expressly designates as confidential, or
which is by its nature patently confidential. In addition, section 4.06
shall not apply to any information in respect of which Sideware acquires any
license or right, pursuant to this Agreement, to use or exploit for its own
benefit or advantage, or prevent disclosure of any information which (i) is
or becomes part of the public domain through no act or omission of Sideware,
(ii) Sideware receives from a third party acting without any obligation or
restriction of confidentiality in favor of BrainTech, (iii) BrainTech
releases from confidential treatment by written consent, or (iv) Sideware is
required by any applicable law or court order to disclose.
INFRINGEMENT CLAIMS BY THIRD PARTIES
4.08 Subject to the limitations set out in this section, BrainTech shall at
BrainTech's expense conduct the defence of any action brought by any third
party against Sideware alleging that use by Sideware of the Software or the
Know How constitutes violation of any Intellectual Property Right of such
third party. BrainTech's obligations under this section shall:
(a) only apply if the infringing conduct alleged by the third party arises
from use of the Software or the Know How for a use authorised by this
Agreement, or conduct necessarily incidental thereto;
(b) only apply if Sideware gives BrainTech prompt notice of the claim by the
third party;
(c) not apply to any claim based on use of any modification or enhancement
developed by Sideware; and
(d) not apply to any claim based on the combination or connection of the
Software by Sideware to any other product, device, program, or system
(other than Xx. Xxxx) which BrainTech did not supply to Sideware.
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ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
4.09 Each party acknowledges that damages will not be an adequate remedy
for any infringement or threatened infringement of the Intellectual Property
Rights of the other party. Each party agrees that:
(a) in any proceeding in respect of any infringement or threatened
infringement of the Intellectual Property Rights of the other party, the
party seeking to enforce its Intellectual Property Rights shall be
entitled to interim, interlocutory, and permanent injunctive relief
without regard to the balance of convenience or the adequacy of damages;
(b) each party shall submit to and attorn to, and hereby submits to and
attorns to, the jurisdiction of the Supreme Court of British Columbia in
respect of any such proceeding;
(c) any order or decision of the Supreme Court of British Columbia shall be
enforceable against and binding upon the parties in respect of activities
in any jurisdiction; and
(d) notwithstanding subsections (b) and (c), no party shall be required to
commence proceedings to enforce its Intellectual Property Rights in the
Supreme Court of British Columbia, but shall be entitled to commence such
proceedings in another jurisdiction if such party is of the view that
proceedings in such other jurisdiction might reasonably result in more
effective or valuable relief being granted.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BRAINTECH
5.01 BrainTech represents and warrants to Sideware, with the intent that
Sideware will rely thereon in entering into this Agreement and in concluding
the transactions contemplated hereby, that:
(a) BrainTech is duly incorporated and organized under the laws of the State
of Nevada and has the power, authority and capacity to enter into this
Agreement and carry out its terms;
(b) BrainTech has the corporate power and authority to own its property and
to carry on the business now being conducted by it;
(c) this Agreement will constitute legal, valid and binding obligations of
BrainTech enforceable in accordance with its terms; and
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(d) the entering into of this Agreement and the performance by BrainTech of
its obligations thereunder do not and will not result in the violation of
any of the terms and provisions of any agreement to which BrainTech is a
party or by which it or any of its properties or assets are bound.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SIDEWARE
6.01 SSI represents and warrants to BrainTech, with the intent that
BrainTech will rely thereon in entering into this Agreement and in concluding
the transactions contemplated hereby, that:
(a) SSI is duly constituted and organised under laws of British Columbia and
has the power, authority and capacity to enter into this Agreement and
carry out its terms;
(b) SSI has the corporate power and authority to own its property and to
carry on the business now being conducted by it;
(c) this Agreement will constitute legal, valid and binding obligations of
SSI enforceable in accordance with its terms; and
(d) the entering into of this Agreement and the performance by SSI of its
obligations thereunder do not and will not result in the violation of any
of the terms and provisions of any agreement to which SSI is a party or
by which it or any of its properties or assets are bound.
NO WARRANTY OF QUALITY
6.02 SSI acknowledges that the Software represents unique and novel
technology. No warranty, covenant, or representation, express or implied, is
given by BrainTech as to the quality or performance characteristics of the
Software, the suitability or fitness of the Software for any use, or the
absence of defects in the Software.
ARTICLE 7
GENERAL PROVISIONS
NOTICES
7.01 All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
by hand or telecopied:
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To SSI:
SIDEWARE SYSTEMS INC.
0000 - 000 Xxxxxx Xx.
Xxxxxxxxx, X.X.
X0X 0X0
Fax: (000) 000-0000
To BrainTech:
BRAINTECH, INC.
#102, 000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx, X.X.
X0X 0X0
Fax: (000) 000-0000
or to such other address as may be given in writing by the parties in
accordance with this section, and shall be deemed to have been received, if
delivered by hand, on the date of delivery, if telecopied to the telecopier
numbers set out above, on the business day next following the date of
transmission.
TIME OF ESSENCE
7.02 Time is hereby expressly made of the essence of this Agreement with
respect to the performance by the parties of their respective obligations
under this Agreement.
BINDING EFFECT
7.03 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and assigns.
ENTIRE AGREEMENT
7.04 This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
expectations, understandings, communications, representations and agreements
whether verbal or written between the parties with respect to the subject
matter hereof.
FURTHER ASSURANCES
7.05 Each of the parties hereby covenants and agrees to execute such
further and other documents and instruments and do such further and other
things as may be necessary or desirable to implement and carry out the intent
of this Agreement.
AMENDMENTS
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7.06 No amendment to this Agreement shall be valid unless it is evidenced
by a written agreement executed by all of the parties hereto.
ARBITRATION
7.07 All disputes arising under this Agreement shall be resolved through
arbitration by a single arbitrator in accordance with the COMMERCIAL
ARBITRATION ACT of British Columbia, except that nothing in this section
shall prevent a party from commencing proceedings before another court or
tribunal to protect any Intellectual Property Right.
GOOD FAITH
7.08 All parties to this Agreement shall exercise their respective rights,
and perform their respective obligations, in good faith and in a commercially
reasonable manner.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on
the day and year first above written.
SIDEWARE SYSTEMS INC.
Per:
"signed"
---------------------------------
Authorised Signatory
BRAINTECH, INC.
Per:
"signed"
---------------------------------
Authorised Signatory
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