EXHIBIT 10.4
IP PURCHASE AND SALE AGREEMENT - FREE DA
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THIS AGREEMENT is made effective as of the date set forth below the signatures
of the parties (the "Effective Date")
BETWEEN:
668158 B.C. LTD.,
a British Columbia company,
having an office at 00000 00xx Xxxxxx,
Xxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(hereinafter called the" Vendor")
OF THE FIRST PART
AND:
FREE DA CONNECTION SERVICES INC.,
a British Columbia company, having an
office at Suite 301 - 0000 Xxx Xxx Xxxxxx,
Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. the Vendor is the owner of Technology and Intellectual Property Rights
(as defined herein) relating to the provision of directory assistance services
and as further defined in section 1.1(f);
B. the Vendor has agreed to sell to the Purchaser the Technology and
Intellectual Property Rights on the terms and conditions set out herein and
further agrees to transfer right and full title to the Technology and
Intellectual Property upon the execution of this agreement;
C. the Vendor is the holder and owner of the Technology and Intellectual
Property and has full right and title to transfer said technology to the
Purchaser unencumbered;
D. at the time of making this Agreement, the Technology and Intellectual
Property Rights are intermingled with other intellectual property owned by the
Vendor which is not being sold to the Purchaser;
E. for the purpose of separating out the Technology and Intellectual
Property Rights, the Purchaser agrees to have the Vendor's selected patent
counsel prepare and file certain Divisional Applications in accordance with the
terms of this Agreement and will transfer the Divisional filings to the Vendor
according to this Agreement and at the expense of the Purchaser;
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THEREFORE this Agreement witnesses that in consideration of the covenants,
promises and agreements set forth herein, the adequacy and delivery of which
consideration is hereby acknowledged by the parties, the parties agree as
follows:
1. DEFINITIONS
1.1 In this Agreement (including the recitals), the following terms shall
have the meanings given to them below:
(a) "Gross Revenue" means all revenues, receipts, royalties and other money
earned, collected or received, whether for cash or credit or by way of any
benefit, advantage or concession, and as reported in the annual 10KSB as filed
with the SEC by Purchaser.
(b) "Confidential Information" means any or all information, knowledge,
data, know-how, material or property with respect to a party, the Technology,
the Intellectual Property Rights, Improvements or Services of such party (the
"Discloser"), which the other party (the "Recipient") may acquire during the
performance of its obligations hereunder, whether or not designated as
confidential or proprietary, including without limitation, all trade secrets,
inventions, ideas, concepts, improvements, developments, technical data, test
results, designs, blueprints, drawings, operations, techniques, instructions,
material in which the Discloser has copyright, computer programs and all
documentation related thereto, business plans and procedures, price lists,
customer lists, contracts, all information concerning suppliers and customers,
financial and bookkeeping records and personnel records, but excluding
information which:
(i) is now or later becomes readily available to the public through no
fault of the Recipient,
(ii) the Recipient can prove was obtained from a third party lawfully
in possession of such information and who does not have any confidentiality
obligation to the Discloser, or
(iii) the Recipient can prove was in the Recipient's possession prior
to receipt from the Discloser and did not originate from the Discloser;
(c) "Consent" means prior written consent;
(d) "Divisional Application" or "Divisional" means a patent application
filed as a divisional of a pending patent application;
(e) "Effective Date" has the meaning set out in the first page of this
Agreement;
(f) "Field" means the provision of products and services to companies that
service customers obtaining information through means such as telephones or
similar devices such as mobile telephones, PDAs, or computers using VOIP, and
including the delivery of Directory Assistance with or without charge to the
consumer and location based services through the previously described means;
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(g) "Improvements" means any and all ideas, inventions, improvements,
discoveries, developments, trade secrets, data and design rights and other forms
of intellectual property made, conceived, or actually or constructively reduced
to practice which are derived or arise from the Technology and which relate to
the Field, which either party may do, get or acquire;
(h) "Intellectual Property Rights" means:
(i) the patent applications and patents issuing therefrom in the world
during the term of this Agreement which cover the Technology and which are
owned prior to the execution of this agreement by the Vendor and upon
execution of this agreement are being acquired by the Purchaser; and
(ii) any improvements, continuations, renewals, reissues, extensions,
revisions, substitutions, confirmations, registrations or revalidations of
the foregoing and any patents of additions or patents of importation based
on any of said patents that cover the Technology;
(i) "Technology" has the meaning set out in Schedule "A";
(j) "Percentage of Gross Revenue Fees" means the amount payable by Purchaser
to Vendor pursuant to Section 4.1;
(k) "Services" means the provision of directory assistance services and
other such services as may be applicable, or as may be contemplated to be
delivered by the Purchaser in the Field;
(l) "License" means any agreement or arrangement by which the Purchaser
grants a person a right, or permits a person to use the Technology in the
Territory to provide Services;
(m) "Term" means the period commencing on the Effective Date and remaining
in effect until January 8, 2010 unless earlier terminated or concluded pursuant
to this Agreement;
(n) "Territory" means every jurisdiction in the world;
(o) "ViaVis Transaction" means the transaction described in Schedules "B",
"C", "D", "E" and "F";
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1.2 The Schedules to this Agreement are as follows:
A - Technology
B - ViaVis Transaction.
C - Purchased Hardware Assets
D - Purchased Software Assets
E - Assumed Debts
F - Residual Intellectual Property and table of inventions to be filed
in the Divisional filings
1.3 All dollar amounts referred to in this Agreement are in lawful funds of
the United States of America, unless otherwise indicated.
2. SALE
2.1 The Vendor hereby sells and transfers to the Purchaser the Technology
and Intellectual Property Rights on the date of the execution of this agreement
and on the terms and conditions set out hereunder.
3. LICENSES
3.1 Prior to the Purchaser paying the maximum consideration due under the
agreement, the Purchaser may License the rights and licenses granted to it in
this Agreement only in accordance with Section 18 hereunder.
4. CONSIDERATION
4.1 As consideration for the sale under Section 2 hereof, the Purchaser
shall during the Term pay the following Percentage of Gross Revenue Fees to
Vendor as follows:
(a) The Purchaser will pay to the Vendor a consideration in the amount of two
(2) percent of the gross sales of any products that the Company sells using the
Technology and Intellectual Property rights that have been transferred herein.
An annual minimum Percentage of Gross Revenue Fees shall be paid to the Vendor
in the amount of US $25,000.00, and shall be due and payable on the 10th day of
January for each year in the Term commencing January 10th, 2006. If the Gross
Revenue reported in the Purchaser's annual 10KSB filing is under one million US
dollars ($1,000,000.00) then the minimum Percentage of Gross Revenue Fees will
be due and payable to the Vendor. Any amounts paid pursuant to the Percentage
of Gross Revenues in a particular year prior to January 10th of such year will
be deducted from the annual minimum Percentage of Gross Revenue Fees due for
such year.
The Percentage of Gross Revenue Fees shall be paid in instalments to Vendor as
follows:
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(i) By not later than one (1) week after the filing of its 10KSB and
its acceptance by the SEC, the Purchaser will pay to the Vendor within a
non-refundable Percentage of Gross Revenue Fee equal to two percent (2.0%)
of the Gross Revenue of the Purchaser as defined in (a) above.
No further Percentage of Gross Revenue Fees shall be payable by the
Purchaser to the Vendor when the Purchaser has paid to the Vendor a total
maximum sum of US $500,000.00 in such Percentage of Gross Revenues Fees. At
which time all title and assignments shall have been made in full by the Vendor
to the Purchaser.
4.2 The Purchaser shall keep full, accurate and complete records and books
of account showing the Gross Revenue in detail. The Vendor shall during normal
business hours and upon reasonable notice have the right to inspect such books
and records to verify the correctness of the Gross Revenue collected in each
fiscal year. In the event of termination of this Agreement for any reason,
Vendor shall have the right to inspect such records and books for a period of
one year from the date of termination.
4.3 Percentage of Gross Revenue Fees payments shall be paid by money order,
bank draft or certified cheque drawn on a Canadian chartered bank or by wire
transfer to the account of the Vendor at Scotiabank, or such other account as
the Vendor may from time to time give written notice of to the Purchaser. If a
payment is due on a non-business day, then the Purchaser shall make such payment
on the immediately following business day.
4.4 In the event of any License granted by the Purchaser, the Purchaser
shall require any licensees to keep similar accounts and records as may be
required of the Purchaser hereunder. The Purchaser shall retain such accounts
and records for at least five years after the date upon which they were made and
shall permit any duly authorized representative of the Vendor to inspect and
audit such accounts and records during normal business hours and upon reasonable
notice at the Vendor's expense, not more frequently than once in each calendar
quarter. The Purchaser shall co-operate with the Vendor or its designated
representative as may be reasonably necessary to enable the verification of the
reports of the Purchaser and will permit such representative to take copies of
or extracts from such accounts and records. If any such audit discloses that
the actual amount of Gross Revenue collected is greater by 5% or more than that
disclosed by the report furnished by the Purchaser, then, the Purchaser shall
pay to the Vendor the cost of such audit within 5 days after completion of the
audit.
4.5 Purchaser shall not be entitled to set off any amounts due or alleged
due from Vendor to Purchaser against amounts due from Purchaser to Vendor.
Purchaser may not, on grounds of the alleged non-performance of Vendor of any of
its obligations under this Agreement or otherwise, withhold payment of any
Percentage of Gross Revenue Fees or other amounts due to Vendor, except if the
Technology and Intellectual Property Rights is challenged and found not to be
the sole property of the Vendor by a court of competent jurisdiction.
5. IMPROVEMENTS
5.1 The Purchaser acknowledges that the Technology may be, in whole or in
part, a work in progress and subject to further modifications and changes.
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5.2 Nothing contained in this Agreement shall affect the Vendor's or the
Purchaser's freedom to make Improvements. Except as otherwise provided herein,
Improvements, whether made by the Vendor or by the Purchaser, will be the sole
property of the Purchaser and the Vendor hereby assigns all right, title and
interest in such Improvements to the Purchaser, and waives any moral rights that
it might have in respect thereof. The Vendor and the Purchaser will execute any
documents reasonably required to effect and record such assignment of the
Improvements. If on termination of this Agreement, the Purchaser has not paid
the Percentage of Gross Revenue Fees as provided for in this agreement, the
Purchaser, at the Vendor's option, will assign all of its right, title and
interest in each Improvement to Vendor in consideration of the sum reasonably
spent by the Purchaser to develop such Improvements, as recorded in the
Purchaser's log related to such Improvement. Purchaser will not assign or
encumber its title in the Improvements in any way prior to the termination or
completion of this Agreement.
6 PATENT APPLICATIONS AND REGISTRATIONS AND COSTS
6.1 The Purchaser and Vendor agree mutually to maintain the Intellectual
Property Rights related to the Technology. Further the Purchaser agrees to pay
all costs associated with the maintenance of said Intellectual Property Rights.
6.2 The Purchaser acknowledges that the Intellectual Property Rights include
patent applications covering inventions that may be excluded from the
Technology. The Purchaser agrees that once it has received two million dollars
(US $2,000,000.00) in equity or debt financing, to deposit with patent counsel
of Vendor's choosing the sum of fifty thousand ($50,000.00) Canadian Dollars for
the filings of Divisional Applications in each jurisdiction corresponding to the
Intellectual Property Rights. The Vendor, in cooperation with the Purchaser,
will direct the preparation and prosecution of such Divisional Applications and
the Purchaser will pay all costs associated with doing so. Vendor will not
include claims in a Divisional that relate solely to the Field, but the parties
acknowledge that a Divisional may have claims that cover technology or
activities both inside and outside of the Field. In such a case, Vendor will
provide Purchaser a waiver that Vendor and its successors and assigns will not
use such Divisional in a claim against Purchaser or its licensees for any
technology or activities within the Field. If Purchaser elects to abandon a
pending patent application in a jurisdiction prior to the filing of a Divisional
in such jurisdiction, Purchaser will assign such application to Vendor at least
two weeks prior to the date of abandonment. If Purchaser elects not to file an
application in a particular jurisdiction, Vendor may do so at Vendor's expense.
6.3 The Purchaser will assign all of its right, title and interest in all
Divisional Applications filed pursuant to this Agreement at the time they are
filed, provided that the Vendor is not in breach of any of the terms of this
Agreement. The Purchaser agrees to execute a conditional assignment or security
interest in the Intellectual Property Rights to the Vendor, in the form
acceptable to Vendor, except for a UCC1 form, assigning all of its right, title
and interest in the Intellectual Property Rights to the Vendor should the
Purchaser breach the terms of this Agreement, have a receiving order made
against it or have a receiver appointed to continue its operations, or passes a
resolution for winding up, or commits an act of bankruptcy. The Vendor may file
such conditional assignments or security interests with the appropriate patent
offices relating to the Intellectual Property Rights.
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6.4 If the Purchaser has paid the Percentage of Gross Revenue Fees to Vendor
in accordance with this agreement and Divisionals have been filed in each
jurisdiction covered by the Intellectual Property Rights and the Purchaser is
not otherwise in breach of any of the terms of this Agreement, the Vendor will
cancel and release any security interests it may hold with respect to the
Technology and Intellectual Property as described herein. The Purchaser will
grant a perpetual, royalty free, non-exclusive license to the Vendor to use,
make and sell the subject matter of Intellectual Property Rights outside of the
Field. The Purchaser agrees not to encumber, attach, or otherwise pledge the
rights, ownership or security interest on or of the Intellectual Property Rights
in any way until the Vendor has cancelled and released the security interests
Vendor holds therein.
6.5 The Vendor agrees to forward to the Purchaser an advance copy of each
Divisional contemplated by Section 6.2 (a "New Divisional Application") and
which the Vendor or the Purchaser's counsel proposes to file at least 7 days
prior to the date such Divisional is to be filed. The Purchaser shall have
right to review each New Divisional Application and to offer its comments and
suggestions to the Vendor within 3 days of its receipt of the New Divisional
Application. The Vendor agrees to take into account any reasonable comments and
suggestions made by the.
6.6 The Vendor also agrees to promptly forward to the Purchaser a copy of
all correspondence (including issued patents) received from patent offices that
in any way relates to the Divisionals ("Patent Office Correspondence"). The
Vendor shall use its best efforts to provide to the Purchaser a copy of the
intended response for review, comment and suggestion at least 15 days prior to
filing a response to Patent Office Correspondence. The Purchaser shall provide
any comments and suggestions to the Vendor within 7 days of its receipt of the
intended response. The Vendor agrees to take into account any reasonable
comments and suggestions made by the Purchaser.
6.7 (1) If any party to this Agreement gains knowledge of any potential or
actual infringement of any of Intellectual Property Rights in the Technology,
that party shall promptly transmit such knowledge to the other party, and the
Purchaser shall be entitled, but shall not be bound, to commence legal action to
prevent infringement or further infringement and may prosecute the action. The
Purchaser may add the Vendor as a party to any such action, in which case the
Purchaser will pay all expenses of the Vendor incurred in such action as and
when due. The Purchaser covenants with the Vendor and the Vendor covenants with
the Purchaser to cooperate with each other in the prosecution of any such
action. In the event that the Purchaser determines not to commence any such
action, the Vendor may do so, at its own expense.
(2) Any proceeds of settlement or recovery of damages or other proceeds from
each such action shall be paid to the party bearing the cost of the action.
6.8 If any action is instituted against either party, to declare as invalid
any Intellectual Property, then that party shall promptly advise the other and
send copies of all material received to the other party. The Vendor shall be
entitled but shall not be bound, to defend at its own cost every such action.
If the Vendor shall decide not to defend any such action, then it shall so
advise the Purchaser who may defend at its own cost the action. The Purchaser
shall promptly
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send to the Vendor, and the Vendor shall send to the Purchaser all pleadings and
other material documents to such action, and shall report to each other on the
status upon reasonable request from the other.
6.9 Nothing in this Agreement shall be construed as a warranty or
representation by the Vendor that any patents will be granted with respect to
any of the Technology.
7. CONFIDENTIALITY AND NON-COMPETITION
7.1 Each party recognizes and agrees that all Confidential Information
constitutes confidential and valuable information proprietary of the other
party. Each party agrees that it will treat all of the other party's
Confidential Information as confidential, will not use it in an unauthorized way
nor disclose it in any form to any person. Each party will take such steps as
required to ensure the other party's Confidential Information is disclosed only
to such of the first party's servants, agents and employees who have a need to
know, and to prevent disclosure by its servants, agents and employees of any
Confidential Information, including without limitation requiring each to execute
an agreement regarding the confidentiality and non-disclosure of such
Confidential Information. Copies of such agreements will be provided to either
party, at such party's request. The obligations of each party regarding the
Confidential Information shall survive the termination of this Agreement for any
reason.
7.2 The Purchaser agrees that it will not, without the Consent of the
Vendor, directly or indirectly, either as principal, agent, employee, employer,
stockholder, partner or in any other capacity, manufacture, market or sell or
assist any other person, firm or corporation to manufacture, market or sell any
service that, in the opinion of the Vendor acting reasonably, competes with the
Technology or to file a patent application for an Improvement without notice to
the Vendor, during the term of this Agreement or until such time as the terms
and conditions of this agreement have been met in full by the Purchaser.
7.3 The Vendor agrees that it will not, without the Consent of the
Purchaser, directly or indirectly, either as principal, agent, employee,
employer, stockholder, partner or in any other capacity, manufacture, market or
sell or assist any other person, firm or corporation to manufacture, market or
sell any service that, in the opinion of the Purchaser acting reasonably,
competes with the Technology or the business of the Purchaser or to file a
patent application for and Improvement without notice to the Purchaser, during
the term of this Agreement and for 12 calendar months after the termination of
this Agreement only if this Agreement is not terminated pursuant to Section 9.2.
7.4 Each party confirms that all restrictions in Sections 7.1 7.2 and 7.3
are reasonable and valid and all defences to the strict enforcement thereof are
hereby waived. The parties to the Agreement recognize that a breach of any of
the covenants contained in this Article 7 would result in damages in respect of
which the parties may not adequately be compensated for such damages by monetary
award. Accordingly, the parties agree that in the event of any such breach, in
addition to all other remedies available at law or in equity, the party not in
breach shall be entitled as a matter of right to apply to a Court of competent
jurisdiction for such relief by way of restraining order, injunction, decree or
otherwise, as may be appropriate to ensure compliance with the provisions of
this Agreement or to terminate any breach of thereof.
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7.5 Each party shall have the right to disclose that the Purchaser is the
purchaser of the Technology, but may not disclose any other terms of this
Agreement without the Consent of the other, not to be unreasonably withheld,
except that either party may disclose the terms and conditions of this Agreement
to its potential financiers, investors and joint venture partners, provided that
the party first obtains a written agreement from each such proposed disclosee
whereby the disclosee agrees to keep all terms and conditions of this Agreement
disclosed confidential. The party shall send to the other party a copy of each
such agreement with disclosees within 10 days after execution.
7.6 The Purchaser acknowledges that the patent applications filed by the
Vendor may include Confidential Information and consents to the disclosure of
such Confidential Information for the purpose of preparation, prosecution and
publication of a patent application.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 The Vendor represents, warrants and covenants that:
(a) The Vendor is the owner of patent applications in good standing relating to
the Technology;
(b) The Vendor has the right to grant the rights, licenses and assurances
granted by it in this Agreement;
(c) The Vendor by this Agreement will transfer to the Purchaser a good, safe
holding and marketable title to the Technology and Intellectual Property sold
hereunder;
(d) The Vendor is not aware of any claims that the Technology as used in the
Field infringes the patents or any other intellectual property right of a third
party;
(e) The Vendor has taken all necessary steps including the passage of all
necessary resolutions of the Vendor to enter into and give effect to the terms
of this Agreement, and will provide proof thereof to the Purchaser upon its
written request therefor.
8.2 The Purchaser represents warrants and covenants that:
(a) The Board of Directors of the Purchaser have passed a resolution approving
that the Purchaser enter into this Agreement and will provide a copy of such
resolution to the Vendor within 5 days of the Effective Date;
(b) The Purchaser is duly incorporated, in good standing, and has the right and
authority to enter into this Agreement; and
8.3 The Purchaser expressly understands and agrees that it's use of the
Services and Technology is at its own risk, subject only to the warranties of
the Vendor herein set forth. The Technology is provided on an "as is" and "as
available" basis. The Vendor makes no other warranties or representations,
including, but not limited to, express or implied warranties that the Technology
will meet the Purchaser's requirements, will be error-free, or as to the quality
of the Services except as otherwise provided herein. The Purchaser will not
directly or indirectly
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oppose any application by the Vendor to obtain any patent protection from a
Divisional, and the Purchaser will not directly or indirectly contests the
validity, ownership or enforceability of a Divisional or a patent issuing
therefrom.
9. TERM AND TERMINATION
9.1 This Agreement shall commence on the Effective Date and continue for the
Term unless terminated on notice by the Vendor on the occurrence of any event
set out in Section 9.2.
9.2 This Agreement may be terminated immediately by the Vendor by written
notice to Purchaser if:
(a) the Purchaser fails to make any payment under this Agreement when due, and
fails to remedy the default within thirty (30) business days from notice in
writing from the Vendor;
(b) the Purchaser is in breach of the provisions of Article 7;
(c) the Purchaser is in breach of any other covenant or obligation to be
observed or performed under this Agreement and such breach is not remedied
within thirty 30 business days after notice in writing thereof from the Vendor;
(d) the Purchaser directly or indirectly opposes any application by the Vendor
to obtain any patent protection from a Divisional , or the Purchaser directly or
indirectly contests the validity, ownership or enforceability of a Divisional or
a patent issuing therefrom;
(e) the Purchaser has a receiving order made against it or has a receiver
appointed to continue its operations, or passes a resolution for winding up, or
takes the benefit of any statute for the time being in force relating to the
bankrupt or insolvent debtors or to the orderly payment of debts, or commits an
act of bankruptcy;
9.3 Any termination under this Article 9 shall be without prejudice to any of
the rights or remedies of a party which arise prior to the time of such
termination.
10. EFFECT OF TERMINATION
10.1 Upon the termination of this Agreement for any reason, if the Purchaser
has commenced providing Services related to the Technology:
(a) the Purchaser shall cease to provide any Services relating to the Technology
within 15 days from the date on which this Agreement is terminated ("Date of
Termination");
(b) the Purchaser shall deliver or cause to be delivered to the Vendor a report
within 30 days after the Date of Termination. Such report shall specify, in or
on such terms as the Vendor may in its sole discretion require acting
reasonably, the amounts due to the Purchaser from creditors as of the Date of
Termination. Section 4 shall apply to such report and related accounts and
records.
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10.2 Upon the termination of this Agreement for any reason:
(a) the Purchaser shall cease to use the Technology and Improvements, and,
subject only to Section 10.1, shall cease to manufacture, market and sell
Services relating to the Technology;
(b) the Purchaser shall, except as required to be retained by law, at its
expense, immediately return to the Vendor all documents and material containing
Confidential Information or any information with respect to any of the
Technology and shall confirm in writing to Vendor that all such documents and
material have been so returned;
(c) the Purchaser shall assign and transfer to the Vendor all Licenses granted
by the Purchaser;
(d) the Purchaser shall cease to identify itself as the owner of the technology,
or otherwise be associated with, the Vendor; and
(e) pursuant to Section 5.2, the Purchaser, will, at the Vendor's option, assign
all of its right, title and interest in each of the Improvements to the Vendor
in consideration of the sum spent by the Purchaser in developing such
Improvement.
10.3 No Percentage of Gross Revenue Fees paid to the Vendor will be refunded
to the Purchaser for any reason.
11. INDEMNITY AND INSURANCE
11.1 The Purchaser agrees to indemnify and hold harmless the Vendor, its
shareholders, directors, officers, employees and agents from and against any and
all claims arising out of the exercise of any rights under this Agreement
including without limitation against any costs (including without limitation
actual legal fees and disbursements), damages or loss, consequential or
otherwise, arising from or out of the use of any of the Technology or
Improvements or the manufacture, marketing, distribution, sale or use of any of
the Services by the Purchaser or its licensees or its customers howsoever the
same may arise, except only in the event that a third party shall claim
ownership of the Technology or that its use by the Purchaser or its licensees
violates any intellectual property rights of such third party.
11.2 Subject to Section 11.4, The Vendor agrees to indemnify half of the costs
of the Purchaser from and against any and all patent infringement claims arising
out of the use of the Technology in the manner directed by the Vendor or in the
event that a third party disputes the Vendor's title to the Intellectual
Property. As a condition to such indemnification, the Purchaser will provide
the Vendor with written notice of the claim within ten (10) days of first
learning of the claim; permit the Vendor to control the defense, settlement,
adjustment or compromise of any such claim; and permit the Vendor either to
procure the right to continue using the Technology or modify the Technology so
that it becomes non-infringing.
11.3 The Vendor shall have no obligation under Section 11.2 to the extent any
claim of infringement results from (i) use of the Technology in combination with
any other products, if the infringement would not have occurred but for such
combination; (ii) any alteration or
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modification of the Technology not provided by the Vendor, if the infringement
would not have occurred but for such alteration or modification; (iii) use of
the Technology in a way not intended by the Vendor or not provided for, if the
infringement would not have occurred but for such use; or (iv) use of the
Technology that has been modified or altered by the Purchaser, if the
infringement would not have occurred but for such alteration or modification.
11.4 The maximum amounts payable to the Purchaser by the Vendor pursuant to
Section 11.2 are one third (1/3) of the Percentage of Gross Revenue Fees paid by
Purchaser to the Vendor, less reasonable taxes. Subject to this Section, the
Purchaser expressly understands and agrees that the Vendor shall not be liable
to the Purchaser for any direct, indirect, incidental, special, consequential or
exemplary damages, including but not limited to, damages for loss of profits,
goodwill, use, data or other intangible losses (even if the Vendor has been
advised of the possibility of such damages), resulting from the use or inability
to use the Licensed Technology or any other matter relating to the Services or
the Licensed Technology.
11.5 Within 10 days from a request by the Vendor, the Purchaser will give
notice to the Vendor of the terms and amount of the public liability and product
liability insurance which the Purchaser has placed in respect of its office
facilities and services, which in no case shall be less comprehensive or lesser
in amount than the insurance which a reasonable and prudent businessman carrying
on a similar type of business would acquire. This insurance shall be placed
with a reputable insurance carrier and shall include the Vendor, its
shareholders, directors, officers, employees and agents as additional insureds
with respect to the subject matter of this Agreement. Such policy shall include
severability of interest and cross liability clauses and shall provide that the
policy shall not be cancelled or materially altered except upon at least 30 days
written notice to the Vendor. The Purchaser shall provide the Vendor with
certificates of insurance evidencing such coverage seven days before
commencement of provision of Services, and thereafter at least seven days before
the expiry of such coverage from time to time during the term of this Agreement.
The Purchaser's insurance shall be primary coverage and insurance of the Vendor
shall be excess and non-contributory.
11.6 The Purchaser will not claim, or in any way support or aid a claim,
against Vendor, Via Vis Technologies, Inc. and its subsidiary, or Xxxx
Xxxxxxxxxx, arising out of or relating to ownership of the Technology and
Intellectual Property Rights or other matters relating to this transaction for
activities performed prior to the Effective Date, unless required to by law.
12. GOVERNMENT APPROVALS
12.1 The Purchaser shall be responsible for obtaining all necessary
government approvals for the use of the Technology under of the terms of this
Agreement. The Vendor shall cooperate with the Purchaser as reasonably
requested, but at the cost of the Purchaser. If necessary approvals in any
country are not available or are granted and withdrawn, then during such period
that approval is not available the Purchaser shall not exercise its rights in
such country and this Agreement shall remain binding and in force in all other
countries, as the case may be.
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13. INDEPENDENCE
13.1 Nothing in this Agreement shall be deemed or construed to create
between the parties a partnership or joint venture, nor shall anything in this
Agreement be considered or be deemed to constitute the carrying on of business
by the Vendor in any other country than Canada. The Purchaser shall not have
the authority to act on behalf of the Vendor in any matter or cause whatsoever,
except as may expressly be set out herein or otherwise agreed in writing between
the parties. The Purchaser shall not use the Vendor's name in any way, except
as specifically authorized by this Agreement, and except to refer to itself as
the licensee of or purchaser of Technology from the Vendor.
13.2 No party shall be liable for any act, omission, representation,
obligation or debt of another party, even if informed of such act, omission,
representation, obligation or debt.
14. CHOICE OF LAW AND ARBITRATION
14.1 This Agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein, and the parties attorn to the jurisdiction of the courts of the
Province of British Columbia with respect to any matter arising under or related
to this Agreement.
14.2 It is the intention of the parties to settle any dispute relating to
this Agreement among themselves, but if at any time during the term of this
Agreement, or after its termination, any dispute arises between the parties
respecting any matter they cannot settle among themselves, and which does not
require immediate equitable or legal relief, then either party may submit the
dispute to arbitration by three arbitrators pursuant to the provisions of the
Commercial Arbitration Act of British Columbia, as from time to time amended or
substituted, and at and under the rules of the Commercial Arbitration Centre in
Vancouver, British Columbia. The decision of the arbitrators shall be final and
binding on the parties.
15. SURVIVAL OF COVENANTS
15.1 The terms, provisions, covenants and conditions contained in this
Agreement which by the terms hereof require their performance by the parties
after the expiration or termination of this Agreement shall be and remain
enforceable notwithstanding said expiration or other termination of this
Agreement for any reason whatsoever.
16. NON-WAIVER
16.1 No condoning, excusing or overlooking by any party of any default,
breach or non-observance by another at any time or times in respect of any
covenant, provision or condition of this Agreement shall operate as a waiver of
such party's rights under this Agreement in respect of any continuing or
subsequent default, breach or non-observance, so as to defeat in any way the
rights of such party in respect of any such continuing or subsequent default or
breach and no waiver shall be inferred from or implied by anything done or
omitted by such party, save only an express waiver in writing.
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16.2 No exercise of a specific right or remedy by any party precludes it
from or prejudices it in exercising another right or pursuing another remedy or
maintaining an action to which it may otherwise be entitled either at law or in
equity.
17. NOTICES
17.1 Except as either party may hereafter notify the other with respect to
itself, the addresses of the parties for purposes of this Agreement shall be:
Vendor:
668158 B.C. Ltd.
00000 00xx Xxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxxxx
Purchaser:
Free DA Connection Services Inc.
Suite 301 - 0000 Xxx Xxx Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxxx
17.2 All notices, reports, payments and communications pursuant hereto are
to be delivered to the intended receiving party by hand or by mail, postage
prepaid, to the address provided in Section 17.1 hereof or such other address as
the parties may from time to time advise the other of. Such notices shall be
deemed for all purposes to have been received when delivered or, if mailed, upon
the third business day after the day upon which the notice is placed with the
postal authorities for delivery
18. TRANSFER, LICENSING OR MERGER
18.1 Until the Purchaser has paid the maximum consideration as agreed to in
this agreement those being the Percentage of Gross Revenue Fees (up to the
amount of US $500,000) it shall, seek the approval of the Vendor, not to
unreasonably be withheld, to:
(a) assign, license, transfer or part with this Agreement or any of its rights
or obligations hereunder,
(b) amalgamate, merge, have a change of control, sell all or substantially all
of its assets, or consolidate with or into any entity (provided, however that
the restriction in this clause "b"shall not apply to a merger between or among a
publicly traded company).
(c) undergo a change of ownership (herein defined as an entity that owned less
than 10% of the voting shares of Purchaser becoming an owner of 10% or more of
the voting shares of Purchaser other than as may occur in the merger with the
publicly traded corporation
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or through the sale of Purchaser's securities to raise capital for the Purchaser
should it merge with a public company or become public); or
(d) relocate its head office outside of Canada or the United States of America.
18.2 During the Term of this Agreement, the Purchaser may grant a License of
the Technology or Improvements on the following conditions and terms:
(a) such License references this Agreement and terminates in the event of
termination of this Agreement;
(b) the licensee will not have access to the source code used with the
Technology, and such source code will not be placed in escrow;
(c) the license does not substantially defer revenue accruing to the
Purchaser; and
(d) a copy of the executed License is provided to the Vendor within five
business (5) days of execution by the Purchaser.
18.3 If a purported License does not meet the conditions of Section 18.2,
the Purchaser will not grant such a License of the Technology or Improvements
without the Consent of the Vendor.
19. GENERAL
19.1 This Agreement sets forth the entire understanding between the parties
relating to the subject matter hereof and supersedes all previous negotiations,
representations and agreements between the parties, and no modification of this
Agreement shall be binding upon a party unless executed in writing by that
party.
19.2 Each party shall execute such further documents and take such further
steps as may be necessary or desirable to give effect to this Agreement.
19.3 Time shall be of the essence of this Agreement.
19.4 Whenever the singular or masculine or neuter is used throughout this
Agreement the same shall be construed as meaning the plural or feminine or body
corporate when the context or the parties hereto so require.
19.5 Marginal headings as used in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not to be used
in the interpretation hereof.
19.6 If any part, section, paragraph or sub-paragraph of this Agreement
shall be held to be invalid, illegal or otherwise void or unenforceable, the
entire Agreement shall not fail on account thereof, and the balance of the
Agreement shall continue in full force and effect.
-15-
19.7 This Agreement shall enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
AS EVIDENCE OF THEIR AGREEMENT the parties hereto have caused this Agreement to
be executed by their duly authorized representatives effective the date first
above written.
VENDOR
By:
Name:
(Print)
Title:
Date:
PURCHASER
By:
Name:
(Print)
Title:
Date:
-16-
SCHEDULE A
Technology
The Technology includes the know how and inventions relating to:
1. The provisioning of services within the Field that being: the provision of
products and services to companies that service customers obtaining information
through telephones or similar devices such as mobile telephones, PDAs, or
computers using VOIP, and including the delivery of Directory Assistance
services with or without charge to the consumer.
2. Directory Assistance Business Process, namely
i. a business process whereby directory assistance service is provided free of
service charge to users, or may be charged to the users and;
ii. whereby businesses may purchase, for a fee, the ability to sponsor
inquiries, and;
iii. whereby the sponsor of an inquiry may be identified to the user, and;
iv. whereby businesses which sponsor inquiries may share in the opportunity to
sponsor inquiries of competing businesses, and;
v. whereby businesses which sponsor inquiries may sponsor inquiries for their
own business, and;
vi. whereby advertising may be presented to the caller, and;
vii. whereby said advertising may be based on any or all of:
(a) information based on the inquiry;
(b) information obtained or stored about the user; or
(c) location information related to the user or the inquiry;
3. Directory Assistance Technology
a. The use of the multiple passes of an utterance through one or more grammars
(the "Latent Recognition Process") for the purposes of providing free directory
assistance services where said service is provided free of specific service
charge to the user and whereby revenues are obtained by charging a fee to
parties represented within the service.
b. The use of the Latent Recognition Process for the purposes of providing fee
based directory assistance services where said service is provided on
pay-per-use or subscription based charge to the user directly or through a
license.
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c. The use of the Latent Recognition Process for the purposes of providing free
or fee based directory assistance service where said service charges a fee to an
advertiser for advertising presented within the service.
4. Location Processing and Business Finder
(a) Process for geographic location interpretation from live speech input
delivered in the service of directory assistance inquires within the Field.
(b) Process for associating information with geographic information obtained
via a live speech input in the service of directory assistance inquiries within
the Field.
(c) Process for the dissemination of geographically targeted information and
advertising in response to geographic information obtained using a live voice
input in the service of directory assistance inquires within the Field.
5. The product and intellectual property know as Personal Portal.
6. Exclusion
(a) the Technology does not include Push to Get system. However the Technology
does include the similar product known as Push to Request.
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SCHEDULE B
ViaVis Transaction
The parties agree the following will occur on or before, February 15th 2005, and
that the failure of such will result in termination of this Agreement:
1. The Purchaser will sell to the Vendor all shares in Via Vis Technologies,
Inc. for consideration of One Hundred ($100.00) Canadian dollars.
2. Via Vis Technologies, Inc., at the time of the transfer of the shares to the
Vendor, will be in the condition it was acquired by the Purchaser and having
incurred no further debts or obligations from the time acquired by the
Purchaser, except for sale of the Purchased Hardware Assets, Purchased Software
Assets and Residual Intellectual Property as set forth in Schedule "C", Schedule
"D", and Schedule "F" to the Purchaser and the assumption of the Assumed Debts
as set forth in Schedule "E" by the Purchaser.
3. The Purchaser agrees to pay to Via Vis Technologies Inc., for a term of 30
months commencing June 1st 2006, the sum of US $10,000.00 per month. In
consideration for the Purchaser doing so the Hardware Assets as set forth in
Schedule "C" will provided for development purposes to the Purchaser by Vendor.
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SCHEDULE C
Purchased Hardware Assets
Group Qty Item Serial # Description
Hardware 1 SUN Netra T1(1) 230M2263 Voice Server 1
Hardware 1 SUN Netra T1(1) 230M235E Voice Server 2
Hardware 1 SUN Netra T1(1) 230M2261 Voice Server 3
Hardware 1 SUN Netra T1(1) 230M2362 Voice Server 4
Hardware 1 SpeechGenie Developer(2) VGTQ1588 Voice Server
Hardware 1 Cisco Catalyst C3550(3) MAC:000A41D45D00
Hardware 1 Cisco Catalyst C3550(3) MAC:000A8A5D7B00
Hardware 1 HP LaserJet 2500n CNDDB02989
Notes
1. SUN Netra T1 with NMS HearSay, $208,000.00, Balance Owing $0.00
2. VoiceGenie SpeehGenie Developer, $28,752.13, Balance Owing $0.00
3. Cisco Catalyst C3550 Switches, $7938.41, Balance Owing $0.00
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SCHEDULE D
Purchased Software Assets
Group Qty Item Serial # Description
Software 1 Info Canada Data(1) n/a Listing Data
Software 1 Info Canada Data(1) n/a Listing Data
Software 1 Microsoft MSDN(2) n/a Developer Tools
Software 1 JBuilder Pro 4.0(3) n/a Developer Tools
Software 0 XxxXxx XXX Xxxx XX x/x Xxxx. & Source Code
Software 1 ViaVis ADA Pay DA n/a Exec. & Source Code
Software 1 ViaVis ADA Nortel Server n/a Exec. & Source Code
Software 1 ViaVis ADA Operator n/a Exec. & Source Code
Software 1 ViaVis ADA OA&M Tools n/a Exec. & Source Code
Notes
1. Info Canada Data, $7,938.41, Balance Owing $0.00
2. Microsoft MSDN, $3,579.45, Balance Owing $0.00
3. JBuilder Pro, $722.00, Balance Owing $0.00
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SCHEDULE E
Assumed Debts
The Purchaser will assume from Via Vis Technologies, Inc. and/or Via Vis Mobile
Solutions, Inc. the following debts and accepts full responsibility for said
debts and their proper discharge:
1. Peer 1 Networks; $519.34
a. The amount of Five Hundred and Nineteen Thousand dollars and Thirty Four
cents in Canadian currency ($519.34 CAD), payable to Peer 1 Networks for
broadband internet network services.
2. Xx. Xxxxxx Xxxxx, $26,500.00
a. The amount of Twenty Six Thousand Five Hundred dollars in Canadian Currency
($26,500 CAD), payable to Xx. Xxxxxx Xxxxx, Delta, BC, Canada.
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SCHEDULE F
Worldwide industrial and intellectual property rights for trademarks, trademark
applications, trade names, trade dress, service marks, service xxxx
applications, copyrights, copyright applications, franchises, trade secrets,
internet domain names, know-how, customer lists, proprietary processes and
formulae, manuals, memoranda and records relating to the Company's directory
assistance business as contemplated in the Free DA Connection Services Inc.,
Business Plan and as offered by Via Vis Technologies Inc or its subsidiaries
regarding the software provided for evaluation to TELUS Communications Inc.
during "TELUS Multimedia Trial" and "TELUS Operator Services Evaluation" on "as
exists" and "as is" basis.
Agreed Inventions to be added to Divisional Applications:
Know as:
1) "use of Grammars"
2) Grammar Construction
3) Grouping of Segments
4) Database for Frequent Requests
5) Location based lookups
6) Collection of information from a user/caller
7) Multiple Pass latent processing
8) Dynamic Grammar Construction
9) Gain Control and other utterance filtering processes
10) Similar Sounding (alike words or names)
11) Neighborhood grouping
These inventions are to be covered in the Intellectual Property Rights and the
Vendor may use these Inventions outside of the Field. The Purchaser shall have
exclusive right and ownership to these invention within the Field.
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